Funding disputes delaying ozone protection

Parties to the 1987 Montreal Protocol failed this November to reach an agreement on how to fund the destruction of stockpiles of ozone-depleting substances (ODS), a step necessary for ensuring that the substances do not leak into the atmosphere. Financing is needed for the recovery of the substances from ODS ‘banks’ (chemical stockpiles and discarded products and equipment) and their subsequent destruction. But negotiators at the annual meeting of parties to the protocol—held in Bangkok, from 8 to 12 November—were unable to agree on sources for funding these activities.

The Montreal Protocol mandates the gradual phase-out of the production and consumption of a number of ODSs. Shortly after the treaty came into force, parties established a ‘Multilateral Fund’ (MLF) to assist developing countries with implementing the control measures specified by the treaty. Replenished every three years through developed countries’ contributions, the fund remains the key financial mechanism of the protocol.

But, countries disagree over whether the MLF should be the sole source of funding for ODS destruction or, indeed, whether it is appropriate to use this mechanism at all for this purpose. Disagreements also persist over types of alternative financing arrangements. Until this issue is resolved, ODS destruction activities might not go ahead in states that do not have the financial means to dispose of the banks themselves.

The absence of clear funding sources is largely due to the fact that ODS disposal is not mandated by the treaty, with attention having been primarily focused on consumption and production activities. Consequently, when some states in Bangkok argued that funding should come from the MLF, opponents maintained that ODS destruction ‘is not a compliance requirement under the Protocol’ and cannot, therefore, be covered by the MLF.

States opposed to drawing money from the MLF instead argued for using external funding sources, such as the Global Environment Facility (GEF), a financial organization that provides environmental grants to developing countries. Many developed states pushed for GEF funding, underlining ‘the opportunities for partnership and co-financing that the GEF presents.’ But there was concern among developing countries that GEF could prioritize other multilateral environmental agreements over the ozone treaty. They also pointed out that the GEF had not provided adequate funds for ODS destruction in the past.

Another option proposed at the meeting was the use of voluntary carbon markets, which would allow countries to earn carbon credits through the destruction of ozone-depleting substances.

Despite not being included in the treaty’s provisions, bank destruction is an important activity because these holdings can release ODSs into the atmosphere, damaging both the ozone layer and the climate. According to reports from the Intergovernmental Panel on Climate Change (IPCC) and UNEP’s Technical and Economic Assessment Panel (TEAP), 20 per cent of ODSs (measured in carbon-dioxide equivalent) have leaked from ODS banks since 2002.

The TEAP has also pointed out that, if unmanaged, those banks which are relatively easy and cheap to destroy will have released most of their stored gases by 2020.

Despite the impasse over funding, the parties did make some progress on ODS destruction mechanisms. They agreed to request the TEAP to review the list of destruction technologies adopted by parties at a previous meeting and to ‘develop criteria that should be used to verify the destruction of ODS in facilities that use appropriate ODS destruction technologies.’ But as long as the funding issue is not resolved, the overall rate of ODS bank disposal will be restricted and opportunities to prevent emissions from easily destroyable banks could be missed.

Agata Slota, London