U.S. Plans to Try Again on HFC With The `Biggest Climate Deal' This Year
The U.S. plans a second stab at a greenhouse-gas proposal, arguing that carbon trading isn’t the best way to eliminate hydrofluorocarbon-23, an industrial waste product that traps 11,700 times as much heat as carbon dioxide.
The Montreal Protocol, signed in 1987 after scientists discovered a hole in the earth’s ozone, could be a vehicle for saving hundreds of millions of dollars now spent via emissions trading, said Dan Reifsnyder, the official responsible for ozone protection at the U.S. Bureau of Oceans, Environment and Science. The cost of including an HFC phase-down in the protocol would be “millions rather than billions,” said Washington- based Reifsnyder in a phone interview on Sept. 16.
The U.S.-backed proposal, also supported by Canada, Mexico, Micronesia and the Philippines, would save 88 billion metric tons of carbon-dioxide equivalent through 2050, according to a statement e-mailed by Reifsnyder’s office. That’s almost three times the amount of global emissions generated each year from the burning of fossil fuels.
“This is the biggest climate deal on the table this year,” Durwood Zaelke, president of the Institute for Governance & Sustainable Development, a Washington-based environmental lobby group, said yesterday in an interview.
Under the U.S.-backed plan, chemical plants would destroy HFC-23, a byproduct of making refrigerants and air conditioners, using money from the Montreal Protocol Multilateral Fund rather than the United Nations-administered Clean Development Mechanism. Details of who would pay into the fund and how much it needs will be the subject of negotiations over the next few months, Reifsnyder said.
Failed in Egypt
The proposal, which failed to win enough support at UN- sponsored talks in Egypt last year, will be presented again at a meeting starting Nov. 8 in Kampala, the capital of Uganda.
China, India, Brazil and South Africa may resist the U.S.- supported plan, making it unlikely to succeed this year, Zaelke said. China is concerned about the cost of alternative processes that would eliminate production of HFC, he said.
Global carbon-dioxide emissions from fossil-fuel use totaled 30.4 billion tons in 2008, according to the latest data available from the U.S. Department of Energy. That’s a 1.7 percent increase from 2007. UN envoys have said a global- climate agreement is unlikely at a meeting later this year in Cancun, Mexico.
Under the plan to revise the Montreal Protocol, developed nations would cut HFC output to 15 percent of baseline emissions by 2033, while developing nations would have until 2043. Baselines are averaged over 2004-2006, according to the proposal.
Increased Scrutiny
The increase in HFC stems from earlier efforts to avoid ozone-depletion, Reifsnyder said. While HFC destroys less ozone than some older chemicals, it is among the most potent of greenhouse gases, which scientists blame for global warming. The Montreal Protocol is an appropriate instrument for slowing output, he said.
The executive board for the UN’s Clean Development Mechanism, known as the CDM and created under the 1997 Kyoto Protocol to lower greenhouse-gas emissions, is increasing its scrutiny of projects in developing nations that receive credits for destroying HFC-23. The UN review won’t be complete until after the Kampala meeting.
The CDM has issued 218.6 million metric tons of credits to HFC-23-destroying projects since 2005. They are valued at 2.8 billion euros ($3.7 billion) at the average credit price of 12.65 euros a ton during the past two years.
Developing nations have been seeking more funding from richer nations for projects to adapt to climate change. These emerging countries blame industrialized nations for most of the heat-trapping emissions generated over the past 100 years.
Resistance
Investors and some developing nations may resist alternative plans for cutting HFC.
“There are vast amounts of money to be made under the CDM,” Reifsnyder said. “Why would people be more interested in destroying them more cheaply under the Montreal Protocol?”
Destroying HFC-23 can cost as little as 17 euro cents a ton of CO2 equivalent, said the Environmental Investigation Agency, a lobby group based in London and Washington. The annual bill to destroy global HFC-23 production could be as small as $60 million, the agency said Sept. 3. That’s less than the carbon- credit revenue earned from one HFC-23 reduction plant in India, it said.
“I think it’s unlikely that the countries receiving such huge sums under the CDM will agree to all HFC-23 being covered by the Montreal Protocol until a clear political signal is sent by developed countries to say they will no longer fund HFC-23 via the CDM,” Fionnuala Walravens, a campaigner for the lobby group in London, said today by e-mail.
Some chemical plants in developing nations could still win credits under the plan by cutting HFC more quickly than at the proposed rate, Zaelke said. “There’s still room to make a bit of extra money.”
To contact the reporters on this story: Mathew Carr in London at m.carr@bloomberg.net
To contact the editor responsible for this story: Stephen Voss on sev@bloomberg.net
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