Researchers from The Australian National University (ANU) have found the creation of a Great Forest National Park would deliver the best environmental and economic returns to Victoria from its Central Highlands.
They found the economic benefits of the native forests outweighed the economic benefits of native timber production from the tall, wet forests of the Central Highlands.
Lead researcher Dr Heather Keith from the ANU Fenner School of Environment and Society said changing forest management to conservation would be better economically, as well as for the environment.
"We used the international standard System of Environmental-Economic Accounting to understand the relationship of environmental and economic factors in the region," Dr Keith said.
"The current mix of benefits and costs, and potential trade-offs between land use activities, are revealed by the accounts. This allows policy makers to reconsider how the area is managed."
Dr Keith measured the value of native timber production as well as the impact of logging on water supply, climate abatement and threatened species.
She found the forests are worth $12 million in native timber production each year. But the forests also contribute a national benefit worth $310 million for water supply, $312 million for agriculture, $260 million for tourism and potentially $49 million for carbon storage.
"The loss of the $12 million per year contributed by the native forest industry to the economy would be offset by increases in the value of water supply and carbon storage," she said.
Dr Keith said it was time government, industry and the public recognised changes to forest management would bring many benefits to the region.
The number of species classified as threatened in the study region grew from 28 in 2000 to 38 in 2015.
""The Central Highlands is home to unique flora and fauna and it's vital something is done before it's too late," she said.
"New policy settings are needed to achieve a strategy and finance to transition away from native forest harvesting in the region.
"The Australian Government needs to change regulations to allow native forests entry into the carbon market and needs to implement regular accounting to monitor progress and then adjust management strategies."
The research was supported by the Australian Government's National Environmental Science Programme.
The research has been published in Nature Ecology and Evolution.
Learn more about Mountain Ash forests with ANU Science on Location: https://www.youtube.com/watch?v=kJZm1_1Q-nE.