US WOOD Case

Case Name


          CASE NUMBER:         121 
          CASE MNEMONIC:      PULP 
          CASE NAME:          Pulp Processing

A.        IDENTIFICATION
1.        The Issue
     The production of wood pulp across the globe rests on two
different processes; alkaline sulfate (Kraft or chemical) and
thermoechanical (TMP or mechanical) pulping.  At issue is the
amount of pollution each process releases into the environment
every year.  The Kraft process had been an industry standard until
the TMP process was developed in 1968.  Since the Kraft process
relies on chemical based production of pulp, the amount of  toxins
created as an after product are quite high.  In contrast, TMP
produces significantly less pollution at less cost per ton of pulp,
making this process more economical and efficient.  Diffusion of
this cleaner technology to developing nations will have several
impacts.  First, the amount of pollution that in incurred in the
pulping process will be much lower.  This will curb the
environmental impact on a countries citizens, and on the raw
material inputs for the pulping.  Second, the TMP makes pulp
production more efficient and is less capital intensive as the
chemical process.
2.        Description 
     Most developed or developing countries have a pulping
industry.  The major industrialized nations (the United States,
Japan, Europe, as well as some of Eastern Europe) have switched a
large portion of their pulping industries to the TMP.  Developing
countries (ie. Brazil, Turkey, Mexico, India) and even poorer
nations (Angola, Morocco, Zimbabwe), stand the most to gain from
TMP.  There are several reasons why this technology has not
dominated the industry.
     1.  The time lag in technology development and diffusion. 
     As TMP have become more popular, the equipment and costs
     have gone down, allowing other countries to acquire the
     technology.
     2.  Both TMP and the Kraft process have different
     advantages in producing a final product (these will be
     discussed below).
     3.  Environmental concerns by consumers, and national
     regulations have only just begun to make profound impacts
     on the industry.  As standards become higher, and
     consumers more aware of the products, will cleaner
     technologies be applied.
     The environmental impact of the Kraft process on the
environment takes place at several stages.  As was mentioned above,
the Kraft process is better suited for certain final products.  The
Kraft process is more versatile, allowing most types of wood to be
processed.  In addition, the quality of paper products is higher
because the process makes stronger fibers for the paper.  However,
the paper tends to be darker and requires bleaching (adding more
chemicals and pollutants to the process).  TMP produces a weaker
paper, but does not need bleaching.  Since there are so many
different types of wood that can be processed by chemical pulping,
deforestation becomes a more significant problem.  A developing
country using the chemical method would process any type of tree
that it has in abundance, regardless of the ecological impacts. 
Thus, exotic trees, or trees that are significant contributors to
an ecosystem would be threatened by this process.  Another key
factor is the amount of wasted wood that is involved in this
process.  Since mechanical pulping is much more efficient (90%
percent as compared to around percent), there would be an
additional amount a deforestation involved with the chemical
process. 
     There are other trade-offs for each type of production.  The
mechanical process requires less capital cost (overhead), and is
less reliant on complex technologies, but is also more labor and
energy intensive than the chemical process.  Even here, there are
sub-sets of trade-offs.  The chemical process is self sustaining,
using the leftover pulp product as a fuel.  However, the yield of
the chemical process is much lower than with the mechanical process
(50 percent for the chemical, and 95 percent for the mechanical). 
Emissions from the pulping process are in the form of sulphides,
with the chemical process producing a wide variety of sulfur
by-products.  In contrast, the TMP emits only sulphur dioxide, and
a small amount of organic pollutants from the refiner vents.  The
main pollutants are dispersed wither through the air or by nearby
water sources.  Dioxin is a leading by-product of the chemical
process which has devastating effects on the local ecology, as well
as secondary effects on humans who consume food/water products from
nearby areas.
     The top 15 firms in the United States and Canada account for
57 percent of the world pulp production.  Environmental issues
stemming from the pulping process, as well as a host of other
industrial contaminants have been tackled by the Clean Air act of
1970, and subsequent environmental regulations.  This is
significant since these measures take on the bulk of the industry,
and can be more effectively regulated.  Stricter standards on the
types, and amounts of pollutants that can be released in the air
and water have gone far to clean up both the chemical and
mechanical pulping facilities.  Filters, technological advances in
the processes themselves, and the types of chemicals used are all
outcomes of stricter legislation.
3.        Related Cases:
     Keyword Clusters 
     (1): Trade Product            = PULP
     (2): Exporter                 = USA
     (3): Environmental Problem    = Pollution Land [POLL]
4.        Draft Author:  Tyler Shields
B.        LEGAL Cluster
5.        Discourse and Status:  Agreement and INPROGress
6.        Forum and Scope:  MULTIlateral 
7.        Decision Breadth:  Around 100
8.        Legal Standing:  NGO
     Often national environmental regulations play a role in
determining how much chemical based pulp products are allowed. 
Specifically, the US, Canada and Europe have created legislation
that covers the emissions from the pulp industry.           
C.        GEOGRAPHIC Cluster
9.        Geographic Locations
          a. Geographic Domain:    GLOBAL
          b. Geographic Site:      GLOBAL
          c. Geographic Impact:    GLOBAL
10.       Sub-National Factors:  NO
11.       Type of Habitat:  TEMPerate
     However, raw materials may be imported for refinement.
D.        TRADE Cluster
12.       Type of Measure:  Regulatory Standard [REGSTD]
     There is no universal standard that prohibits chemical
pulping, however, there may be some national restrictions on
chemical pulp imports.  Due to its efficiency, TMP has been more
widely used in developed countries, while some environmental
control policies have also influenced this.
13.       Direct vs. Indirect Impacts:  INDirect 
14.       Relation of Measure to Environmental Impact
     a.  Directly Related:         YES  PULP
     b.  Indirectly Related:       YES  WOOD
     c. Not Related:               NO
     d. Process Related:           YES  Pollution Land [POLL]
15.       Trade Product Identification:  Wood PULP
16.       Economic Data
     Industry output is around $2 billion per year
and employment is 600,000 in the United States and Canada (about 70
percent of the industry).
17.       Impact of Measure on Trade Competitiveness: LOW
     World totals for pulp production favor the chemical process by
roughly 3 to 1.  Pulp producers outside of the US and Canada
consist of only 30 percent of the world market.  This figure is
around $600 million per year.  Only 30 percent outside of the
United States and Canada, however, the trade in paper products
(newspapers, magazines, and other end products), is a huge world
market.  Currently only about 30 percent of the pulping process is
mechanical, so the price effect is relatively small.  Once the
mechanical process becomes more entrenched in developing countries,
along with the United States and Canada, the price effects will
impact the chemical pulping market.  The technology for the
mechanical process is relatively less expensive than the chemical,
and new technologies have only bloomed since the mid 1970s.  This
gives developing countries an advantages since the plants that they
create will be directly competitive with the major producers.
18.       Industry Sector:  WOOD
19.       Exporters and Importers: US and CANADA  
     The main exporters of the pulp are the United States and
Canada, simply from their dominance in the market (see .  Developing nations in South
America and Southeast Asia also compete for export markets.
E.        Environment Cluster
20.       Environmental Problem Type:  Pollution Land [POLL]
21.       Name, Type, and Diversity of Species
          Name:          Trees
          Type:          Plant/Dicot and Fir
          Diversity:     NA
22.       Resource Impact and Effect: MEDium and Structure
                                             [STRCT]
     The overall impact will depend on the rapidity and size of the
change over to  the mechanical process.  However, most developing
countries embarking on pulp production will most likely use the
mechanical process for the reasons described above.  This will
positively increase the ratio of the mechanical process as more
firms enter the market.
23.       Urgency of Problem:  LOW
24.       Substitute:  Conservation [CONSV] 
     TMP is in fact the substitute for the chemical process. 
F.        OTHER Factors
25.       Culture:  NO
26.       Trans-border:  YES
27.       Rights: NO
     Both phases of the pulping process are subject to trans-border
arrangements.  The shipping of the raw materials to processing
plants is one part, while the delivery of the final pulp product
constitutes the other part of the pulping industry.
28.       Relevant Literature

                           References




                                References

[End notes will be added]


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