AN end to logging in native forests could profit Western Australia by more than $400 million a year, according to new research by the Australia Institute.
The report said logging was not only harmful to the environment, but cost the WA millions in potential profits.
Western Australia Forest Alliance spokeswoman Jess Beckerling said the research confirmed long-standing views by the anti-logging lobby.
"What it means is that we stand to profit substantially by protecting our forests," she said.
"By selling the resulting carbon credits we stand to earn between $16 million and $438 million each year, depending on the carbon price. So we can create employment, promote resilient economies in regional areas, protect habitat for our iconic threatened species and earn millions every year by protecting the forests."
Depending on the carbon price, the report finds the WA Government stands to earn up to $438 million each year through the sale of carbon credits if it were to stop logging native forests in the South West.
Ms Beckerling said an end to logging in the South West would benefit what would become its former timber towns.
"The money earned selling carbon credits won't just benefit the remaining timber towns but will also benefit all Western Australians and protect our forest legacy.
"It really makes sense economically and commercially for WA to develop policies to stop the logging of native forests in our South West.
"WA needs a new forest economy, one in which our forests are protected as biodiverse carbon stores," she said.
The claims were dismissed by the Forest Products Commission.
A spokeswoman said the Australian Institute study was a theoretical exercise with no relevance to Western Australia.
"There is no accredited national scheme which would allow for carbon credits from stopping sustainable harvesting of native forests. The Australian Institute report explicitly acknowledges native forestry is excluded," she said.
"The study from the Australian Institute indicates there are major uncertainties with the legal, policy and accounting basis of its own report. The report vastly overestimates the quantity of carbon removed and the price of carbon.
" It also fails to take into account the cost of implementing the scheme and the additional carbon emissions from using products such as steel and concrete."
She said the report used a price for carbon which was vastly above the existing carbon markets.
"The current price for carbon units in New Zealand is $2 and approximately $8 in Europe; yet the Australian Institute model suggests prices which escalate as high as $135 per unit by 2032," she said.
"The report over-estimates the quantity of carbon harvested in Western Australia's forests. The Forest Products Commission currently removes less than 500,000 tonnes of logs from sustainably managed forests (excluding removals from mine-site clearing).
This is estimated to equate to between 550,000 and 600,000 tonnes of carbon dioxide; yet the Australian Institute report estimates the quantity of carbon dioxide released to be between 1.8 million and 2.9 million tonnes."
She said the report failed to factor into account any costs associated with the cessation of native forest harvesting.
"In 2004 it cost the government approximately $170 million to close down and restructure the industry and assist local businesses and communities.
"The Western Australia Forest Alliance proposal would take the major employer out of Manjimup, Pemberton, Nannup and Greenbushes.
These South West communities would be devastated," she said.