Australia

Carbon forestry investments in New Zealand and Australia have taken a blow from the combined effects of legislative uncertainty and the depressed prices for carbon based on Euro problems, but the sector remains cautiously optimistic.

PLANTING of more than 10,000 hectares of mallee eucalypt trees is now underway as part of one fo the largest carbon forestry projects in Australia.

The $100 million dollar scheme was launched in 2007, but nearly five years on, less than a third of that amount has been committed and the projects targets have been drastically reduced.

STATE-OWNED timber agency VicForests has been hit with court action by the Environment Department after it allegedly logged protected rainforest.

TONY EASTLEY: When the Prime Minister and the Tasmanian Premier signed a forestry agreement last year it appeared that an end was in sight to the protracted and bitter Tasmanian forestry debate.

This morning however the deal would appear to be in tatters.

Felicity Ogilvie reports from Hobart.

FELICITY OGILVIE: The timber company Ta Ann's announcement that it will cut up 40 jobs as a result of environmental groups lobbying against it has thrown the Tasmanian forest peace deal into disarray.