"I'm not being cynical here or anything, but I really want to know. Those environmentalists who don't like deforestation AND don't like Genetic Engineering, would they be supportive of such a project as below?"
Well, I've passed the question on to the frustrated environmentalists in Tasmania to see what happens.
IMHO if the process is 'clean' (ie has no unwelcome pollution, energy and social fallout) and the end products are genuinely biodegradable I can't see a problem.
Lots of questions: Will the production process be dominated by large corporations? What sort and degree of energy input is required? What are the byproducts of production and disposal?
Producing paper by way of growing hemp is not a real solution as the production needs entail using a hell-of-a-lot-of-land. Land is the ultimate non-renewable resource. However, growing hemp for hemp oil (high quality essential fatty acid source) and for other products such as fibre for clothing would be viable to the degree that sustainable agriculture can be carried out.
It's very hard to get past the need to reduce consumption overall to sustain the productivity of the soils and to sustain biodiversity (population pressures, the existing carbon load etc weigh heavily in this regard). However, a production process that FREES UP LAND appears to be a step in the right direction.
Certainly if cellulose production can be done using EXISTING bacteria (rather than genetically-engineered) it seems promising!
Ian Murray wrote: "While I'm not against GE per se .."
If the effects of biological engineering can be restricted to one individual (such as that used in medicine) I do not oppose it. However, from the information gleaned over the years, the justification regarding a ban of GE in agriculture is very clear. BJR