Businesses Back US-China Climate Deal

Yes… those that stand to profit from it by ripping off consumers — as was the case with the CFC ban and Montreal Protocol.

the 25th Anniversary of the Montreal Protocol


September 16th marked the 25th anniversary of the ratification of the Montreal Protocol on Substances that Deplete the Ozone Layer, one of the world's greatest environmental protection success stories. The United States played a leading role during its negotiation in 1987 and, today, Americans continue to benefit from its impacts. By phasing out the production of chemicals that threatened the ozone layer, the Montreal Protocol today protects the health of billions of people across the world.

In the 1970s, evidence began to surface that certain products we use every day, from aerosol spray cans to refrigerators, contained chemicals known as chlorofluorocarbons (CFCs) that were depleting the Earth’s protective ozone layer and increasing the level of ultraviolet radiation reaching the Earth’s surface. Overexposure to ultraviolet radiation can cause serious health problems, including higher incidence of skin cancer, and negatively impact our environment by damaging crops and food sources.

The United States was instrumental in crafting a solution to this risk. On September 16, 1987, twenty four nations, including the United States, signed the Montreal Protocol. Today, all 197 member nations of the United Nations have followed our lead, making it the most widely ratified international environmental agreement in history.

The Montreal Protocol has been and continues to be a clear and resounding success. The United Nations estimates that global production of ozone-depleting substances has fallen 98% since ratification. As a result, the ozone layer is recovering, and experts project that it will return to its pre-1980 levels as early as 2060.
When the world first grappled with the challenge of a diminishing ozone layer, few substitutes existed for ozone-depleting chemicals and many observers warned that tackling the problem would impose tremendous economic burdens. But global innovation, led by a number of American companies, proved them wrong. An unprecedented research and development effort has led to the rapid, widespread adoption of low-cost alternatives to harmful CFCs. Today, everyday products that once contained CFCs, from spray cans and computers to furniture and packing peanuts, are produced with ozone-friendly materials.

These accomplishments have produced real benefits for Americans, preventing sicknesses and deaths, and saving us money on health care costs. In fact, the U.S. Environmental Protection Agency estimates that every dollar invested in ozone protection provides $20 in health benefits here at home.

The Montreal Protocol has also played a significant role in helping to address climate change. Many ozone-depleting substances are potent greenhouse gases. By dramatically reducing the production of these substances, the Montreal Protocol has so far averted the equivalent of 135 billion metric tons of carbon dioxide worldwide, according to United Nations estimates.

In the 1970s and 1980s, there was widespread concern that the depletion of our ozone layer would have a long-lasting negative impact on our health and communities. Today, thanks to the United States’ leadership on important environmental issues, we are well on our way toward restoring the ozone layer, and its benefits. On the 25th anniversary of this agreement, it is important to recognize that the success of the Montreal Protocol is not only a cause of celebration, but also a model of how we can work together to build healthier, cleaner communities and spur innovation and economic growth.


Introduction to the Montreal Protocol

The Montreal Protocol is widely considered as the most successful environment protection agreement. The Protocol sets out a mandatory timetable for the phase out of ozone depleting substances. This timetable has been reviewed regularly, with phase out dates accelerated in accordance with scientific understanding and technological advances.

The Montreal Protocol sets binding progressive phase out obligations for developed and developing countries for all the major ozone depleting substances, including CFCs, halons and less damaging transitional chemicals such as HCFCs.

The Multilateral Fund, the first financial mechanism to be created under an international treaty, was created under the Protocol in 1990 to provide financial assistance to developing countries to help them achieve their phase out obligations.

The Montreal Protocol targets 96 chemicals in thousands of applications across more than 240 industrial sectors. The Multilateral Fund has provided more than US $2.5 billion in financial assistance to developing countries to phase out production and consumption of ozone depleting substances since the Protocol’s inception in 1987.

The Protocol has been further strengthened through five Amendments - London 1990, Copenhagen 1992, Vienna 1995, Montreal 1997 and Beijing 1999 - which have brought forward phase out schedules and added new ozone depleting substances to the list of substances controlled under the Montreal Protocol.
The Montreal Protocol has also produced other significant environmental benefits. Most notably, the phase out of ozone depleting substances is responsible for delaying climate forcing by up to 12 years.

Universal ratification of the Montreal Protocol on Substances that Deplete the Ozone Layer

Damage to the Earth’s protective ozone layer has sparked unprecedented worldwide concern and action. Since it was agreed internationally in 1987 to phase out ozone depleting substances (also known as ODS), 196 countries have ratified the Montreal Protocol. In September 2009, East Timor ratified the Montreal Protocol, making it the first international environmental treaty to achieve complete ratification - a truly remarkable effort that reflects the universal acceptance and success of the agreement.

The industry that relies on the coolant is on board, too. Francis Dietz of the Air Conditioning, Heating and Refrigeration Institute said businesses want long-term predictability even if it means short-term costs to perfect replacements. Even DuPont Co., a major chemical manufacturer that makes HFCs, supports phasing them out and has been developing alternative products.

Disparate interests ranging from environmental activists to businesses and industry are lining up to support a first-of-its-kind deal between the U.S. and China to phase out a chemical blamed for climate change.
Although it took most proponents by surprise, the deal was in the bag before President Barack Obama and Chinese President Xi Jinping arrived at the California desert retreat where they announced it over the weekend. And for China, it came only after a change in financial incentives made it more lucrative to get on board than to continue holding out.

The thermometer was hitting 103 on a lush estate outside Palm Springs on Saturday when the White House said that Obama and Xi, the leaders of the world's two largest economies, had struck a deal showing China was getting serious about the warming of the planet. The White House trumpeted it as an example of practical cooperation with the polluting superpower—a bright spot in a summit dominated by testier issues like cyberspying.
Curbing Climate Change With Technology: IEA
Maria van der Hoeven, executive director of the IEA, talks about the need for policymakers to act now to tackle climate change and how they're hoping to get emerging countries involved. 
The idea is for the U.S. and China to work together to use a decades-old ozone-protection treaty called the Montreal Protocol to phase out hydrofluorocarbons—coolants that flow through your refrigerator and air conditioner. HFCs don't deplete the ozone layer, but they're potent greenhouse gases, far more powerful at trapping heat than carbon dioxide.

Offering grand predictions, the White House and environmental groups said a global phasedown of HFCs could, by 2050, eliminate about two years' worth of greenhouse gas emissions from current levels. Former White House Chief of Staff John Podesta, now the chairman of the Center for American Progress, said it could avert almost a degree in Fahrenheit of warming temperatures by the end of the century.

The industry that relies on the coolant is on board, too. Francis Dietz of the Air Conditioning, Heating and Refrigeration Institute said businesses want long-term predictability even if it means short-term costs to perfect replacements. Even DuPont Co., a major chemical manufacturer that makes HFCs, supports phasing them out and has been developing alternative products.

"It's a model for broader climate change initiatives," said Sen. Ben Cardin, a Maryland Democrat who urged Obama before the summit to bring it up with the Chinese.

It was a visit to Beijing by Secretary of State John Kerry in April that set the process in motion, according to an administration official, who wasn't authorized to speak on the record and demanded anonymity. He sent Todd Stern, the U.S. special envoy for climate change, back to China two weeks ago to continue the discussions. In a series of video conferences and phone calls in the week leading up to the Obama-Xi summit, the two countries hashed out a deal and agreed to unveil it in the California desert.

The concept dates at least to 2009, when the U.S., Canada and Mexico proposed using the 1987 Montreal Protocol to phase out HFCs, which had been used to replace other refrigerant chemicals that do deplete the ozone layer. Unlike the global warming-focused Kyoto Protocol, which the U.S. never ratified, the Montreal Protocol has been met with little ideological resistance, and the Senate voted unanimously to approve it. Every country in the world is a party to it, the White House said.

More than 100 countries have backed using the existing treaty to deal with HFCs, but China—the world's biggest producer of HFCs—and other developing nations like India and Brazil have blocked it. And where China goes, the others were expected to follow—a phenomenon that may extend to other global climate efforts.
"China is the biggest kid on the block," said David Doniger of the Natural Resources Defense Council. "Our perception is they have been sticking together" with India and Brazil.

For Obama, whose bold vow to slow the rise of the oceans has confronted major obstacles, it was an opportunity to show action on a key aspect of his domestic agenda. In his second-term inaugural, Obama pledged to take action alone if Congress would not, but he has frustrated environmental activists by being slow on the uptake when it comes to regulations under his control.

"Congress is not willing to even hear from the scientists—let alone take action," said Rep. Henry Waxman of California, another Democrat who pushed Obama seek a deal with the Chinese. "The president has to act wherever he can."

For notoriously pragmatic China, it may have been more about dollars and cents.
Environmentalists complained for years that China abused a system that let European companies meet greenhouse gas limits by purchasing credits from factories and power plants in China and other developing countries that reduced their own emissions. But the credits were priced based on how much carbon dioxide equivalent was eliminated. A potent byproduct of HCFs, known as HFC-23, traps thousands of times as much energy, so credits for the destroying byproduct sold for up to 70 times the cost of eliminating the gas itself.

The payments were so generous that Chinese companies had an incentive to produce more gas, said Clare Perry, a senior campaigner for the London-based Environmental Investigation Agency. She said China's government shared in the windfall, reaping more than $1 billion through a 65 percent tax on payments for destroying the byproduct.

The European Union eventually caught on, and banned payments for the byproduct effective May 1. A week earlier, the U.N. Environmental Program said it would pay Chinese companies up to $385 million by 2030 to phase in HFC alternatives. Taken in tandem, the two moves eliminated the incentive to keep HFC production high while introducing a new incentive to phase out the gas.

The first test for whether the U.S.-China deal will presage a global breakthrough comes in two weeks, when the Montreal Protocol nations meet in Bangkok. If other developing countries like India follow China's lead, negotiations could start on implementing a phase-out. That process is likely to take years.

What's still unclear is whether Congress would have to ratify the change to the protocol. There has been little appetite in Congress for climate legislation—especially among Republicans.

The administration official said he believes such a change would have to go back to Congress. Waxman said he thinks it can be accomplished under the existing protocol. Cardin said he didn't know.


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