Kyoto's Unintended Consequences

Producing HCFCs to replace CFCs that deplete the stratospheric ozone layer generates HFCs, which have thousands of times the global warming potential of CO2.

Got that?

Let's start over. Certain provisions in treaties to protect the ozone layer and to reduce global warming have become tangled up, thanks to the law of unintended consequences. Untangling and harmonizing them is advisable. A step towards that end was taken last Friday.

First, the ozone treaty. The Montreal Protocol, negotiated 20 years ago, phased out refrigerant chemicals and other substances that deplete the stratospheric ozone layer, which blocks harmful ultraviolet radiation from the sun.

Liberal environmentalists may not be able to bear the thought, but negotiating the Montreal Protocol was one of the Reagan administration's signature achievements. To celebrate its 20th anniversary, the U.N. thoughtfully declared September 16 to be International Ozone Day. It's not too late to send your loved ones a greeting card.

On Friday, Montreal Protocol signatories agreed to accelerate the phaseout of hydrochlorofluorocarbons (HCFCs), which deplete ozone and also are greenhouse gases, both in their production and use.

For the most part, the Montreal Protocol has been a success story. Ozone depleting substances in the stratosphere have fallen from their late 1990s peak. Chief among those depleting chemicals was chlorofluorocarbons, or CFCs.

Scientists project that the ozone layer over the mid-latitudes will recover by mid-century. That's later than expected, partly as a result of higher than expected production of CFC substitutes -- HCFCs. The substitutes do not destroy ozone as aggressively as CFCs, but still cause some depletion.

Under the newly amended treaty, use of HCFCs must end 10 years earlier -- in industrial nations by 2020, in developing nations by 2030.

Still with me so far?

Ten years after the Montreal Protocol was signed, along came the Kyoto Protocol to reduce greenhouse gases.

Kyoto includes a provision that allows companies in signatory industrial nations to pay for emissions reduction projects in developing nations.

Enter the law of unintended consequences. Producing HCFCs creates a waste byproduct called HFC-23. It packs a mean global warming punch.

HCFC manufacturers in China and India used to vent HFC-23 up the stack. Then they figured out that they could destroy the HFC-23 -- and get Western companies in Kyoto signatory nations to pay them handsomely to do so as a way of offsetting the companies' greenhouse gas emissions.

Every pound of HFC-23 that is destroyed offsets 11,700 pounds of CO2 emissions. Consequently, destroying HFC-23 has huge value in the offsets market, far larger than the cost of destroying the stuff. Consequently, the offset deals have generated a fast buck for HCFC manufacturers, an incentive to manufacture more HCFCs, and lots of questions about misallocation of capital that might be better spent on cutting carbon dioxide emissions directly.

No doubt, anticipating such unintended consequences will be on the table as the global community gears up for negotiating a successor treaty to Kyoto, which expires in 2012.

White House Council on Environmental Quality chief Jim Connaughton proposed bypassing Kyoto by way of Montreal. Accelerating the HCFC phase-out by 10 years, Connaughton said, will yield twice as much greenhouse gas emissions reduction benefit as Kyoto, as well as hasten the end of HCFC manufacturing.

Yes, but Kyoto only takes a nibble at reducing emissions and carbon dioxide is the dominant greenhouse gas. If the U.S. government continues dodging the question of capping CO2 emissions, there is little hope for a successful follow-on climate treaty.

Better for the feds to follow the example that the Reagan administration set with the Montreal Protocol. As the Gipper's Secretary of State George Shultz wrote recently in the Washington Post, strong U.S. leadership made the difference in negotiating a successful treaty to protect a global commons. It could work again.

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