Global environmental politics: Lessons from Montreal

Global environmental politics: Lessons from Montreal

ENVIRON IMPACT ASSESS REV 1994;14:3 9 3 VIEWPOINT GLOBAL ENVIRONMENTAL POLITICS: LESSONS FROM MONTREAL Joanne Kauffman Massachusetts Institute oj ...

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ENVIRON IMPACT ASSESS REV 1994;14:3 9

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VIEWPOINT

GLOBAL ENVIRONMENTAL POLITICS: LESSONS FROM MONTREAL

Joanne Kauffman Massachusetts Institute oj Technology

When 24 nations and the European Community signed the Montreal Protocol in September, 1987, it was widely praised for its reflection of unprecedented foresight in mandating preventive action on a global scale. Such praise may have been premature in light of more recent revelations that: (1) the rates of ozone depletion appear to be accelerating; and (2) the depletion seems to be spreading into the summer months over the north temperate zone of latitudes. Although there is still controversy over what the effects of such depletion ultimately will be, most nations of the world, including all of the advanced industrialized countries, agree that chlorofluorocarbons (CFCs) must be phased out of all production and use, and they are taking steps to do that before the turn of the century. Two distinctly different conclusions are thus possible regarding the outcome of the negotiations. As the first successfully negotiated multilateral agreement to address a global environmental problem, the Protocol is seen by many to be a triumph of environmental awareness and international cooperation. To other observers, however, the struggle for domestic commercial interests and national political debates that led to delays in action may already be causing serious and irreversible damage that could have been avoided. In short, the negotiation process worked, but it took too long for nations to agree that it was necessary and to begin the process. Given these two perspectives, what we want to know from analysis of the Montreal Protocol is what lessons if any can be drawn from this experience that may help international policy-makers to move more quickly on other problems that threaten the global environment. Address requests fi~r reprints to: J~mnne Kauffman, Kennedy Scho~l of Goverqment, Harvard Univerqty, Cambridge, MA 02138.

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Science, Politics, and Economics The story of the Montreal Protocol is ultimately about the complex intersection of science, politics, and economics. In it are lessons for the current debate about its implementation in both developed and developing countries as well as for other attempts to deal with international environmental concerns including global warming. The long debate over whether or not CFCs were in fact responsible for ozone depletion for the most part concerned attempts to reduce scientific uncertainty. But the debates over the degree to which the science sent a clear enough signal on which policy-makers could act masked the equally important need to reduce economic uncertainties. Until government decisionmakers and their industries were convinced that they could overcome such economic uncertainties, progress to severely restrict or ban CFCs was negligible. Only when the producer industries were convinced that they could recapture profits lost in a CFC phaseout did an international agreement become imminent. The international scientific community was mobilized through the efforts of UNEP to reduce the scientific uncertainty that clouded the issue and prevented international action. At the same time there seemed to be a correlation between scientific uncertainty and efforts to reduce technological uncertainty. In the wake of publication in 1974 of the Rowland/Molina hypothesis, major CFC producers, notably DuPont and Britain's Imperial Chemical Industries (ICI), undertook R&D on substitutes for the older compounds CFC l I and 12. This research was abandoned, however, in the early 1980s when scientific estimates of ozone depletion declined and uncertainty about the negative effects of CFC emissions increased. At the same time, worldwide consumption of the compounds decreased. As the 1978 United States EPA ban on nonessential use of CFCs in aerosols went into effect, the industry found readily available substitutes such as butane for aerosol products. As substitutes became available consumer demand for nonCFC-containing products in European markets also occurred. By the mid 1980s, the production of CFC 11 and 12 was no longer a highly profitable business. At the same time as CFC 11 and 12 markets declined, that of CFC 113 for use as a solvent in the electronics industry increased dramatically. Absent regulatory pressure to develop substitutes, the industry had no incentive to further develop the substitutes they knew would require significant capital investment and would be more expensive on international markets. In the meantime, worldwide demand for CFCs was increasing for many uses other than in aerosols including refrigeration, automobile air conditioning, and rigid foam in addition to industrial solvents. By 1984, production of CFCs 11, 12, and 113 actually surpassed the peak year, 1974. Two events occurred in 1985 that would rekindle interest in developing more environmentally benign substitutes. The first was the adoption of the Vienna

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Convention in which countries agreed only that further study and monitoring were necessary. But the countries also agreed on a specific timetable to revisit the issue and agree to international regulation if the scientific results demonstrated that such regulation was necessary. The second event strength ened public opinion about the seriousness of the risk and, perhaps, strengthened resolve among the proponents of international regulation. By itself, the Vienna Convention would have been an agreement without any teeth whatsoever--vulnerable to exactly the criticism that has been levied on the Global Warming Convention agreed to at Rio in 1992. But the second event rendered the convention with its requirement to reopen diplomatic negotiations on a legally binding control protocol politically potent. This was the discovery two months after the Vienna meeting of the Antarctic ozone hole by British scientist Joe Farman and his research team at the British Antarctic Survey. Even though CFCs were not conclusively linked to the thinning of stratospheric ozone identified in the Farman report, the dramatic image of a "hole in the sky" from unknown sources was enough to reignite strong public interest in the problem and consumer demand for alternatives to the one potential cause of the problem over which they had some influence. In addition, the discovery helped to reduce some of the political uncertainty that surrounded what was perceived to be a highly technical issue far removed from the major political issues and problems that most governments had to deal with. Ironically, Farman's discovery and the naming of it as a "hole in the sky" brought the issue of ozone depletion down to earth by instantly according it political resonance. Within a year of Farman's discovery, DuPont let it be known that the technological hurdles to substitute development could indeed be overcome given sufficient economic incentives--i.e., lucrative markets. Its major competitor, ICI, capitulated soon after and the U.K. opposition to international regulation softened considerably. Countries with little previous interest in the problem because they did not have a CFC producing industry now took an interest in the issue for its environmental capital. Austria, for example, with its significant green movement had nothing to lose and something to gain by actively supporting international CFC regulations. The Scandinavian countries and Canada were in a similar position. They came to be known as the "radicals" during the Montreal Protocol negotiations. Meeting in Montreal in September 1987 as foreseen by the Vienna Convention, representatives of 24 countries and the European Community settled on a compromise agreement to a 50%-reduction in production and consumption of CFCs and halons by 1998. Developing countries were allowed a ten-year grace period in which to comply after the developed countries. Within six months, the agreement was proved to be woefully inadequate by the

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results of the Ozone Trends Panel that causally linked CFCs and ozone depletion and stated that the complete phaseout of all ozone-depleting substances was of paramount importance in protecting the ozone layer. Fortunately, the architects of the Montreal Protocol had built into it a mechanism for review and modification in the event of new scientific, environmental, economic, and technical evidence. This institutional flexibility has been crucial in the ability of countries to agree to more stringent requirements. Most significantly, in 1990 the parties to the Protocol agreed to a complete phaseout of fully halogenated CFCs by the year 2000 and placed other ozone depleting substances (carbon tetrachloride and methyl chloroform) under control as well. In 1992, the requirements were strengthened once again. Still, as noted earlier, some scientists believe that it is a case of "'too little too late" and that despite these bold steps by the international community, permanent damage to the ozone layer may be inevitable. According to Mustafa Tolba, the former head of UNEP who provided the much needed leadership to bring the negotiations to fruition, this is the fault of industry and national economic priorities. The difficulties in achieving agreement at Montreal were not, according to Tolba, over whether or not the environment was damaged: "It was all who was going to gain an edge over whom: whether Du Pont would have an advantage over the European companies or not."h Winners and Losers

In the end, of course, the large CFC producers did gain advantage over smaller finns through the creation of markets by the Montreal Protocol. Only the large well-established firms would have sufficient capital to move quickly into the lucrative substitutes market. The nascent CFC industry in the developing countries would be the most significant losers. Without the R&D and capital resources necessary to develop the technology needed to manufacture substitutes, their industrial capacity would become obsolete as the Protocol was implemented, despite the fact of their burgeoning markets for refrigeration and solvents for cleaning components for the electronics industry.

Compensation for Developing Countries An underlying premise of the Montreal Protocol requirements is that in order to achieve success, they must be adhered to by all nations. In order for developing countries to meet their obligations, they must receive technical and financial assistance from the most industrialized countries. To address the economic and technical imbalance that the requirements create between developed and developing countries, a $240 million multilateral fund was established in the i Muslafa Tolba, quoled in "Now it makes business sense tll save the ozone layer," New Scientist, 29 (October 1988):25.

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amended Protocol in 1991 to provide technical assistance. It is overseen by an executive committee consisting of representatives from seven developed and seven developing countries and is managed by the World Bank. It must be noted, however, that the issues inherent in such assistance are far from resolved. Technical assistance is increasingly viewed by developing countries as crucial to their ability to meet the Protocol requirements. The chemicals restricted under the Montreal Protocol are widely used in refrigeration, foam, aerosols, fire protection, and solvents. These applications contributed significantly to the ability of industrialized countries to achieve a high standard of living at relatively low cost. If third world countries are unsuccessful in developing substitutes to meet the burgeoning demands of their citizens for these applications, they will be under strong economic pressure to abandon the Montreal Protocol restrictions and continue to produce inexpensive, but environmentally harmful, chemicals to meet the consumer demands of their huge populations. In fact, we must reserve judgment on whether the Montreal Protocol negotiations were "'successful." By the year 2010 another two billion people will have joined the human race, exponentially increasing long-term demand on industries highly dependent on CFC-related technology for refrigeration of food, sanitation, and as industrial coolants. Today, there is little disagreement about the correctness of the decision to end production and use of ozonedepleting substances. The question is how this can be achieved in a way that is equitable and that addresses national development aspirations and needs. This same question--still being addressed in the context of implementation of the Montreal Protocol--lies at the heart of the international debates surrounding other global environmental issues such as global warming and species depletion. And as others have pointed out, 2 the political difficulties of achieving global coordination on CFCs were relatively benign compared with the more volatile notion of curbing CO 2 emissions.

Conclusions In light of these discrepancies, the Montreal Protocol may prove to be inadequate as a model for future international negotiations on global environmental problems. Nonetheless, important lessons emerge from the ozone experience that may help decision-makers to better cope with such problems in the future. First, the Montreal Protocol negotiations suggest that the central question in the policy arena of global environmental politics is not how can we reduce pollution? Rather, it is bow can we facilitate the transition to a sustainable 2 See, fi~r example, ion Birger Skjaerseth, "The +successful' ozone layer negllliations: are there any less~lns tll be learned?" Global Environmental Change, December 1992, pp. 292 300~ and James B. Maxwell and Sanford L. Weiner, "Green Consciousness tit Dollar Diplomacy? The British Resp~mse to the Threat of Ozone Depletil+n " International Environmental Affair+ 5( I ) (Winter 1993).

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global economic system in the face of increasingly competitive international markets? In the past, national and international efforts to deal with environmental problems have focused on reducing ecological uncertainties. But it is clear from the experience of the Montreal Protocol negotiations that equally important is the need to rethink the sources of economic and technological uncertainties that surround these issues. In particular, these issues force us to rethink the underlying premises that guide choices in the design of the forces of production in modem societies. At the heart of the matter is the need to find policy mechanisms that tap into the creative energies of industry early on and to provide incentives for industry to maintain an interest and continued investment in R&D on environmentally benign sources of industrial development. This, in turn, may require more govemment]industry cooperation than has been the rule in the past. One manifestation of this change might be government/industry collaboration to create markets for such environmentally benign products. The great difficulties of this effort will require new leadership in government, industry, and the civic sectors--professionals who will bring together understanding of the scientific and technical dimensions of global environmental issues and knowledge of the changing dynamics of international relations, including critical economic, political, and social factors. Identifying who these leaders are, and devising the forums to bring them together, will be one of the great challenges of leaders at national and international levels. Second, there is likely to be greater reliance on international machinery and organizations to deal with the environmental consequences of industrial progress in the future. The frameworks that they devise will be used to protect commercial interests as much as the environment. Given this climate, the experience of the Montreal Protocol clearly demonstrated the importance of strong but flexible institutions that can be used to help manage shifts to environmentally friendly processes and products with a view to maintaining economic viability. Third, cooperation of developing countries is crucial to successful implementation and long-term attainment of the goals of international agreements to cope with global environmental problems. Their cooperation will depend on compensation to ensure that their development goals are not compromised in order to correct the problems caused by rapid industrialization of northern hemisphere countries. In this context, greater understanding is needed of the mechanisms that can result in successful technology transfer that can be executed in an effective and equitable manner. Finally, public pressures for coping with global environmental problems at the national level are not likely to ease in the long-term. What propelled the Montreal Protocol process was not a single overarching event or institution. Rather, a combination of international scientific advances coupled with important domestic economic and political dimensions ultimately motivated

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governments to merge their preferences Ibr regulation. The appearance of the Antarctic ozone hole was significant not only to negotiations on ozone depletion, which it confirmed as a problem. More broadly, it may well have had an enduring impact on beliefs in the "myth of steady progress" widely held in advanced industrialized societies an impact likely to strengthen green consumerism and empower the voters who influenced national progress during the CFC negotiations.