Foreign Relations of the United States, 1981–1988, Volume XLI, Global Issues II

368. Memorandum From the Energy, Natural Resources, and Environment Working Group to the Domestic Policy Council¹

Washington, June 10, 1987

SUBJECT

• Stratospheric Ozone

On May 20, 1987, the Council met to discuss the international protocol negotiations currently underway to limit emissions of ozone depleting chemicals. Several questions were raised and the Working Group was asked to provide answers. The questions were:

• What are the legislative and legal impacts of an international ozone protocol?

• What are the most up-to-date scientific data on climatic and health effects of ozone depletion?

• What is the cost/benefit effect of an international protocol restricting ozone depleting chemicals?

The following has been summarized by the Working Group after discussion of detailed presentations by experts in each area.

Climatic and Atmospheric

• Since 1960 the natural variability of the total global column of ozone has been about 3%.

• Observations have shown (1) a decrease in ozone of about 7% during the last decade in the upper part of the stratosphere; and (2) a 40% decrease in total column ozone over Antarctica in the spring season since the mid-1970’s. Whether the recent changes in column and upper stratospheric ozone are due to natural phenomena or in part to CFCs remains an open question.

• Continued growth of CFC and Halon emissions at 3% per year is predicted to yield a globally averaged ozone depletion of 6% by the year 2040, and more thereafter, which would be greater than natural variability. In contrast, a true global freeze on emissions of CFCs and Halons (i.e. full international participation, full chemical coverage, and full compliance) is predicted to yield a maximum global average column ozone depletion of less than 1%. Ozone depletions at high latitudes are predicted to be 2–3 times larger than the global average.

• A true global freeze would limit column ozone depletion to less than the natural variability. A protocol freeze would fall short of a true global freeze as it would have less than full compliance among developed countries and would most likely allow for limited growth in CFC usage in developing countries.

• Ozone depletion in the upper part of the stratosphere greater than 25% is predicted to occur even in the case of a true global freeze. This would lead to a local cooling greater than natural variability. The consequences of this cooling for the earth’s climate cannot be predicted at this time.

• There is an uncertainty factor of two to three in the predictive abilities of the theoretical models used to simulate the present atmosphere.

• If there is environmental damage due to CFCs and Halons, their long atmospheric lifetimes would mean that recovery would take many decades even after complete cessation of emissions.

Health and Ecological Effects

• Projected ozone depletion will increase health effects of ultraviolet radiation (UVB)

—Without ozone depletion, projections show UVB is a serious problem, and will cause:

—2,977,000 skin cancer deaths of Americans born before 2075,

—165 million skin cancer cases,

—426,516,000 cataracts.

—If the predicted 25% depletion of ozone in the upper stratosphere occurs by 2075, UVB related health effects would increase by:

—2 million additional skin cancer deaths,

—98 million additional skin cancer cases,

—43 million additional cataracts.

—If upper stratospheric depletion of 7.7% occurs instead (as predicted to result from a protocol freeze with less than full compliance and limited emissions growth in developing countries),

—1.6 million additional American deaths would be averted,

—79 million additional skin cancer cases would be averted,

—32 million additional cataracts would be averted.

—If upper stratospheric depletion of 6.1% occurs (as predicted to result from a 20% emissions reduction protocol with less than full compliance and limited emissions growth in developing countries) incrementally,

—80,000 additional American deaths would be averted,

—4 million additional skin cancer cases would be averted,

—2 million additional cataracts would be averted.

—If upper stratospheric depletion of 3.2% occurs (as predicted to result from a 50% emissions reduction protocol with less than full compliance and limited emissions growth in developing countries) incrementally,

—130 thousand additional American deaths would be averted,

—7 million additional skin cancer cases would be averted,

—7 million additional cataracts would be averted.

—Uncertainties include future ozone depletion, the action spectra and estimates of dose-response coefficients.

—The analysis assumes no behavioral changes.

—Considering quantifiable uncertainties, there is a 50% chance that the actual damages will be between 50% and 125% of the above estimates.

—There is a 90% chance that the actual damages will be between 20% and 260% of the above estimates.

—Laboratory studies link UVB with suppression of the immune system.

—Evidence suggests a relationship to infectious disease.

—A relationship has been demonstrated in herpes simplex and the tropical disease, leishmanias.

• Evidence supports the conclusion that ozone depletion would exacerbate existing environmental problems.

—Photochemical air pollution in places like Los Angeles would probably worsen.

—The lifetime of outdoor plastics and latex paints would be shortened.

• Evidence supports the conclusion that ozone depletion could seriously influence crops and aquatics.

—Knowledge is limited, but experimental data indicate crop production may be reduced and ecosystems disturbed.

—Field experiments have not been done, but laboratory data indicate aquatic organisms are sensitive to higher UVB, especially during critical breeding seasons.

• Higher emissions of CFCs and its indirect effects of vertical ozone re-distribution will raise global temperatures and change climate.

Cost/Benefit

• Cost/benefit analysis has been carried out for known health effects (skin cancer deaths, non-fatal skin cancers, cataracts) based on EPA’s Risk Assessment.

• Potential effects of ozone depletion on plants, aquatic life, the human immune system, ground-level ozone concentrations, polymer degradation, and sea level rise were not quantified.

• A range of assumptions were used in the analysis to reflect economic uncertainties and lack of inter-agency consensus on the values of key parameters.

• The analysis is based on EPA models which attempt to project health impacts through year 2165 and assume no changes in technology, medicine or human behavior.

• Conclusions:

—The economic benefits from a protocol freeze (at 1986 levels with less than full international participation) of CFC emissions are substantially greater than the costs over all plausible assumptions and ranges of uncertainty.

—The economic benefits of a protocol freeze plus a 20% reduction in CFC emissions are also in almost all cases substantially in excess of the costs.

—The incremental benefits of the additional 20% reduction beyond the freeze are in most cases in excess of the incremental costs of the cut.

—The benefits of an additional 30% reduction (beyond the freeze plus 20% reduction) appear in some cases to be greater than the incremental costs, and in other cases to be less. Further scientific, technical, and economic review will be valuable in evaluating benefits and costs before implementing this step.²

ISSUES AND DISCUSSION

At the May 20 Council meeting, the status of the international ozone negotiations was provided. It included a review of the November 28, 1986 Circular 175, which was approved by Under Secretary of State Allen Wallis, and which authorized the U.S. delegation to negotiate a protocol. The approval process for the Circular 175 has been criticized by some members of the Working Group, on the basis that numerous departments and agencies had not concurred on the Circular, or that concurrence was by individuals not at policy-making levels. The Circular 175 authorized the U.S. delegation to negotiate a protocol providing for:

I. A near-term freeze on the combined emissions of the most ozone-depleting substances;

II. A long-term scheduled reduction of emissions of these chemicals down to the point of eliminating emissions from all but limited uses for which no substitutes are commercially available (such reduction could be as much as 95%), subject to III; and

III. Periodic review of the protocol provisions based upon regular assessment of the science. The review could remove or add chemicals, or change the schedule or the emission reduction target.

The international negotiations to date have resulted in a Chairman’s Text, a proposed protocol to which negotiating countries have been asked to respond.³

The Working Group recommends that the Council support continuation of negotiations pursuant to the current Circular 175. The Working Group also recommends however, that additional guidance be given to the U.S. negotiators, based on reviews by a wider range of agencies such as those represented on the Council.

The following are issues for which the Working Group feels additional guidance to the negotiators may be appropriate.

A. PARTICIPATION AND TRADE PROVISIONS

There are many complex issues pertaining to fair trade provisions and participation of developing countries in the protocol.

1. What should be the U.S. position regarding international participation in the protocol?

The Working Group feels that the U.S. delegation should seek maximum international participation in the protocol. To many, participation is the key issue, because growth of emissions from non-participating countries would offset the emissions reductions of those who are parties to the protocol, thereby hindering overall attainment of protocol objectives.

Developing countries are an important part of the participation issue. While the 48 countries participating in the protocol negotiations account for over 90% of the current production, substantial growth of production and consumption is anticipated in developing countries. The U.S. and the United Nations Environment Program (UNEP) have expended considerable effort to encourage broad participation by developing countries. However, only relatively few have shown the interest or the expertise to participate. Parties to the protocol would not be able to prevent non-joining countries from producing CFCs for their internal market or from exporting to other non-parties, but, if the protocol provides for trade sanctions, parties could prevent non-parties from profiting through international trade with protocol parties.

A strong protocol, including the major producing and consuming countries, should lead to earlier development of substitute products, and might discourage non-joiners from investing heavily in CFC technology that would not generate trade with parties to the protocol. Further, some believe that the very existence of a protocol, as an expression of concern by the international community, increases the pressure on non-member countries to join; in essence, if they continue to produce CFCs, they are exposed as behaving irresponsibly on a matter of global import.

The following options are proposed for the Council’s consideration:

a. Give the U.S. delegation discretion for seeking maximum participation.

b. Develop criteria for acceptable levels of participation, e.g. minimum participation of countries producing a specified percentage of the total global CFC/Halon production; or a formula requiring minimum participation of countries accounting for a specified portion of the world population.

c. Wait to reassess the U.S. position after we know the extent of participation by other countries.

To encourage the participation of developing countries, some parties favor granting developing countries a limited grace period from compliance with protocol provisions. Such a grace period would be allowed in recognition of the importance of having global participation in the 21st century, and in recognition of the fact that developing countries have not received the benefits of CFC and Halon use. The length of the grace period and the levels of production/consumption that would be permitted are questions that would need to be resolved.

2. Voting among parties to the protocol.

Also at issue is the voting process for making future decisions under the protocol. This could include decisions on future reductions. The Working Group recommends that the U.S. delegation negotiate for a system of voting which would give due weight to the major producing and consuming countries.

3. The control formula and trade provisions.

The Working Group recommends that the Council direct the U.S. delegation to continue to seek to include in the protocol an effective formula to control emissions with accountability, the fewest possible restrictions on the flow of trade and capital among parties, the most favorable formula for U.S. industry, stimulation of substitutes and innovative emission controls, and with no greater restriction on trade involving the U.S. than will be adopted and enforced by other nations.

Trade: The U.S. has pushed for a strong protocol article on trade sanctions to be imposed on parties which have not signed the protocol. This would limit imports not only of the controlled chemicals but also of products containing these chemicals (e.g., air conditioners or foam insulation). The U.S. has pushed for a study of the feasibility of limiting imports of products manufactured using the controlled chemicals (e.g., electronic equipment). The intent of the trade article would be to provide a “stick” for encouraging others to join and to limit the impact on ozone depletion and the transfer of commercial benefits from parties to the protocol to countries which have not joined.

This would represent a major policy decision, as it could be an important precedent for using trade sanctions to enforce environmental regulations. Also to be decided is whether trade sanctions should be applicable to parties who materially violate their protocol obligations.

Control Formula: Since it is not possible to measure emissions directly, the negotiators have explored alternative formulas to control emissions which consider production, consumption, imports and destruction.

4. Should the U.S. seek protocol provisions for reporting, monitoring, verification and enforcement provisions?

There are many complex issues relating to enforcement of a protocol. Because of the enforcement roles of EPA and U.S. environmental groups, our compliance with the protocol is apt to be substantial. Most other nations do not have such enforcement mechanisms. No monitoring or verification system has been identified to date. A system of on-site inspections for the presence of new or expanded CFC-producing facilities would be expensive and probably ineffective because of the large land areas involved.

Some Working Group members believe the U.S. should insist upon strong monitoring and reporting provisions in a protocol. Some favor the U.S. negotiating for strong provisions, and exploring the feasibility and cost effectiveness of establishing ad hoc inspection teams to investigate any alleged violations of protocol requirements. Trade provisions could at least prevent entry of such production into international trade with parties to the protocol.

The following options are presented for the Council’s consideration:

a. Give the U.S. delegation discretion for seeking such provisions.

b. Insist that the protocol include such provisions.

5. Should the U.S. attempt to receive “credit” for its 1978 unilateral voluntary ban on CFC-producing non-essential aerosols?

Some believe that in addition to a freeze, other nations should ban non-essential aerosols as the U.S. did in 1978. Otherwise, many nations might be able to meet their obligation to reduce CFC emissions through the simple expedient of banning such aerosols, while the U.S. is required to cut back on other products using CFCs. One form of recognition may be to require other countries to ban non-essential aerosols in addition to meeting other protocol requirements.

The U.S. attempted unsuccessfully to get such credit two years ago during the negotiation of the Vienna Convention on the ozone layer,⁴ and some believe that if the U.S. were to insist upon such credit as a condition of a protocol, the negotiations would come to a standstill as in 1985. Some argue that even with the aerosol ban, the U.S. remains responsible for most of the long-lived CFCs in the stratosphere, and the U.S. per capita CFC consumption is still the world’s highest.

The Working Group recommends that the Council consider and provide guidance for the U.S. delegation as to whether or not we should attempt to gain credit for our previous actions.

B. AN EMISSIONS CONTROL PROTOCOL

The aforementioned Chairman’s Text contains proposals related to (1) a freeze on emissions, and (2) emissions reductions beyond a freeze. The Working Group discussed these at length.

1. A Freeze on Emissions. The following are major questions:

a. What chemicals should the freeze cover?

The Chairman’s Text provides for a freeze on emissions at 1986 levels which would cover CFCs 11, 12, 113, 114, and 115. Due to a technicality, Halons are not now included.⁵

The Working Group consensus is that the freeze should include all of these CFCs as well as Halons 1201 and 1311. The U.S. delegation will be seeking to expand the protocol to include the Halons.

From a purely scientific perspective all chemicals containing chlorine and bromine, weighted by the ozone depleting potential, should be considered for the protocol, both for the freeze and for potential future reductions. The Chairman’s Text is somewhat less than a purely scientific perspective because only the fully halogenated chemicals (CFCs 11, 12, 113, 114 and 115, and Halons 1201 and 1311) are being considered for inclusion. Chemicals such as CFC 22 and methyl chloroform which are only partially halogenated are not being considered as they are believed to be part of the solution and have relatively low ozone depleting potential.

Concern has been raised with regards to reductions in Halons 1201 and 1311 and CFC 113 because of their strategic value to the U.S., and the apparent lack of suitable substitutes. This is a legitimate concern but one that can be handled if controls are on the sum of the ozone depleting potential of all chemicals, rather than on individual substances. This will allow each individual country the flexibility to live within the internationally agreed protocol with the least interference on how a country wants to implement the protocol.

b. When should a freeze on emissions occur?

The Chairman’s Text proposes that the freeze take effect within two years of entry into force. There is uncertainty as to when entry into force will occur, but the best estimate is that it will be in the 1988–90 time period. The Working Group consensus is that a freeze on emissions should go into effect within one to two years after entry into force of the protocol.

2. Reductions Beyond a Freeze

a. What chemicals should the reductions cover?

The Chairman’s Text proposes that the additional reductions beyond a freeze include CFCs 11, 12, 113, 114 and 115. The Working Group consensus is that any additional reductions should cover CFCs 11 and 12; however, there are questions about the coverage of CFCs 113, 114, 115, and Halons 1201 and 1311. National security concerns argue against including the Halons in any reductions. There is also a national defense and security concern with including CFC 113 in any reductions beyond a freeze, especially given 113’s importance for certain high-technology electrical applications. The questions regarding coverage of CFCs 114 and 115 concern their potential use as substitutes for controlled chemicals and their present low usage.

b. How much and when?

The Chairman’s Text provides for a 20% reduction to take effect 4 years after entry into force (1992–94) and an additional 30% reduction to take effect either 6 years (1994–96) or 8 years (1996–98) after entry into force.

With respect to any future reductions, the Working Group recognizes the importance of the future assessments of science, technology, economics and environment.

The Working Group identified distinct issues surrounding each potential reduction. With respect to the 20% reduction, some favor it because it can be accomplished with existing industrial processes and because reductions beyond a freeze may be needed to counterbalance less than full participation in a freeze. Yet others note there are uncertainties as to the need for any additional reductions.

Regarding the additional 30% reduction, some favor its inclusion on the basis of judgments about the science and potential adverse health effects. Others emphasize, however, the uncertainties about the need to commit at this time to this additional measure. One or more scientific reviews would be available prior to this reduction going into effect.

The Working Group recommends that the Council discuss and provide guidance on whether the U.S. position is to support:

1. A 20% reduction beyond a freeze.

2. An additional 30% reduction.

3. Additional reductions beyond 50%.

c. Should the reductions be automatic (subject to reversal by a 2/3 vote) or contingent upon a positive vote of a majority of the parties?

The Chairman’s Text proposes an initial 20% reduction to take effect automatically (implicitly reversible by a 2/3 vote).

The Text provides two alternative implementing mechanisms for the next 30% reduction—6 years after entry into force if the majority of the parties so decide, or 8 years after entry into force unless reversed by a two-third majority of the parties.

There are strong views in the Working Group on the implementing mechanism for the additional 30% percent reduction. Many do not wish to commit to the reduction at this time unless it is contingent upon a positive vote of a majority of the parties. Others, however, believe the evidence warrants committing to this reduction at this time.

Most believe the future assessments of the science, technology, economics and environment are important to these reduction decisions. There are differing views, however, on how such future assessments ought to factor into reduction decisions. Some believe final reduction decisions ought to follow future assessments, whereas others believe reductions should be scheduled now with an opportunity for reversal based upon future assessments.

The Working Group recommends that the Council provide guidance on whether the U.S. should support automatic reductions of:

a. 20% beyond the freeze.

b. an additional 30%.

C. ISSUES FOR LATER CONSIDERATION

The Working Group identified several related issues that will require further consideration. They include:

1. The relationship between international protocol and domestic regulations. Since the overall objective of the protocol is to avoid or reduce health and environmental risks, compliance with the international protocol will necessarily result in domestic regulation. There is legal precedent for such a linkage between international agreements and subsequent domestic regulations.

2. Non-Regulatory Approaches. There is no reason why the Nation’s efforts to achieve the objectives sought in the protocol should be limited to a regulatory approach. The suggestion has been made that if the government imposes such regulatory burdens upon the people and the economy of the U.S., consideration should also be given to policies which may ease the regulatory burdens, including, but not limited to, possibly rendering unnecessary imposition of regulations beyond those necessary to assure U.S. compliance with the international protocol.

Such a domestic, non-regulatory supplement to the international protocol might, for example, contain elements intended to eliminate government barriers to, or facilitate, the development of: substitutes for covered chemicals, technology to mitigate or eliminate the adverse effects of chemical emissions upon stratospheric ozone, or medical advancements in the understanding and treatment of the problems caused by ozone depletion.

[NOTE: This paper attempts to portray the general flavor of the Working Group discussions on this very complex issue. It was not possible to include all of the important comments contributed by representatives of the participating agencies.]⁶

1. Source: Reagan Library, Risque Files, Stratospheric Ozone (2). No classification marking. Benedick initialed for the Energy, Natural Resources, and Environment Working Group.
2. An unknown hand placed a checkmark in the left-hand margin next to this paragraph.
3. See Document 362.
4. See Document 352.
5. An unknown hand circled “113” and underlined the phrase “Halons are not now included.”
6. Brackets in the original.