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State Department Climate Move Hits Snag at White House

The U.S. State Department's effort to combat a class of "super greenhouse gases" many thousands of times more potent than CO2 hit a speed bump at the White House yesterday, jeopardizing its chances of meeting a May 4 deadline.

The goal of the effort is to use the Montreal Protocol to phase down the global use of hydroflurocarbons, or HFCs. While currently used only in small amounts for air-conditioning and refrigeration, these gases are projected to grow astronomically in coming decades.

In response to the White House delay, Sens. John Kerry and Barbara Boxer sent a letter to President Obama today urging him to get behind the State Department plan.

"We understand that your administration is considering offering an amendment to the Montreal Protocol next week that would provide authority to regulate HFCs. We strongly support such an amendment," they wrote.

Reps. Henry Waxman and Ed Markey, leading the push for climate legislation in the House, also supported the State Department plan in a letter sent earlier this month to the White House.

Left unchecked, HFCs would add up to 25 times the current total U.S. emissions to the global burden by 2040, largely because of their use in ever greater numbers in the developing world. They could effectively negate all reductions in CO2 currently being contemplated.

Over the 20 years of its existence, the Montreal Protocol on Substances that Deplete the Ozone Layer has tackled the phase out of more than 90 similar gases, and policymakers believe it offers the best avenue for immediately handling HFCs.

Earlier this month in Bonn, Todd Stern, the United States' chief climate negotiator, described the Montreal Protocol as "the most successful environmental treaty that we have," and he listed it first among five building blocks for a successful international climate treaty to be negotiated in Copenhagen at the end of this year.

The State Department, EPA, the White House Council on Environmental Quality and the Pentagon are among the agencies behind the plan to amend the Montreal Protocol so it can regulate HFCs, and expectations for success were high going in to an interagency meeting at the White House yesterday.

But the plan hit stiff resistance from a White House economist who attended the meeting, three sources closely involved in the process tell SolveClimate.

The economist argued that HFCs were needed within a CO2 cap-and-trade system and should not be shifted to the Montreal Protocol.

Maintaining their inclusion within the Kyoto basket of gases would help keep the price of carbon credits down, the economist argued, and would allow for greater economic efficiency by permitting the trading of one gas against another. 

In other words, a utility company or cement manufacturer on the hook to reduce CO2 emissions under a federal climate law could opt to find sources of HFCs and have them destroyed instead. Since HFCs are as much as 11,990 times more potent than CO2, small amounts could substitute for large amounts of CO2 emissions and offer a cheaper alternative to emissions reductions, lubricating the economy to a more gradual embrace of a price on carbon. It also means CO2 emissions would ratchet down more slowly.

The difference of opinion within the administration on one of its signature issues was an unexpected development.

It reflects the surfacing of tensions within two camps on preferred approaches to climate change. On one side is the cautious approach favored by the president's economic team, headed by Larry Summers, who since the 1990s has been wary of imposing emissions controls. On the other is a much more diverse group of agencies acting rapidly in a politically opportune moment.

Reaction to the sudden White House hold up was greeted with dismay among many stakeholders, including industry.

"We do not agree that HFCs should remain in the Kyoto basket and be subject to a full carbon price," Mack McFarland, chief atmospheric scientist of Dupont, one of the leading manufacturers of HFCs, told SolveClimate today. "We believe that HFCs should be treated separately from other gases."

McFarland explained that the gases in the Kyoto basket, most notably CO2, are waste gases, but HFCs are intentionally produced for societal needs, so they need separate handling. Because they can be found in cars, refrigerators and air-conditioners, they cannot be controlled at the point of emissions when they eventually escape into the atmosphere from hundreds of millions of pieces of discarded equipment.

McFarland is also concerned that subjecting HFCs to a carbon price would have a sudden and shocking impact on consumers.

For example, at a price of $25 a ton for CO2, the HFC commonly used in air-conditioners known as R410a would have a value of $50,000 a ton – or $50 a kilogram – because its global warming potential is more than 2,000 times greater than CO2.

That would mean that the three kilograms of refrigerant in a typical air conditioner would suddenly add $150 in additional carbon charges alone, which by the time it worked its way up the value chain could add hundreds of dollars to the price charged to consumers.

That reality is what would spur industry to develop substitute gases in a hurry, but there is concern it could create a perverse incentive among polluters. Polluters would want to encourage HFCs in the marketplace in the knowledge that they could be worth $50,000 a ton – in the case of R410a – as a CO2 substitute. This kind of market manipulation has already been documented. Systematic abuses uncovered in the EU trading system sent billions of dollars of profits to China.

"To hold up HFCs as an ace up America's sleeve is disingenuous," said S.F. Labudde of the international NGO Environmental Investigation Agency. "It means you won't have to do anything on CO2."

Durwood Zaelke, the founder and president of the Institute for Governance and Sustainable Development who directs the organization's fast-action climate mitigation strategies, was similarly perplexed by the development.

"The Montreal Treaty has never failed, and not using it would be planetary malpractice," he said. "The administration could be heroes of the entire world by grasping this."

The international attention on this pending decision has high stakes attached. Today, the Federated States of Micronesia and Mauritius, two island nations threatened by warming-induced sea-level rise, formally introduced an HFC amendment to the Montreal Protocol. They see action on HFCs as critical for their survival.

“Continuing to emit these super greenhouse gases is irresponsible when we have climate and ozone-friendly alternatives available,” said Ambassador Masao Nakayama, Permanent Representative of FSM to the United Nations. “Strengthening the Montreal Protocol can help save island countries like ours from extinction.”

On the world stage, it would be embarrassing for the United States not to join these nations in leading on the issue. Failure to move a U.S. amendment would also draw attention to the economic strategy designed to mitigate carbon costs for U.S. polluters, and it would undermine the credibility of U.S. promises of leadership.

"The United States is fully engaged and ready to lead and determined to make up for lost time, both at home and abroad," Secretary of State Hillary Clinton declared earlier this week before a meeting of the major polluting economies of the world.

"The president and his entire administration are committed to addressing this issue [climate change], and we will act."

While support for moving a U.S. amendment is strong – and at odds with the position of the White House economist – opinion nevertheless is divided over whether the Montreal Protocol should be allowed to do the job on HFCs alone.

McFarland, speaking for Dupont, said his company supports a separate agreement on HFCs "patterned after the Montreal Protocol" which has the knowledge base and support structures in place to handle the gases. He called it a "perfect fit."

Kert Davies at Greenpeace, who has worked on HFCs and the Montreal Protocol for decades, has some concerns. Industry has powerful influence within the Montreal mechanism, and he fears industry could shoot low on what's technically feasible. Still, he's in favor of the amendment process because it will provoke a dialogue and force the Kyoto convention to react in kind. 

Observers are closely watching this internal Obama team battle, and whether the latest letter of support from Kerry, chairman of the Foreign Relations Committee, and Boxer, chairwoman of the Environment and Public Works Committee, will tip the scales.

The U.S. amendment to the Montreal Protocol must be filed by Monday to meet the deadline. Calls to the White House National Economic Council for comment were not returned.

"It's a political gimmie," Zaelke said. "You can solve one-third of the climate problem with industry bought in using a treaty that's never failed. It's an open field, 99-yard return."

 

See also:

State Department Plans to Tap Montreal Protocol for Urgent Climate Duty

Class of 'Super GHGs' Becoming Focus of Heightened Concern

After 15 Year Delay, Green Refrigerator To Arrive in U.S. -- Sort of

 

Official White House Photos by Pete Souza

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