NSW Department of Primary Industries research scientist Fabiano Ximenes said the Australian emissions trading scheme should recognise the long-term storage of carbon in forest products.

”There will be an immediate and significant greenhouse benefit if these gains are recognised and forest products are used in construction instead of more energy intensive materials like steel or concrete,” Mr Ximenes said.

Doug Parsonson, from consulting and engineering firm Pöyry Forest Industry, said the demand for forest products amongst Australia's neighbours is expected to increase as a result of economic growth in many emerging markets and the potential for biomass to be used as an energy source.

”This represents an opportunity for the Australian forestry industry to increase exports,” he told the conference.

Any increase in forest area May place further pressure on water availability in some regions already struggling with water constraints.

But Ian Prosser, from CSIRO"s Water for a Healthy Country Flagship, believes that plantation water use should not significantly affect water availability, and May even provide benefits for agriculture.

“While water use in plantations should be taken into account, in general the impact of plantations on water availability has been exaggerated,” Dr Prosser said.