We live in a fractious world dominated by conflicting claims and competing interests, but every now and then an issue comes along in which practically everyone arrives at the same answer when making their cost-benefit calculations.
That is what happened a generation ago when concerns about global depletion of the stratosphere’s ozone layer, together with reports of a springtime “ozone hole” in the Antarctic and a smaller “ozone dimple” in the far north, led most countries to join the Montreal Protocol in banning the use of chlorofluorocarbons (CFCs). Even before that protocol was enacted in 1989, consumers began voluntarily boycotting spray cans that used CFC propellants, and the U.S. Environmental Protection Agency had banned aerosol propellants with CFCs by 1978. Most other countries followed suit, even before the Montreal Protocol, and the chemicals’ market share fell rapidly.
Stratospheric ozone is crucial in limiting the doses of ultraviolet radiation that everyone receives from exposure to sunlight. All over the world, people concluded that the risks of widespread negative health effects from increased UV exposure, including more frequent cataracts and skin cancer, outweighed the economic and social benefits of CFCs, especially since alternatives for most uses were quickly made available. CFC production has plunged. But the atmosphere, especially the upper atmosphere, is slow to respond to changes in what we release into it in any given year. While ozone levels had generally been seen as stabilizing, it was only a few months ago that the first scientific literature was published indicating that the stratosphere’s ozone content may actually be beginning to recover.
Following the Montreal Protocol, CFC-based refrigerants were soon replaced largely by compounds consisting of hydrofluorocarbons (HFCs), which have no effect on stratospheric ozone but which are roughly 1,000 times more powerful as greenhouse gases than the much more prevalent carbon dioxide. There is far more controversy today over the extent and potential consequences of human-induced climate change, as well as over the relative costs and benefits of many measures that can be taken to limit it, than there was over the drawbacks of CFCs in the late ‘70s and ‘80s. But earlier this month in the Rwandan capital city of Kigali, negotiators from 197 nations agreed on a binding plan to phase out HFC use in nearly all applications.
Unlike the Paris accords, which dealt with a broader range of climate-change issues, the Kigali agreement sets binding targets on its signatories. Big HFC users like China and the United States will mostly switch to alternate refrigerants within a few years. A few of the poorest and hottest nations – notably India, Pakistan and some countries in the Persian Gulf – will have until 2028. Certain countries that occupy a middle ground will have more time than the big players but less than the very poorest; the entire African bloc voluntarily opted into the middle tier, though many African countries were eligible for the most forgiving timetable.
Unlike other climate deals, the Kigali accord is not under attack, even by skeptics of human-induced climate change or of the modeling that routinely predicts (and almost as routinely postpones) the direst of its consequences. The agreement reflects another cost-benefit calculation: The costs of making massive changes in the fuels used worldwide for transportation and power generation are enormous, and the real-life impacts of those costs on societies are great. These costs must be measured against the nature and uncertainty of any perceived benefits. But the costs of switching away from HFCs are much more readily determinable and manageable, so even if the exact climate consequences and benefits are more speculative, there is less reason to object to making the suggested changes.
But no major policy action ever comes without trade-offs. One of the most readily available replacements for HFC refrigerants is a compound called isobutane. Refrigerant-grade isobutane, known as R-600a, offers the benefits of negligible contribution to greenhouse gases and no impact on the ozone layer. The environmental group Greenpeace acquired the patent rights to isobutene-based refrigeration technology decades ago and placed those rights in the public domain so R-600a could be freely used in refrigerators.
Refrigerators using R-600a, which the environmental group dubbed “Greenfreeze,” are fairly common in developing countries but not in the United States and certain other advanced economies. This is because, like its close chemical cousin butane – long used in cigarette lighters – R-600a is highly flammable. While leaks are rare, they have happened, with explosive results. House fires kill a lot more people every year than climate change does, and nobody wants a leaking refrigerator condenser to burn down a home while a family sleeps. Flammable refrigerants are even dicier when used in automobiles, where an ample supply of explosive gasoline is readily available in the engine compartment, in close proximity to the vehicle’s air conditioning system.
But R-600a will get a second look as a component of your next side-by-side refrigerator or window air conditioner following the Kigali accords. So will other alternatives, all of which have their own pros and cons. The technical details can be worked out, and will be, at a price. The question was whether that price is worth paying; that question has been answered in Kigali.
This is actually not a bad way to tackle extremely complex issues like global climate change. One-shot, broad-brush global solutions are so difficult to achieve among humanity’s competing interests that, at best, parties spend years negotiating something like the Paris deal and still end up having to leave out binding targets, strict enforcement methods or specific action steps. Break the issue down into smaller components, like HFCs, and it becomes easier to agree on exactly who must do exactly what by exactly which date.
It is the antithesis of a comprehensive solution, but a comprehensive solution that is never reached or is not enforceable solves nothing. The ozone layer is changing today because of the specificity and targeting accomplished in the Montreal Protocol. A generation from now, the thermal behavior of the troposphere may show measurable changes because of the agreement reached this month in Kigali.
Larry M. Elkin is the founder and president of Palisades Hudson, and is based out of Palisades Hudson’s Fort Lauderdale, Florida headquarters. He wrote several of the chapters in the firm’s recently updated book,
The High Achiever’s Guide To Wealth. His contributions include Chapter 1, “Anyone Can Achieve Wealth,” and Chapter 19, “Assisting Aging Parents.” Larry was also among the authors of the firm’s previous book
Looking Ahead: Life, Family, Wealth and Business After 55.
Posted by Larry M. Elkin, CPA, CFP®
Delegates celebrate the adoption of the Kigali Amendment to the Montreal Protocol.
Photo courtesy the Rwanda Environment Management Authority (REMA).
We live in a fractious world dominated by conflicting claims and competing interests, but every now and then an issue comes along in which practically everyone arrives at the same answer when making their cost-benefit calculations.
That is what happened a generation ago when concerns about global depletion of the stratosphere’s ozone layer, together with reports of a springtime “ozone hole” in the Antarctic and a smaller “ozone dimple” in the far north, led most countries to join the Montreal Protocol in banning the use of chlorofluorocarbons (CFCs). Even before that protocol was enacted in 1989, consumers began voluntarily boycotting spray cans that used CFC propellants, and the U.S. Environmental Protection Agency had banned aerosol propellants with CFCs by 1978. Most other countries followed suit, even before the Montreal Protocol, and the chemicals’ market share fell rapidly.
Stratospheric ozone is crucial in limiting the doses of ultraviolet radiation that everyone receives from exposure to sunlight. All over the world, people concluded that the risks of widespread negative health effects from increased UV exposure, including more frequent cataracts and skin cancer, outweighed the economic and social benefits of CFCs, especially since alternatives for most uses were quickly made available. CFC production has plunged. But the atmosphere, especially the upper atmosphere, is slow to respond to changes in what we release into it in any given year. While ozone levels had generally been seen as stabilizing, it was only a few months ago that the first scientific literature was published indicating that the stratosphere’s ozone content may actually be beginning to recover.
Following the Montreal Protocol, CFC-based refrigerants were soon replaced largely by compounds consisting of hydrofluorocarbons (HFCs), which have no effect on stratospheric ozone but which are roughly 1,000 times more powerful as greenhouse gases than the much more prevalent carbon dioxide. There is far more controversy today over the extent and potential consequences of human-induced climate change, as well as over the relative costs and benefits of many measures that can be taken to limit it, than there was over the drawbacks of CFCs in the late ‘70s and ‘80s. But earlier this month in the Rwandan capital city of Kigali, negotiators from 197 nations agreed on a binding plan to phase out HFC use in nearly all applications.
Unlike the Paris accords, which dealt with a broader range of climate-change issues, the Kigali agreement sets binding targets on its signatories. Big HFC users like China and the United States will mostly switch to alternate refrigerants within a few years. A few of the poorest and hottest nations – notably India, Pakistan and some countries in the Persian Gulf – will have until 2028. Certain countries that occupy a middle ground will have more time than the big players but less than the very poorest; the entire African bloc voluntarily opted into the middle tier, though many African countries were eligible for the most forgiving timetable.
Unlike other climate deals, the Kigali accord is not under attack, even by skeptics of human-induced climate change or of the modeling that routinely predicts (and almost as routinely postpones) the direst of its consequences. The agreement reflects another cost-benefit calculation: The costs of making massive changes in the fuels used worldwide for transportation and power generation are enormous, and the real-life impacts of those costs on societies are great. These costs must be measured against the nature and uncertainty of any perceived benefits. But the costs of switching away from HFCs are much more readily determinable and manageable, so even if the exact climate consequences and benefits are more speculative, there is less reason to object to making the suggested changes.
But no major policy action ever comes without trade-offs. One of the most readily available replacements for HFC refrigerants is a compound called isobutane. Refrigerant-grade isobutane, known as R-600a, offers the benefits of negligible contribution to greenhouse gases and no impact on the ozone layer. The environmental group Greenpeace acquired the patent rights to isobutene-based refrigeration technology decades ago and placed those rights in the public domain so R-600a could be freely used in refrigerators.
Refrigerators using R-600a, which the environmental group dubbed “Greenfreeze,” are fairly common in developing countries but not in the United States and certain other advanced economies. This is because, like its close chemical cousin butane – long used in cigarette lighters – R-600a is highly flammable. While leaks are rare, they have happened, with explosive results. House fires kill a lot more people every year than climate change does, and nobody wants a leaking refrigerator condenser to burn down a home while a family sleeps. Flammable refrigerants are even dicier when used in automobiles, where an ample supply of explosive gasoline is readily available in the engine compartment, in close proximity to the vehicle’s air conditioning system.
But R-600a will get a second look as a component of your next side-by-side refrigerator or window air conditioner following the Kigali accords. So will other alternatives, all of which have their own pros and cons. The technical details can be worked out, and will be, at a price. The question was whether that price is worth paying; that question has been answered in Kigali.
This is actually not a bad way to tackle extremely complex issues like global climate change. One-shot, broad-brush global solutions are so difficult to achieve among humanity’s competing interests that, at best, parties spend years negotiating something like the Paris deal and still end up having to leave out binding targets, strict enforcement methods or specific action steps. Break the issue down into smaller components, like HFCs, and it becomes easier to agree on exactly who must do exactly what by exactly which date.
It is the antithesis of a comprehensive solution, but a comprehensive solution that is never reached or is not enforceable solves nothing. The ozone layer is changing today because of the specificity and targeting accomplished in the Montreal Protocol. A generation from now, the thermal behavior of the troposphere may show measurable changes because of the agreement reached this month in Kigali.
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