The Montreal Protocol the first decade of the first global environmental agreement
Ashok Khosla

The tenth anniversary of the Montreal Protocol provides an excellent opportunity to take stock not only of the response of the international community to a particular planetary threat – depletion of the stratospheric ozone shield — but also of the lessons we have learnt in establishing a global regime to deal with it.  No doubt there will be many more such threats in the future, climate change and biodiversity loss having already made their appearance on the environmental radar screen, and it would be good for us to develop a better understanding of how to evolve effective mechanisms to deal with them. Looking back on these 10 years, we can feel some degree of satisfaction that here, in the Montreal Protocol, is one example of international cooperation whose outcome is likely to be net positive for most of the countries involved.

Adoption of the Montreal Protocol was a great achievement, overcoming considerable political obstacles. It is a tribute to the leadership provided by UNEP, many delegates and far sighted scientists that such a profound commitment was extracted from governments, in some cases even at the expense of national sovereignty.

Although actual impacts on the ozone layer will only show up after some time,  implementation of the treaty is largely on track.  The 160 country signatures on the treaty, testify to a near-universal desire for active cooperation to solve a global threat.  Almost all developed countries have already phased out Ozone Depleting Substances (ODS) production and use, having quickly developed and commercialised viable substitutes.  Most Article 5 (protocol jargon for “developing”) countries are making serious efforts to fulfil their obligations within the agreed timeframe. Considerable technical innovation has taken place, particularly through private sector R&D, directly as a result of the Montreal Protocol.  In the public sector, we have seen valuable initiatives to bring together scientists and policy makers in an effort to deal with the growing complexity of issues that are now arising, with increasing frequency, from run-away technological progress. 

The Ozone Secretariat appears to be one of the more successful administrative mechanisms within UN system, at least within the narrow mandate of monitoring and clearinghouse functions given to it.  Even so, this Secretariat could take a far more pro-active role in terms of nurturing scientific research, policy alternatives and institutional design aimed at quickly stabilising stratospheric ozone concentrations. 

But there are more fundamental reasons for being disappointed with the way the Montreal Protocol is working out.  In its implementation, some of the bargains we made, explicitly or implicitly, at Montreal and London have quietly slipped out of sight.  Partly by donor intention and partly because of cumbersome, centralised bureaucratic procedures – could these be two sides of the same coin? – the Multi-lateral Fund (MLF) has not been able to underwrite the implementation process as well as we had expected it to. 

First, we should recognise that the MLF was a pioneering, indeed breakthrough mechanism established to minimize the disruption of vulnerable economies resulting from the withdrawal of CFCs.  Nevertheless, it was our understanding that the cost burdens on developing countries would be equitably shared by the international community.  This has not happened, and unless we change our approach, it probably never will.  As everyone knows the process by which the MLF provides funds under the terms of the protocol restricts reimbursements to the incremental cost associated with a particular project.  Project formulation is an iterative procedure involving much back and forth between project proponent, respective government, UN implementing agency and the MLF.  Decisions, even relatively minor ones, have to be made centrally.  This makes for long time delays and financial losses to the recipients.

The definition of incremental cost is highly simplistic and keeps changing, largely towards further simplification.  It never covers many of the costs associated with mandatory phasing out of an old technology and introduction of a new one.  Such a transition requires premature closing of businesses, skill building, setting up of new ancillary industries, second-order impacts on upstream and downstream industries and other (often huge) financial effects that ripple through the whole economy.  In fact, such costs added together are often an order of magnitude higher than the direct cost, which unfortunately are the only ones eligible for incremental cost calculations. 

Furthermore, like any other bureaucratic mechanism, the design of the funding mechanism may well be quite elegant and coherent in principle, but in practice entirely ignores many realities of the marketplace.  The project appraisal process simply cannot deal with the extra costs involved in purchasing technologies from private sector entrepreneurs overseas who have no desire to lose their monopolies or their trade secrets. 

There are also other nuances relating to such criteria as cost effectiveness and incremental savings which have made them so esoteric and intractable as to eliminate entirely the possibility of obtaining MLF support for whole ranges of otherwise deserving industries.  One example is the small aerosol filler business in India wishing to switch to hydrocarbons but unable to pay for meeting safety standards and environmental laws. 

Technology transfer, the other major component of the Montreal bargain also appears largely to be a non-starter.  Article 5 countries, left to the mercies of the marketplace continue to find it difficult to access the technologies they need since these are mainly available from private sector corporations.  If occasionally they are available, they are outdated and inefficient, come at an exhorbitant price, and are not coverable within the standard definition of incremental cost.  Of course, not all technologies are universally applicable and considerable technical skill is needed to determine which ones will work.  If such skill is not accessible, great loss can occur. 

Before Montreal, developing countries like India were self-sufficient in CFC production.  Now they have to phase out CFCs but cannot get a technology licence for production of ODS substitutes like HFC134a.  Without technology agreements, Indian producers cannot even submit their proposal for the conversion.  A typical catch-22 situation.  Worse, the Ozone Operations Research Group, which met recently at the World Bank suggests that there is no economic case for new plants to manufacture HFC134a, particularly in developing countries with consumption of less than 15,000 tons/year.  So I suppose the only approach that India should follow is to close their plants and buy from elsewhere.  Is this the right solution?  Was it the intent of the Montreal Protocol to drive Article 5 countries back to the pre-industrial age?

I see the current direction in which implementation of the Protocol is headed has been one that will without doubt marginalise certain industries, especially in the Third World.  With the tight-purse policies of the MLF, we cannot expect even the phase-out costs to be covered fully.  Even if the industries survive to see another day, they will do so as crippled entities, unable ever again to gain real commercial viability. 

In addition to the problems I have just enumerated, there also remains considerable unfinished business in the Montreal Protocol agenda.  First, there is the whole question of interim solutions involving transition chemicals which themselves will have to be phased out in due course.  Given the fact that developing countries account for such small amounts of CFC emission, what possible sense does this make?  Every effort to implement the Montreal Protocol should be made for reasons of resource and economic efficiency, not for the competitive advantage of a few corporations or the trade balance of particular countries.  ODS substitutes in Article 5 countries must be climate friendly and a long term proposition.  If we have to wait for science and engineering to catch up, so be it.

Perhaps the most important unfinished business is the need to undertake more research, both in the basic sciences of atmospheric chemistry and social responses and in the engineering of appropriate alternatives.  Certainly, we need to know much more about the impacts of UV-B radiation on human health and agriculture, particularly in tropical areas.  We will need much deeper understanding of the health and agricultural trends in chlorine of the atmosphere as well as of the other potential threats to stratospheric ozone.

Historical Responsibilities

From a developing country point of view, the depletion of the ozone shield is an even greater threat than it is for developed countries.  Most developing countries lie in the tropics where increased ultra violet radiation can cause great damage to agriculture and  human health.  There is growing evidence that it causes certain kinds of blindness and diseases of the immune system.  Poor countries are particularly vulnerable because of lack of facilities and financial resources to deal with these problems. 

The irony lies, of course, in the fact that the threat originates largely from activities that took place elsewhere.  The developing countries use very small quantities of CFCs, and they could easily have been left to their own devices.  As I see it, the main reason that they had to be brought within the ambit of the Protocol was to prevent them from taking up the slack and supplying ODSs after the industrialised countries shut down their facilities.  Otherwise, the minuscule consumption of CFCs in Article 5 countries would hardly warrant such major international commitments.

It is difficult for us in the third world to understand why the goals keep changing so often and the target is kept moving all the time.  Of course, in part this is because the technological options are evolving rapidly — but mostly, it seems to be for commercial and other reasons.  It worries us that the industrialised countries find it so easy, when it suits them, to change the rules of the game at the international level.  Yet they are unwilling even to discuss how inappropriate some of there own basic rules are for international development, such as the sacrosanctity of the private sector and intellectual property rights. 

We see the inadequate funding available for conversion leading to loss of competitiveness for our industries, making them vulnerable to back door entry by multinationals with enough financial and technical clout to take them over.  In a global economy, with so many inter-dependencies, our political leaders feel they can’t even  opt out.

Finally, one has to be disappointed with the little respect there is in international affairs for the golden rule.  When we agreed to the London amendments, we did so on the assumption that this was a pioneering attempt to introduce to some degree of equity and reciprocity in international relations.  However, even at the most superficial level, this is not so.  While the Article 5 countries have  to report on their progress in implementing the Protocol, the industrialised countries do not appear to feel any responsibility to maintain transparency or openness at their end. 

The developing countries

The biggest casualty in this process, and indeed in all other international negotiations is the concept of capacity building.  Building capacity is a simple but widely misunderstood concept.  It merely means that each society needs to have the capability to identify its own problems, formulate strategies to solve them, choose the most appropriate one – and implement it. 

Developing countries need to build their skills in choosing, negotiating and absorbing technologies that suit their circumstances and under terms that are at least grossly unfair to them. The scientific and technological base in most Article 5 countries – with a few exceptions, like China, India, Brazil and Mexico – is too weak to give them any chance to fully understand complex global issues and make proper decisions that are truly in their national interest.  Many other factors including private interests, unfair business practices and other extraneous considerations also come in to play to further sub-optimise techno-economic decisions and thus marginalise the poor and destroy the environment. 

We now need a much stronger, proactive support from the international community to deal with such technological issues, particularly, in the small and medium enterprise sector.  Many Article 5 countries also need to strengthen their capabilities to formulate MLF projects, carry out research on scientific and social issues and to create information bases and awareness programmes.

The bigger issues

It is ironic that many of our international regimes whose purpose is to support sustainable development values are actually designed to do the opposite.  Sustainable development is, by its nature, a holistic concept which recognises the interlinkages between different human activities and natural processes.  But where are these linkages built into the Montreal Protocol or the Climate Change Convention or the Biodiversity Convention?  Or in any of our efforts to bring about international cooperation for saving life on our planet?  All these international agreements and regimes seem to have the seeds of their own failure built into them.

On the one hand, all these conventions have been negotiated with extremely narrow frames of thinking imposed upon them by those who always manage to set the agenda.   In the name of achieving results, they have been artificially squeezed and focussed onto single issue approaches, ignoring the vast set of linkages which must be addressed and without which they can only be ineffective.  The potential for contradictions between the ozone convention, the climate change convention and the biodiversity convention are well known to all of us.  Yet, we have never been able to persuade the parties driving these negotiations to try to reconcile them.

Ultimately, who is going to bell the consumption cat ?  After all, it is the dominant life styles and production systems that are causing these global problems in the first place.  Under the present rules of the game, it is quite unacceptable to question these at the international level.   Could any one have ever really assumed that we could rape and pillage the earth as we – or at least some of us – have over the past two hundred years, and smear her with all our wastes and garbage, without any possible damage to her productivity and health?

No, we need a more systemic treatment to cure the ills our environment is suffering.  This will mean that we will have to transcend the narrow self-interest that has guided us in these early years of environmental action and shed the hypocrisy that has underlain the discussions.  Certainly, if the environment continues to act as no more than a front or a Trojan horse for the powerful to push their economic and political agendas, we cannot maintain hope much longer.    q
 

This article is based on speeches made
in Montreal on the tenth anniversary of the Protocol. 

    Back to Contents