Washington Consensus on HFCs

Oct 6th, 2014 | By | Category: Government Policies, Green House Gas Emissions, News

Barak Obama-kB8B--621x414@LiveMintHere are two remarkably similar excerpts from two statements signed between President Barack Obama with two successive Indian Prime Ministers in Washington within a space of just a year. The first is from a statement signed on 27 September 2013 with Manmohan Singh and reads thus: “The two leaders agreed to immediately convene the India-US Task Force on hydrofluorocarbons (HFCs) to discuss, inter alia, multilateral approaches that include using the expertise and the institutions of the Montreal Protocol to phase down the consumption and production of HFCs, based on economically-viable and technically feasible alternatives and include HFCs within the scope of the United Nations Framework Convention (UNFCCC) and its Kyoto Protocol for accounting and reporting of emissions.”

The second is from a statement signed with Narendra Modi on 30 September and reads thus:

“The leaders recalled previous bilateral and multilateral statements on the phase down of hydrofluorocarbons (HFCs). They recognized the need to use the institutions and expertise of the Montreal Protocol to reduce consumption and production of HFCs, while continuing to report and account for the quantities reduced under the UNFCCC. They pledged to urgently arrange a meeting of their bilateral task force on HFCs prior to the next meeting of the Montreal Protocol to discuss issues such as safety, cost and commercial access to new or alternative technologies to replace HFCs. The two sides would thereafter cooperate on next steps to tackle the challenge posed by HFCs to global warming.”

Clearly, a political consensus seems to have emerged in the Indian political establishment at the highest levels that India’s long-held stance on HFCs needs to change—and change in both the national and global interest. HFCs are substitutes for ozone-depleting substances such as chlorofluorocarbons (CFCs) and hydrofluorocarbons (HCFCs) that are used largely in refrigerators and air conditioners. CFCs have been phased out completely and HCFCs are being phased out gradually and will disappear by 2040. However, HFCs, while they solve the ozone depletion problem, contribute hugely to global warming since they are greenhouse gases. They have vastly more global warming potential than carbon dioxide, on which the world has been focused so far, and they have long atmospheric life spans. Given the phenomenal expansion in the use of refrigerators and air conditioners, HFCs could account for at least one-fifth of the greenhouse gas inventory by the year 2050, up from the present share of around 2%. Consequently, the world community has been calling for a phase down (and not a phase out, it should be noted) of HFCs under the Montreal Protocol, the most successful international environmental agreement that came into being in 1987. But countries such as China and India have been resisting the move and have been insisting that the HFC issue should be a part of the UNFCCC negotiations if at all. UNFCCC is really a recipe for inaction and for talk and talk.

However, last year, China signalled a change in its stance and agreed that negotiations must begin for the phase down of HFCs under the Montreal Protocol which has also a Multilateral Fund that funds the incremental costs of conversion. Since then India has been the only major country holding out. With the statements that both Singh and Modi have signed in almost identical language, it can now be reasonably expected that India will also drop its obstructionist stance and negotiations on HFCs phase down could well begin soon. This is very important because such a phase down could prevent a 0.5 degree Celsius increase in global average temperature. The Prime Minister will, however, have to ensure that the negotiating bureaucracy does not undermine his joint statement with President Obama like it did on the previous occasion. If these negotiations do not begin in the next three-four months, India’s credibility will take a severe knock. The 30 September joint statement also refers to cooperation to reduce pollution in India.

This is timely and welcome but sounds somewhat hollow, given the fact that the central government is enthusiastically pushing for a review of all environmental laws and regulations with the ultimate purpose no doubt of diluting them. It is unlikely that those at the helm of affairs would read the American Economic Review, the most prestigious publication of the economics profession. This is a pity because in a very recent issue, Michael Greenstone of the University of Chicago and Rema Hanna of Harvard University have published the most detailed analysis ever of the impacts of key air and water pollution control regulations in India. Their conclusion is that the regulations have generally had a positive impact on reducing air pollution but less so on reducing water pollution mainly because of the failure to keep fecal coliform levels within acceptable limits, which, in turn, is because of the lack of adequate and proper sewage treatment infrastructure. Environment has already become a serious public health issue across the country and past success notwithstanding, much more needs to be done both on the air and water pollution front both in terms of promulgating new standards (like for sulphur dioxide emissions from power plants) and of ensuring compliance with the standards. There is also a role for trying out new market-friendly instruments for enforcing standards like what the US itself did in the 1990s for dealing with the problem of acid rain caused by the emissions of sulphur dioxide. A pilot experiment had been initiated in this regard four years back with the help of economists at Massachusetts Institute of Technology and Harvard led by the redoubtable Esther Duflo and in the background of the latest joint statement it is clearly time to take that experiment forward.

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