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The 27th Meeting of the Parties to the Montreal Protocol, held last week in Dubai, United Arab Emirates, initiated and agreed to continue to negotiate the terms for an amendment to the Protocol in 2016 to address the management of hydrofluorocarbons (HFCs). This marks a positive step forward that, significantly, recognizes differences in opinions on the very practical issues of ‘how’ and the ‘right timing’.


Adopted in 1987, the Protocol is recognized for its successful collective environmental action. To date, its implementation has resulted in a significant drop in total global production and consumption of ozone-depleting substances (ODS), man-made chemicals used in consumer and industrial sectors around the world. Currently, its agenda focuses on the phase-out of chemicals known to damage the ozone layer, especially used in cooling and refrigeration applications, and in the manufacture of foam products.


“The Protocol’s agenda is unique in that it has for a long time shown real co-benefits, delivering both  ozone and climate mitigation impacts, in tandem since many of the chemicals it addresses are both ozone depleters and greenhouse gases,” said James Close, Director, Climate Change Cross-cutting Solutions Area. A further plus is that significant energy efficiency gains are possible in certain applications through transition to other substances and technology upgrades.


On the flip side, an unintended consequence of the Protocol’s work to eliminate global reliance on ODS has been an increase in the use of HFCs as a replacement for ODS phased out. HFCs don’t harm the ozone layer; they are however, powerful atmospheric heat-trapping gases. Overall, HFC emissions are growing at a rate of eight percent a year, and without any change from current patterns, annual HFC emissions are projected to rise to 20 percent of global CO2 emissions by 2050. A major use of HFCs is in refrigeration and air-conditioning (RAC), which have increasingly become an important source of demand for electricity, accounting for about 16 percent of the global electricity consumption (Green Cooling Initiative, 2014).


The Bank’s new report, Shock Waves: Managing the Impacts of Climate Change, highlights the critical role of cooling for economic growth and labor productivity, and also the growing share of cooling as a driver in the global demand for energy. A more than 200 percent rise is projected in the market volume of RAC appliances by 2030, which will place an important drain on energy supply (IEA: Key World Energy Statistics 2014). Many developing countries are already feeling the burden, resulting in the need to manage the sector’s disproportionate impact on electricity peak load and implications for its construction of new power plants.


The World Bank’s Montreal Protocol Program works to maximize environmental co-benefits by capturing the convergence of the ozone and climate agendas in project activities. Working with manufacturers and end users, the Program also supports the deployment of technology that helps improve performance, lowers energy consumption and enhances climate benefits. Commercial availability and costs of alternative solutions necessarily play a critical role in this context, especially in developing country markets, as does emphasis on projects designed to avoid, where technically and economically feasible, the introduction of substances with high GWP, namely HFCs.


Since 1991, projects implemented across all the World Bank’s regions have made important contributions to the Protocol’s achievements. With over US$1 billion in grants, the Bank has supported the implementation of more than 700 investment and technical assistance phase-out activities across client countries. The Bank’s current Montreal Protocol portfolio promotes non-HFC technologies to the extent possible, but this engagement is influenced by market and trade issues, and availability of technology for specific applications. In foam manufacturing for example, hydrocarbon technologies, which do not contribute to global warming, can be safely and cost-effectively adopted. However, for some applications, such as air-conditioning, where low-GWP alternatives to HFCs are not yet considered technologically mature and commercially competitive, the Bank works with country partners and industry to support medium- term transitions to systems using ‘lower’-GWP HFCs with a higher energy efficiency, so that a net positive climate benefit is achieved.


There are signs of global progress. In the order of 30 percent of national plans submitted by countries, the Intended Nationally Determined Contributions (INDCs) to the United Nations ahead of Paris incorporate HFC emission reductions among the potential climate change actions they cite. Practically-speaking, the Bank’s work with China on their HCFC production closure effort has already yielded important climate co-benefits from avoided CO2 emissions through cessation of production of high-GWP chemicals, as well as from related by-products (HFC-23). This first stage of support already equates to taking approximately 19.5 million cars off the roads per year.


“The signal out of Dubai last week is clear in its recognition of the need for shared responsibility between the Montreal Protocol and the UNFCCC on HFCs”says Karin Shepardson, Program Manager of the Bank’s Montreal Protocol Team. “The inability to arrive at an amendment at this juncture, prior to the  Paris talks underscores the interlinkages and ongoing concerns regarding issues of technology transfer to assist developing countries, financing, and special exemption needs. “


Increasing the access to cooling for all as a basic need highlights the need to systematically pursue climate informed development pathways. Cooling done right in the most affordable and environmentally sustainable way can contribute positively to green growth without derailing climate objectives. The effort however, is not challenge-free, with the most significant obstacles to HFC phasedown being the safety of alternatives (toxicity and flammability), economic pricing, and the speed of technology transfer.


The Bank’s ongoing ODS phaseout work program already addresses many of these challenges. HFC reductions are mainstreamed throughout operations with a focus on identification of the safest and technically most feasible climate-friendly alternatives. The Bank is working with developing countries and industry in the areas of technology transfer and intellectual property rights to help foster knowledge exchange and capacity to devise solutions to the challenges. This work recognizes the need for longer term and more out of the box thinking on new technology sharing approaches.


Funding, of course, is key to moving this agenda forward. “We need to target more climate finance directly at the most transformative points to maximize benefits, for example, by improving energy efficiency at the appliance manufacturing nexus where the Montreal Protocol has decades of proven expertise”, says Mary-Ellen Foley, Senior Environmental Specialist with the Bank’s Montreal Protocol Team.


Given the breadth of the HFC issue, there is a need to move beyond the mainstreaming efforts inherent within the Bank’s Montreal Protocol work program and build HFC reductions into the wider set of Bank lending support. Targeted support from the Government of Canada is helping do just this: generate early success stories and develop tools that can help Bank teams forge opportunities to mainstream HFC reductions. A better understanding of how HFCs and their alternatives fit within the Bank’s environment, energy, agriculture, transport and health investments moving forward will increase awareness and enable more hands on deck.