Environmental Services Overview

Environmental services is a term given to the benefits generated for society by the existence and dynamic development of natural resources, in this case with a particular focus on forests.

Forests are key ecosystems for the planet's long term sustainability. They produce oxygen and remove carbon dioxide from the atmosphere. They regulate the surface and underground flow of water. They smooth out peaks and troughs in water availability and provide very effective filtration systems for higher water quality. They support a myriad of native flora and fauna. And they provide many valuable goods and services, ranging from timber rights through to pleasure knowing that they simply exist.

Regrettably, many of the services provided by forests either were not recognised or were accorded little value. As a consequence, the true value of these services only become widely known when the services themselves were lost through removal of the forest. Examples include soil erosion, loss of nutrients, floods, poor quality water, salinity, flora and fauna extinction, climate change and low resilience to stress in resulting farming systems.

Definition of and assignment of value to environmental services created by forests has two significant benefits for society. Firstly, existing forests are being and will be valued more highly, making them more attractive than alternative land uses after forest clearing. Secondly, payments for environmental services make investment in re-creation of forests more attractive. This can bring forests back into areas where society will benefit, particularly in rural areas through benefits from salinity amelioration, catchment management, biodiversity enhancement and creation of new industries based on renewable resources.

Forests NSW has made a deliberate decision to seek new business opportunities arising from the environmental services of forests, that make use of Forests NSW' world class expertise as a forest manager. Our particular focus is on the application of forest management expertise to produce high quality environmental, social and economic outcomes, wherever possible delivering on all three (the so called "triple bottom line").

Investment Services Division is the conduit and focal point within Forests NSW for development of new business opportunities that deliver sustainable solutions from the environmental services of forests. Investment Services also manages the on-going relationships arising from those new business opportunities.

Carbon	The role of carbon sinks in climate change mitigation; carbon accounting and carbon trading.
Salinity control	The role of trees in managing salinity and opportunities for developing markets around this service.
Biodiversity	The role of forests in enhancing biodiversity, biodiversity accounting and opportunities for developing markets around this service.
Environmental Services Scheme	A NSW Government trial to investigate the development of markets for environmental services using 20 commercial farm sites throughout NSW.
Legislation	Supporting legislation for defining rights and opportunities for environmental services.

Business opportunities for forestry investment and accessing forestry expertise to realise the sustainable solutions from the environmental services of forests are as follows:

Investment opportunities	Investment under Forests NSW' Information Memorandum for commercial wood production and carbon benefits. Investment in new forests for salinity amelioration, biodiversity enhancement, biomass production for renewable energy and/or land rehabilitation.
Mine site rehabilitation	Planting and managing trees on mine site buffer and rehabilitation areas.
Carbon accounting	Preparation of carbon accounts for use in carbon trading.
Greenhouse-friendly products	Production of biomass for renewable energy and charcoal.
Forest management services	Use of Forests NSW' expertise in managing existing forest assets.