Paper is made by chopping down trees, shredding the logs, boiling this sawdust in a cocktail of chemicals (e.g., sodium hydroxide, sulphides) at 150-175ºC for several hours to extract the cellulose fibers, refining this fibrous slush, then rolling it out into sheets, pressing out some of the water and heating out the rest.
Our model captures the energy intensity, cost breakdown and economics of this process. We think a large new integrated paper mill must charge around $700/ton for a 10% IRR.
The controversy is CO2 intensity. Total energy intensity is usually around 5-6MWH per ton of paper, coming one-third from external energy sources (e.g., electricity, gas, coal) and two-thirds from burning bark and other waste wood residues. IPCC protocols only count the emissions from external energy, suggesting CO2 intensity around 0.4 kg per kg of paper. However, if you believe that chopping down a tree and burning two-thirds of the wood does in fact release CO2 into the atmosphere, then the total CO2 intensity is closer to 2.6 kg CO2 per kg of paper (and actually more than plastic).
We are all somewhat complicit in these emissions, as the average Western person consumes 200kg of paper per year in various forms, underpinning around 0.5 tons of CO2 emissions per person per year from consuming paper products alone.