MONA's Forest economics shared vision: Progress or just another motherhood statement

Preamble

The MONA Forest Economics Congress has done something remarkable. After years of careful dialogue, it has produced a Shared Vision that recognises native forests as living, perpetual systems — a statement now signed by conservationists, Palawa leaders, scientists, artists, philanthropists and, importantly, several major industry figures. That alone marks a significant shift in Tasmania’s forest debate. But it also exposes a deep contradiction: while the Shared Vision treats forests as ecosystems we inherit and steward, STT’s financial accounts continue to treat them as single‑rotation timber crops whose “value” rises automatically on paper each year. This briefing note sets out why that contradiction matters, how it shapes public narratives, and why honest accounting must come before any discussion about how much logging — if any — is compatible with the values the Shared Vision expresses.

Briefing Note for Forest Economics Congress Working Groups

STT valuation methods and the Shared Vision for Tasmania’s forests

1. Purpose of this note

This note provides working groups with:

• a clear explanation of how Sustainable Timber Tasmania (STT) currently values native forests
• how that valuation model shapes public narratives and policy decisions
• how MONA’s Shared Vision (“No generation owns a forest…”) directly challenges the assumptions embedded in that model
• why improved accounting and greater disclosure must precede any decision about the appropriate quantum of logging, including the possibility that some forest types should not be logged

The aim is to support Congress discussions with a shared factual and conceptual foundation.

2. How STT currently values native forests

2.1 The model: forests valued as single‑rotation timber crops

STT values its standing timber as the net present value (NPV) of future net harvest proceeds. This means:

• the forest is treated as a crop, not a perpetual ecosystem
• the only value recognised is timber revenue
• the only costs recognised are direct harvest and sale costs
• the future use of the forest is assumed to be harvest
• non‑timber values (carbon, water, biodiversity, culture, recreation) are excluded
• long‑term obligations (regeneration, roading, fire, land management) are excluded

This model is appropriate for a plantation. It is structurally inappropriate for a native forest.

2.2 The “discount unwind” and paper profits

Because STT uses discounted cash flow (DCF), the present value of future harvest proceeds automatically increases each year as the harvest date approaches.

This increase — the discount unwind — must be booked as revenue.

It is:

• not cash
• not improved forest condition
• not increased timber value
• not operational performance

It is simply the mathematical effect of time passing.

Let me explain this further:

Imagine you are promised $100 in ten years. Today, that promise might be worth $60. Next year, without anything changing, the present value rises to $65 simply because the payment is one year closer. You haven’t earned $5. Time has simply passed. But under accounting rules, that $5 must be booked as revenue. That is exactly what happens in STT’s accounts every year.

This mechanism allows STT to report “profit” even when:

• cash flow is negative
• regeneration and roading costs exceed harvest proceeds
• the forest estate is declining in ecological condition
• long‑term liabilities are accumulating

The discount unwind masks structural loss‑making.

2.3 What the model cannot see

STT’s accounts do not measure:

• forest health
• ecological continuity
• carbon permanence
• biodiversity integrity
• water regulation
• cultural significance
• opportunity cost of public land
• long‑term community impacts

This invisibility matters because:

What is not measured is not managed. What is not valued is not defended. What is not costed is treated as free.

3. How MONA’s Shared Vision challenges STT’s valuation model

The Shared Vision articulates principles that directly contradict STT’s assumptions.

3.1 “No generation owns a forest.”

Yet STT values forests as if one generation does own them.

The Vision emphasises:

• intergenerational responsibility
• inheritance
• stewardship

STT’s model:

• values only the current crop
• ignores long‑term obligations
• treats forests as finite assets rather than perpetual systems

3.2 “Forests are living systems, not simply resources.”

Yet STT values only the resource component (timber).

The Vision recognises forests as:

• ecological systems
• cultural and spiritual places
• social and economic foundations

STT recognises only:

• timber revenue

3.3 “Old‑growth forests are living expressions of ecological continuity.”

STT’s model cannot recognise ecological continuity at all.

STT’s valuation:

• does not distinguish old‑growth from regrowth
• does not value continuity, structure or biodiversity
• values all standing timber as interchangeable units of future harvest proceeds

3.4 “Forests should be managed for all their values… with forest health as the foundation.”

STT’s accounts include only one value and exclude most costs.

The Vision calls for:

• ecological, cultural, social and economic values
• forest health as the foundation
• whole‑of‑landscape thinking

STT’s accounts:

• measure only timber
• exclude most economic costs
• do not measure forest health or ecosystem condition

3.5 “We choose long‑term stewardship over short‑term advantage.”

STT’s model rewards short‑term paper gains and hides long‑term costs.

The discount unwind creates:

• short‑term paper profits
• incentives to harvest sooner
• no recognition of long‑term stewardship obligations

4. Better accounting will reveal whether logging is legitimate

Improving STT’s accounting will reveal whether any level of logging is acceptable at all.

Full disclosure is the diagnostic tool. Policy decisions come afterwards.

Once the true costs and true impacts are visible, the question becomes:

What amount of logging — if any — meets ecological, cultural, economic and intergenerational criteria?

The answer may be:

• zero in old‑growth
• zero in high‑conservation‑value forests
• zero in carbon‑rich forests
• zero in culturally significant forests
• zero where regeneration costs exceed harvest proceeds
• zero where natural capital loss exceeds timber value
• zero where community impacts are negative

And perhaps:

• some logging in previously modified forests
• some logging where ecological, cultural and economic criteria align
• some logging where communities support it
• some logging where natural capital accounts show net benefit

But the quantum must be determined after full disclosure — not before.

5. Implications for Congress working groups

5.1 Economics and accounting

Working groups should consider:

• replacing single‑rotation discounted cash flow DCF with perpetual ecosystem valuation
• separating discount unwind from operational revenue
• recognising full lifecycle costs (regeneration, roads, fire, land management)
• developing natural capital balance sheets
• integrating ecological indicators into financial accounts
• exploring impairment tests based on ecosystem condition

5.2 Governance and policy

Key questions:

• Do the current accounts shape ministerial decisions and public narratives?
• Does the appearance of profit affect willingness to reform?
• What governance changes are needed to require honest accounts?
• How can the Shared Vision guide policy design?

5.3 Community and transition

Key questions:

• How do we explain these accounting issues in ways communities can use?
• How do we ensure the burden of change does not fall on one region or group?
• How do we link natural capital accounting to just transition funding?

6. Closing observation

For too long, all parties have treated the financial realities of native forest logging as something that can be mediated, softened, or ignored – usually the latter. But the numbers — once fully disclosed — will tell us plainly what is viable, what is not, and what future each forest can genuinely support at a level the community is prepared to accept.

Some things can’t be negotiated. One and one will always equal two. Debits and credits - plusses and minuses if you prefer - must add up. Most of the time financial statements are not matters of opinion. They are a matter of arithmetic.

Compromise can help us navigate transition. It cannot change the underlying arithmetic.