sectoral economic costs and benefits of ghg mitigation - IPCC

Energy Intensive Industries
• The study included a Peer Review Group to provide a third-party assessment of the
reasonableness of the approach that NCASI used and to assist NCASI in its efforts to
estimate costs of the treaty.
• Under a common marginal-cost scenario, the capital costs for reducing overall industry
emissions from projected 2010 levels to the Kyoto target are estimated to be at least $6
billion. This $6 billion represents a doubling of the current environmental capital costs for
the industry.
• Estimated annualized costs were found to be highly sensitive to assumptions about energy
costs and the potential for selling excess power to the grid.
International Trade Concerns
• The U.S. forest products industry is already facing strong competition from developing
countries who have significantly lower fiber and labor costs. Countries such as Indonesia,
Brazil and Malaysia that will not have to comply with Kyoto reductions will have yet another
major production cost advantage over the U.S. industry. This would further threaten the U.S.
industry’s ability to compete both domestically and internationally.
• An important component of the U.S. manufacturing base as well as high-paying forest
product industry jobs would be lost under this scenario.
Future Technology to Reduce Greenhouse Gases
• The forest products industry, university and government teams are working together on more
than 70 projects to improve energy and material efficiency and forest yields
• Some of these projects include:
Black Liquor and Biomass Gasification
Microwave Drying of Chips
Replacing Chemicals in Recycle Mills with Mechanical Alternatives
Wood Drying Technologies to Reduce Volatile Organic Compounds
Sustainability of Soils and Improved Productivity of Forests
Recommended Policies to Reduce GHG Emissions without Loss of Competitiveness
• There must be equal application of treaty provisions regarding manufacturing facilities in
both developed and developing countries.
• Incentive for related research, development and technology implementation, including
government/industry research partnerships, tax incentives, and anti-trust exemptions, must be
made available by the U.S. and other governments.
• There must be recognition of the lengthy capital investment cycles of basic manufacturing
industries in any timetables for emission reductions contemplated by the treaty or
implementing regulations.
• The treaty and implementing regulations must recognize that emissions from biomass fuels
do not contribute additional greenhouse gases to the atmosphere.
• All sectors of the economy- agriculture, utilities, industry, commerce, small business,
transportation, and individuals- must make a recognizable contribution to a program to
reduce greenhouse gases.
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