No matter where one comes down on the issue of greenhouse gases and global warming, there is a growing consensus that some sort of carbon tax/cap & trade regime is inevitable in the U.S. What effect will the imposition of a charge for greenhouse gas emissions have on process economics in the chemical industry? Answering this question is the object of an ongoing effort at SRI Consulting.

This presentation will discuss some of the issues that have been encountered in SRIC's work to quantify the potential impact of greenhouse gas costs on the industry. We will look at an example that illustrates the sources of emissions and how they are accounted for. The numbers generated can be used to estimate the sensitivity of process economics to the value of carbon credits. We have found that for many processes the cost of credits, even at today's carbon values, is likely to be a large fraction of current profit margins.