NCPA - National Center for Policy Analysis

Regulation in the Pulp and Paper Industry: Costs and Consequences

May 25, 2012

The paper and pulp industry represents one of the largest manufacturing sectors in the United States.  It provides essential products such as paper, paperboard and insulation to businesses and individuals around the world.  However, it also faces a great deal of criticism from activist groups and regulation from government agencies, say Colleen Haight and Derek Thieme of the Mercatus Center.

The complaints that are leveled at the industry can be classified into two broad categories: negative environmental impacts and unsafe working conditions.  This brings it into regular conflict with the Environmental Protection Agency and the Occupational Safety and Health Administration, along with a host of individual interest groups.

However, these entities often fail to realize the great strides that the paper and pulp industry has made over recent decades, in regard to both the environment and employee safety.

  • Between 1970 and 1998 the paper and pulp industry significantly reduced its emissions of air pollutants -- carbon monoxide, sulfur dioxide and particulate matter -- by 32 percent, 36 percent and 89 percent, respectively.
  • Thus, the industry has kept pace with national standards with regard to carbon monoxide and sulfur dioxide, and exceeded expectations in reducing particulate matter emissions.
  • The industry also dramatically reduced its contribution to water pollution with the adoption of solid waste incinerators.
  • Additionally, between 1994 and 2010 the number of workplace injuries in the paper and pulp industry declined at a faster rate than the national rate for all private industries.
  • Its rate of injury declined from 8.8 annual injuries per 100 workers to 3.1, while the private sector as a whole only saw a decrease from 8.4 to 3.4.

Despite these successes and the industry surpassing the rest of the private sector, paper and pulp employers are still saddled with burdensome regulations.

  • The most recent report on pollution abatement operating costs from the Census Bureau reports that the industry spent nearly $5.6 billion in 2005 on capital expenditures to reduce pollution.
  • Additionally, operating costs of pollution abatement programs totaled nearly $1.8 billion.
  • Finally, researchers determined that the cost per employee in the paper industry was $1,320 per year in 2000 ($1,647 in 2010 dollars).
  • This amounts to $648 million per year.

Source: Colleen Haight and Derek Thieme, "Regulation in the Pulp and Paper Industry: Costs and Consequences," Mercatus Center, May 2012.

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