The Wood Resources Study provides an assessment of the various outcomes for deferred forest areas on the ongoing supply of timber to industry.
The objectives of the Wood Resources Study are to:
The study does not provide a socio-economic assessment of various levels of timber availability which was separately considered (see Chapter 4 and 5).
It was recognised that there were several difficulties with assessing both current forest attributes and future timber growth at the compartment level.
Calculation of sustained timber yields requires the ability to forecast growth for a forest stand. Stand growth is a function of the inherent potential for site productivity depending on forest type and stand structure, as applied to standing volume. All of these factors are highly variable at the compartment level. Subdivision of a compartment into 'resource units' which are relatively homogeneous for these factors makes it possible to predict growth rates at the resource unit level, thereby enabling the potential timber yields of a defined area of forest to be predicted by a computer model.
Growth and yield models are driven by the following factors:
The first three factors vary by resource unit while the remaining factors may vary by management area.
The rate of growth for given yield associations between harvests is derived from analysis of permanent growth plot (PGP) monitoring carried out by SFNSW over many decades.
The growth modelling process provides the volume per ha of high value, low value and pulpwood grade logs. It does not separately predict volume of high value specialty products such as poles, piles and girders which must be estimated. The volume estimations can also be linked to forest types to estimate volume by tree species.
To enable an assessment to be made of the best pattern and mix of resource units to harvest over time, a range of harvesting options are generated for each resource unit.
This process produces a set of harvesting options for each resource unit which essentially vary the first year in which harvesting could occur and assess the growth and yield from that point onwards. As will be described in the following section, dollar values can be attached to each yield over time, with the resulting total returns from harvesting discounted to current dollars to provide a value for each harvest option.
The value in commercial terms of a harvesting option should reflect its standing volume, its tree species composition, its log quality and the growth potential of the site for future harvesting. One appropriate measure is the net present value (NPV) of the set of yields nominated for a given harvesting option.
The NPV of a resource unit is dependent on the timing of harvesting, timber characteristics (piece size, quality and value) and the economic discount rate that is used. A seven percent discount rate was used in this analysis. Value in different time periods when reduced to present dollars will vary markedly with significant changes in timing.
In the time available for this study, it was not possible to adequately refine some of the inputs to the NPV. Therefore, the NPV derived for a resource unit (or a group of units) should be interpreted as a relative value, not as an absolute value. Relative values provide a single figure which indicates the importance of a resource unit to sustainable wood supply. This value is discussed in more detail in Section 2.6.7.
A linear programming (LP) model was used to:
Each harvesting option has a NPV calculated for it. The model maximises the sum of NPVs for the harvesting options and resource units harvested each year.
The model is constrained so that the volume of high value logs harvested in any year cannot be less than the volume harvested in the previous year. Hence, the volume of high value logs produced over time cannot decline; in other words, the volume available for sale each year is sustainable.
Because the IAP negotiations focused on quota sawlogs, the sustained yield of quota sawlogs was calculated by filtering out quota sawlogs from the model's predicted sustainable yield of high value logs based on historical sales data.
The LP model is not intended to define an 'order of working', even though harvesting years are assigned to each resource unit as an output of the model. The output identifies a group of resource units which contribute most to meeting the sustained yield requirements over a specified period. Once a set of compartments or resource units is included in a deferred forest area calculation, a re-run of the model will identify new resource units possibly harvested in different years which contribute most to meeting the sustained yield requirements for the period.
The LP model does not provide an optimisation methodology for trading off resource units between continued availability for wood supply and inclusion in the deferred forest areas.
Virtually all State forest management areas in NSW will produce lower yields of quota sawlogs in the short to medium term than can be achieved in 15 -30 years time. This arises because the area from which quota sawlogs can be harvested has diminished over time; management harvesting protocols have increased; and in some areas overcutting of the resource has occurred in the past. While the level of harvesting over the last 20 years or so has progressively declined, the loss of sawlog-sized trees for the reasons mentioned above creates a "hole" in the long term supply pattern. Regrowth stands in many areas are not expected to contribute the bulk of quota sawlogs until a further 15 -30 years have elapsed - such logs are simply not large enough to make quota sawlogs until that time.
Hence, the sustained yield over the next 15 - 30 years is limited to the volume which can be harvested from stands which are either already of quota size or which will grow into quota size within that period. Beyond that period, a higher level yield of quota sawlogs can be harvested. However, it is not possible to harvest at that higher level until that period has elapsed, because there are simply insufficient quota sawlogs to sustain that level of harvest.
Most management areas will have potentially higher sustainable levels of quota sawlog harvesting in 25-30 years time, but in some cases the period is 15-20 years. This period is referred to as the transition period, because it reflects the transition from a mature forest with little commercial regrowth to a forest based largely on regrowth. A transition period of 25 years has been used in most cases, with 15 years used where appropriate.
The sustained yield figures from the Wood Resources Study reported for the IAP negotiations comprise the average yield over the transition period. Potentially higher volumes from beyond the transition period were not included in the reported yield as doing so would artificially inflate the volume of quota sawlogs that could be sustainably harvested over the next 15 to 25 years.
Like the Irreplaceability Index, the Wood Sustainability Index is an attempt to express, in a single figure, the complex factors which indicate the importance of a compartment to a sustainable wood supply. The index combines factors such as the standing volume of timber, the tree species and log quality which contribute to the type and quality of timber product and the commercial value. It also incorporates a measure of the value of the compartment for the site's potential for growth ( ie the production of future volume) for non-declining wood supply. If a compartment is vital to ensuring that the volume does not decline (because of the timing of its potential harvest), its index will be higher than one whose contribution is not as significant.