Former treasury boss looking past logging to expanded carbon credit scheme

Australia Broadcast Center

24-04-2025

Decades before Ken Henry became a household name in Canberra, he spent many of his days in the New South Wales bush.
The former Treasury Department boss grew up on the Mid North Coast, where his father logged native forests as a worker in the timber industry.
"On the weekends I would go out with my father and my brothers to places where he worked as a contractor," Dr Henry said.
"We would talk to him about what he was doing and why he was doing it.
"I've had this interest in the condition of the natural environment since I was a kid."
Dr Henry says he is now focused on the environment full-time after leaving the public service.
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ABC News: Jack Ailwood
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That nature-loving child would go on to become one of Australia's most prominent economists, serving as treasury secretary during the years of the Rudd and Howard governments.
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But his passion for the environment never faded.
During his decade-long Canberra career, he would rescue injured animals and nurse them back to health on his family's property outside the capital.
Nearly 15 years after leaving the public service, he is now focused on the environment full-time.
A new effort to keep carbon in forests
As chairman of the Australian Climate and Biodiversity Foundation, the architect of the 'Henry Tax Review' is now pursuing another ambitious plan aimed at protecting native forests from logging.
"We have been developing a carbon method that would pay the managers of these forests to store carbon in the forests," he said.
"
It sounds like I'm saying money grows on trees — and in a way, I am.
"
The plan aims to keep carbon stored in living trees, with the concept proposed to the Commonwealth by the NSW government.
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ABC News: Jack Ailwood
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The NSW government further developed the concept and proposed it to the Commonwealth.
Under the proposal, state forests would be added to the nation's existing carbon credit scheme, which allows businesses or individuals to earn credits through projects that reduce or avoid emissions, such as reforestation.
The state government agencies that manage the forests could then earn carbon credits by slowing or stopping logging.
Big industrial polluters could then buy those credits to offset their emissions as the nation moves towards its goal of reaching net zero by 2050.
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Modelling commissioned by the climate group found about 1,700 full-time jobs could be created in NSW if the money was reinvested in forest management and bushfire mitigation.
"We estimate over the next 15 years that would generate revenue of around $100 million a year," Dr Henry said.
The plan has been criticised by the timber industry and the federal opposition.
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ABC News: Jack Ailwood
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Timber industry has grave concerns
Last year, Climate Change Minister Chris Bowen confirmed the proposed carbon credit method was one of four selected for priority development by experts from the environment department.
The plan has been criticised by the timber industry and the federal opposition.
The Australian Forest Products Association (AFPA) argues the proposal would lead to mass job losses — claiming there are 8,900 hardwood workers in NSW alone.
AFPA CEO Diana Hallam told the ABC the sector provided valuable products to the housing industry — such as decking and flooring.
She argued Australia would be forced to import more wood if the logging of native forests slowed or stopped, claiming plantation timber was much lower quality than native hardwood and therefore not an adequate substitute.
"Where is that timber going to come from?" she said.
"We have some of the most stringent environmental standards in the world here when we harvest our forests."
The Australian Forest Products Association argues the proposal would lead to mass job losses.
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ABC News: Jack Ailwood
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'Not founded on the best science'
Shadow Environment Minister Jonno Duniam described the proposed method as a "backdoor way for Labor to shut down our world-leading, sustainable native forest harvesting industry".
"The method may sound good to some, but, in reality, it is not founded on the best science and evidence," he said in a statement to ABC News.
Western Australia and Victoria banned the logging of native forests last year, but the operations are ongoing in NSW, Queensland and Tasmania.
The NSW government pledged $80 million to establish a Great Koala National Park.
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ABC News: Donal Sheil
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The NSW Forestry Corporation manages about 2 million hectares of state forest and logs around 1 per cent each year, according to its website.
The NSW government has indicated — if the proposed method is approved — it will consider using it to earn credits for the Great Koala National Park, which it has vowed to create on the state's Mid North Coast.
Tasmania's Resources Minister Eric Abetz has previously confirmed the state would not support the proposal.
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