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  • Waxman Markey Cap and Trade's Biggest Losers: Wood Products

    One of the advantages of The Heritage Foundation’s economic analysis of the Waxman-Markey climate change bill is we can determine out who loses most of all the losers. We’ve detailed the negative impacts cap and trade would have on farmers, manufacturers and construction workers. This time, it’s the wood product industry.

    Wood products encompasses everything from logging, sawmills and planning mills, manufacturing veneer and plywood, treating wood products, building wood and mobile homes, building wood containers and pallets, etc. Simply put, it’s everything dealing with wood, and Waxman-Markey hits the industry hard. Wood product employment falls by over 23,000 on average (2012-2035) due to Waxman-Markey climate change legislation. By 2035, cap and trade would reduce the industry by 68,573 people.


    The industry is already struggling: “Booming timber towns with three-shift lumber mills are a distant memory in the densely forested Northwest. Now, with the housing market and the economy in crisis, some rural areas have never been more raw. Mills keep closing. People keep leaving. Unemployment in some counties is near 20 percent.”

    Allegedly, the forestry industry could collect paychecks from the carbon offset program. If a company believes it’s cheaper not to reduce its carbon footprint, it can pay someone else to do so. For instance, a company could pay a logger not to cut down trees, or they could pay someone to grow trees, since trees absorb carbon. The problem is, it’s highly susceptible to fraud and corruption. This has been most evidenced by the EU’s carbon trading plan. As a result, electricity prices are up, windfall profits are plentiful, and carbon reduction is negligible. Consequently, environmental groups are upset knowing businesses profit, consumers suffer, and there is no chance for environmental change. Even the Italian mafia’s getting involved.

    There is also the problem of “proving that emissions cuts are reductions that would not have occurred absent the offset payments is proving difficult. For example, India’s largest exporter of Basmati rice, KRBL, was set to receive several hundred thousand dollars’ worth of CDM credits a year for installing a $5 million generator to produce electricity from rice husks, a renewable energy source. Though the company claimed the biomass generator would not have been installed without funding from the credits, the senior manager at the plant admitted to the British Broadcasting Corp. that KRBL ‘would have done the project anyway.’”

    For the logging industry, there is the lost opportunity of cutting down timber to make profit. It’s highly unlikely the offset program would recover the economic costs Waxman-Markey would inflict. And those offsets wouldn’t cover the rest of the wood products industry hurt by cap and trade.

    If a tree falls in the woods after policymakers pass cap and trade, would anyone hear it? The loggers won’t, because they won’t have jobs anymore.

    Posted in Energy [slideshow_deploy]

    7 Responses to Waxman Markey Cap and Trade's Biggest Losers: Wood Products

    1. Pingback: Waxman Markey Cap and Trade’s Biggest Losers: Wood Products « Live Free Or Die

    2. Mel Parnes New Jerse says:

      I have 10 acres filled with fast growing cedar

      trees. Many of these trees are 20 to 30 feet tall. I am therefore sequestering carbon, many hundreds of tons of it. When can I get in on the 'trade' part. I would like to offset the increase in my electrical bill, fuel etc. I can make fence posts of these trees and the carbon would remain sequestered for at least thirty years after it's cut down.

    3. Barb mn says:


    4. Sean, Washington says:

      AYE! Live free or die! Hopefully we can live free from our coasts being under water within this century, and free from having to ship $300-400 billion overseas every year to buy millions of barrels of imported fuel. Lets also live free from having to send even more money to china and germany to buy wind turbines and solar panels because they're governments have better private sector incentives than ours does, and that's where the innovative companies go. Live free or die indeed!

    5. Michael says:

      A strange application of "Live free or die". That's suppose to apply to lack of onerous regulation. Cap and trade is pretty much death. It's not going to just kill the timber industry, but pretty much every industry. It will increase the cost of everything, and widen the gap between rich and poor even wider. It will be fraught with corruption, because it's built-in.

    6. Lucie-Bierig says:

      This brings me to an idea:…

    7. RouletSystems says:

      I cannot believe this is true!

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