Government Incentives for Green Jobs Challenges and Opportunities Good Jobs, Green Jobs National Con

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Government Incentives for Green JobsChallenges
and OpportunitiesGood Jobs, Green Jobs National
ConferenceFebruary 6, 2009, Washington,
D.C.Christopher J. Brescia, Smurfit Stone
Container Corporation

• Smurfit-Stone discovers and delivers
  opportunities to increase our customers
  competitive advantage through our real world
  packaging expertise, global resources and an
  abiding respect for the environment.

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Agenda

• Forest and Paper Industry
• A legacy of green jobs
• Government initiatives and their impact
• Challenges
• Economic considerations
• Conclusion

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Patrick J. Moore, Chairman and CEO

• To have fully informed public policy
  discussions on energy requirements, sustainable
  forestry and the mitigation of climate change, we
  must follow a path that includes ongoing dialogue
  involving diverse interests.
• We cannot achieve sustainable forestry without
  a robust forest products industry. Our industry
  is the link between sustainable forestry
  management and the benefits both bring to
  mitigating climate change and evolving increased
  reliance on renewable fuels.

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Green Jobs are

• employment opportunities in four industry
  sectors that are part of the green economy
• including
• Green Products
• Renewable Energy
• Green Services
• Environmental Conservation
• Source

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Green Jobs

• Rebuild a strong middle class
• Middle skill jobs
• New but..More are existing jobs being
  transformed
• Local jobs
• Strengthen urban and rural communities
• Jobs that save the planet earth
• Source

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Government Programs and Initiatives

• Renewable fuel standard (RFS)
• 21 billion gallons of advanced biofuels by 2022
• Proposed renewable portfolio standard (RPS)
• 15 to 25 requirement proposed
• More than 26 states have RPS policies
• State and regional groupings focusing on
  reduction of greenhouse gas are further
  encouraging woody biomass use

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Government Objectives

• Greater energy independence
• Shift fuel sources to domestic production
• Reduce fossil fuel use
• Reduce greenhouse gas emissions
• Incentives and financing for biomass-based
  electricity and transportation fuels
• Provide research capital and move to production

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Government Tools

• Mandates Federal, State, Local
• Incentives to achieve mandates
• Investment Tax Credits
• Capital Grants
• Guaranteed prices
• Consumer rebates
• Excise and property tax exemptions
• Funding through grants and loans RD and
  Commercialization

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Industry Impacts

• Potential for shift away from traditional forest
  products production
• Program targets need to be adjusted
• Supply must be increased
• Biomass availability is poorly understood
• Focus is on whats physically available vs. what
  is technically or economically available - or
  sustainably removed
• Thinning is generally considered the least
  cost-effective
• Removal of commercial timber is necessary to make
  the numbers work
• Without sustainable harvesting removals
  growth, economic impacts will be severe

Source The Forest Biomass Harvesting Working
Group Report of the Blandin
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Challenges

• Since 2006 the forest products industry has lost
  more than 181,000 jobs, or roughly 14 of our
  workforce (AFPA)
• Policy incentives may create a supply imbalance
  and an 8 billion additional burden (McKinsey)
• Woody Biomass prices on the rise
• Round wood prices have increased by 20 to 40
  (McKinsey)
• Bio-fuel plants will locate where infrastructure
  already exists, not necessarily where wood supply
  is greatest -- creating direct competition with
  existing industries

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Challenges - Job Impact

• Will government incentives for bio-energy create
  a net increase in green jobs?
• Without federal lands current wood supply
  insufficient to sustain bio-energy and forest
  products industry
• Incentives putting forest products at a
  competitive disadvantage
• Paper mills create 13 times more jobs than
  bio-energy plants

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Economic Considerations

• Making wood products can be as much as 8 times
  higher economic value than using wood for
  combustion (RPS)
• Making paper and wood products employs 13 times
  more people when compared to the equal use of
  wood to create biofuels (RFS)
• The economic and social fabric of countless rural
  communities are in the balance if public policy
  errs
• The sustainability of our forest resources must
  be protected against lower value economic choices

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Economic Considerations Eight Times More Added
Value
Source Poyry Forest Industry Consulting Oy
Foreco Oy CEPI Presentation
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Employment Considerations13 Times More Jobs
Source Poyry Forest Industry Consulting Oy
Foreco Oy CEPI Presentation
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Best Economic Value to Society
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Win/Win Opportunity

• Government policy and subsidies should focus on
  research and development of technologies needed
  to economically produce biofuels adjust targets
• The market should determine the best use of the
  feedstock
• Restore balance between demand and supply
• Require sustainable forest management practices
  for any wood-based fuel or energy produced with
  tax or incentive advantages
• Treat all industries using or producing energy
  from renewable fuels equally

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Conclusion

• The Forest and Paper industry have been stewards
  of the forests for generations supporting
  communities and sustainable practices
• We support the growth of bio-energy production,
  but not at the expense of existing jobs and
  social and environmental losses
• If incentives are used, they must assure against
  creating an imbalance in the market between
  demand and supply
• Existing green jobs must not be disadvantaged for
  additional green jobs