Why business will welcome The Montreal Protocol on HFCsEmilie Prattico
Last Friday, a new milestone was reached that spells positive news for the climate, and opens up new opportunities for business to be an active force in the transition to a 2 degree world.
In a landmark decision reached on Friday 14 October in Kigali, Rwanda, nearly 200 countries agreed to a ninth amendment to the Montreal Protocol, that will phase out the use of hydrofluorocarbon (HFCs), and promote energy efficiency improvements that will reduce its consumption while still in use. Combined, these measures can avoid the equivalent of up to 80 billion tons of carbon dioxide being released into the atmosphere by 2050, and up to 0.5 Celsius of warming by the end of century.
Before the Paris Agreement was reached on December 12, 2015, the blueprint for a diplomatically successful and practically effective international environmental treaty was the Montreal Protocol. Agreed upon by 197 parties in 1987, and entering into force in 1989, it was designed to protect the ozone layer and reduce global warming by phasing out the production of numerous substances, that are responsible for ozone depletion. Together with its eight amendments, the agreement resulted in phasing out the production of many of those substances.
In the course of these phase-outs, HFCs were introduced as replacements for these ozone-depleting substances in air conditioning, refrigeration, foam-blowing, fire retardants, solvents and aerosols – yet they are also ozone-depleting themselves, albeit somewhat less so. Their lifespans vary, but depending on usage, they remain in the atmosphere for a minimum of 15 years. Before the Kigali amendment, the prevalence of HFCs was growing at a rate of 10-15% per year.
Of course, this is essential news for the Paris Agreement since its ambition cannot be met without reducing HFC emissions. Indeed, without the fast implementation laid out by the amendment, HFCs could add 0.1°C to the global average temperature rise by 2050, increasing to 0.5°C by 2100. What is more, with a three-track structure that allows countries at different stages of development to phase out at their pace, the agreement displays a pragmatic approach to implementation.
This is also welcome news for business. Even before the ninth amendment was ratified, many companies had already made ambitious commitments on HFCs via the We Mean Business platform and the White House’s Climate Action Plan, both of which offer the opportunity to companies to commit to reducing all short-lived climate pollutants including HFCs. As BSR will show in an upcoming report, cost effective technologies needed to deliver the HFC phase-out are already available and, crucially, offer a highly beneficial opportunity for developing countries to leapfrog old, polluting devices. These include natural refrigerants such as CO2, hydrocarbons, ammonia and water, as well as secondary cooling systems – desiccant, evaporative and absorption – and innovative building designs that can remove the need for mechanical cooling.
While this signals a need for change in the chemical production industry, in any supply chain that relies on a cold chain – such as the food or pharmaceutical industries, companies also stand to benefit enormously from the big efficiency gains resulting from the recent agreement. Agriculture, oil and gas, transport, waste management, and all sectors emitting hydrofluorocarbons (HFCs) from air conditioning, foams, or other manufacturing processes can integrate mitigation measures into the heart of their operations and supply chains and push for faster development of alternative technologies.
The political will expressed to support this transition leaves no doubt that it will be a success. World Bank President Jim Yong Kim announced $1 billion in lending over the next five years to support energy efficiency to accompany the HFC phase down. This will complement an $80 million dollar fast-start fund pledged last month by donor states and 19 private philanthropists, in addition to their regular donations.
With business opportunities already being availed of, global political and economic will manifested as financial support, and not one, but two international legal agreements providing policy certainty for decades to come, Friday’s decision marks yet another victory in the battle against climate change.