The role of government policy in facilitating investment in forestry: local and national issues

This paper examines some issues associated with taxation, carbon trading and biofuels as 'global' policies. Whilst taxation is a national concern, it can be used as a tool to enhance the effectiveness of carbon trading as means of achieving reduced CO₂ emissions. Taxation is used to provide taxation benefits for research and development of improved technology, reducing investment cost by greater depreciation rates and investment incentives to mention a few. Taxation does increase the level of plantation establishment and in Australia the use of Managed Investment Schemes have proven to be particularly successful. Other sectors of the community question whether the increased establishment of monoculture plantations is a success at the local level. The need to do something about climate change has been accepted internationally although what and how to do it is still subject to much debate. This paper highlights that although a common international approach is called for, some issues such as different trading systems and criteria create ambiguity. The European Union's call for greater use of biofuels is visited but regarded by some as an example of well intentioned policy being adopted but for various reasons has created problems such as deforestation on a localised basis