The argument for using a cap-and-trade system, or a carbon tax for that matter, to control greenhouse gases comes down to marshaling the troops. Everybody needs to play this game, and the surest way to make everybody play is to make winning profitable – and conversely to make losing costly. In other words, make the market work for you instead of against you. It’s a noble and likely necessary goal, but it’s not necessarily fast, nor perfect.
This served as a starting point for discussions I had with a number of folks at the UN climate meeting in Poland last month who are pushing the idea of using the Montreal Protocol to control hydrochlorofluorocarbons. HFCs are a class of chemicals developed as industry looked for ways to reduce ozone-depleting substances in refrigerants and other applications. They don’t eat ozone but, they are potent greenhouse gases. And funny things happen when you plug them into a carbon market; direct regulation might be the way to go.
In this week’s Nature, we took a deeper look at that question and whether the Montreal model could be expanded more broadly to deal with the climate problem. The argument is based on precedent: Montreal has effectively done its job by phasing out some 97 percent of ozone eating substances, while simultaneously outperforming the Kyoto Protocol on climate. And according to one scenario analyzed by Dupont’s Mack McFarland, phasing down HFCs across the globe could cut emissions by the equivalent of 12.9 billion tonnes of carbon dioxide annually by 2050 (compared to roughly 2 billion tonnes by 2012 under Kyoto).
The same thing could be done under Kyoto, to be sure. The question is how fast and at what cost. Montreal has done all of its work through top-down phase-outs, with industrialized nations helping developing countries pay for the costs. It’s an interesting supplement to the market-driven model everybody is focusing on at present.