The debate in Washington over a new chemical facility – to make methanol, a building block of plastics – has centered on its GHG emissions. Proponents have claimed the facility would yield significant climate benefits, but a government regulatory body invalidated a key permit because, in part, the local agencies that performed the environmental review had “failed to fully analyze the impacts of greenhouse gas emissions from the Project.”

In this brief, the authors use this case study to develop principles for assessing whether major industrial development is consistent with climate goals. They look at how GHG emissions effects are assessed, and show the importance of taking a more global perspective that examines the emissions effects beyond jurisdictional boundaries.

The authors also consider the importance of being able to determine, with confidence, that large long-lived industrial investments fit into a deeply low-carbon future. If new industrial facilities themselves are not consistent with the Paris Agreement goal to keep warming “well below” 2 degrees Celsius, then they could actually make a transition to a low-carbon future more difficult.

Key points from the report:

• Industry is a major contributor to climate change. Industrial products are also needed to build a lowcarbon economy. A “climate test” for new industrial development would help policy-makers balance these tradeoffs

. • To be consistent with a deeply low-carbon economy, a new industrial facility should make its product with low GHG emissions and not lock in a technology or product inconsistent with a low-carbon transition

. • By these measures, the proposed methanol facility at the Port of Kalama in Washington State appears to fall short. The facility would use natural gas to make methanol as a primary product for olefins (plastics). There are several ways to produce olefins with much lower GHG emissions.

• The Kalama facility would offer a climate benefit if it were to displace higher-emitting coal-based methanol plants, but there is little evidence that this would be the outcome. Instead, it could displace more common olefin production methods, based on ethane or naphtha feedstocks, and increase global GHG emissions