The World Bank – Montreal Protocol Partnership: Promoting Ozone Smart, Climate Balanced Development THE WORLD BANK The World Bank Ozone Protection Partnership in Action ACTIVITIES, BY SECTOR, FUNDED BY THE MULTILATERAL FUND, AND THE GLOBAL ENVIRONMENT FACILITY IN CEITS HALONS REFRIGERATION AND AEROSOLS FOAM SECTOR NATIONAL PHASE-OUT PLAN SOLVENTS SECTOR (FIRE PROTECTION) AIR-CONDITIONING SECTORS AGRICULTURAL PRODUCTION SECTOR TECHNICAL ASSISTANCE ODS DESTRUCTION FUMIGATION (METHYL PROCESS AGENTS AND INSTITUTIONAL STERILANTS SECTOR PHASE-OUT BROMIDE ELIMINATION) STRENGTHENING The Making of the Montreal Protocol The World Bank — Helping to Restore the Earth’s Ozone Layer Building upon the performance-based, sector-wide implementation modality that combined Helping to Restore the Earth’s Climate Balance policy measures with financial assistance to achieve sustained phase-out reductions, as well as In the mid-1970s, scientists discovered that the use of certain man-made industrial chemicals The World Bank has played a key role as an implementing agency for the Protocol’s financial its continued advocacy for national execution, the Bank developed and submitted two national Tackling the Next Group of Ozone Depleters: Hydrochlorofluorocarbons (HCFCs) threatened to damage the protective ozone layer that shields the earth and protects human and mechanisms, the MLF and the GEF. Since 1991, projects implemented across all the World Bank’s CFC phase-out plans for Thailand and Malaysia, both of which firmly placed the countries in the The Protocol has entered a new era. In 2007, the Parties agreed to accelerate the phase-out of HCFCs, ecosystem health from the sun’s dangerous ultraviolet radiation. Ozone-depleting substances regions have contributed strongly to the Protocol’s achievements. Cumulative MLF grant driver’s seat. These national approaches to implementation gave countries the flexibility to direct substances that had replaced CFCs in many applications, given that projected trends in their (ODS), as they came to be known, were found in products as diverse as refrigerators, aerosol approvals, valued at over US $1 billion, have supported the implementation of more than 685 funding to priority areas in line with the adoption of complementary policies to meet their production and use, particularly in developing countries, were seen to pose a threat to the progress that spray cans, fire extinguishers, air-conditioners, household furniture and car interiors. Their use in investment and technical and institutional assistance phase-out activities across Bank client Protocol consumption compliance targets. Seeing the potential for cost-effective, permanent had been made to reverse ozone depletion. The indisputable link with the climate was also reinforced, industrial and agricultural processes was thinning the ozone layer and allowing increased levels of countries. This has resulted in cost-effective ODS phase-out of over 300,000 tons of ozone aggregate reductions of ODS, the Executive Committee of the MLF captured many of these as scientific research had confirmed the potential for climate co-benefits through avoided GWP in the ultraviolet (UV) radiation to reach the earth’s surface. depleting potential (ODP)1, or 67% of the total phase-out achieved in developing countries under principles in its 2001 Framework for Strategic Planning which defined new funding policies for transition to ODS with lower or no-GWP substances. It was also clear that large energy efficiency gains projects that persist today. could be achieved from technology upgrades when phasing-out ODS in certain applications. the MLF, using only 42% of the total resources disbursed. In addition, World Bank GEF-supported By the mid-1980s, the existence of a severe and annually recurrent ozone ‘hole’ over Antarctica projects, valued at UD $93 million, had, by the early 2000s, phased-out 230,000 ODP tons of The Protocol’s agenda is now largely focused on energy efficiency and climate mitigation, and with good was confirmed, compounded by a thinning of the ozone layer over northern regions. Increased UV ODS consumption and production. The Bank has also been a leader in promoting ozone-climate positive synergies, pioneering reason. Casting a gaze back over the climate impact of the MLF-funded projects implemented by radiation reaching the earth posed a danger to human health—increased risk of skin cancers, eye actions that supported both ODS elimination and climate mitigation using innovative financial the Bank between 1991 and 2010, the result is impressive: the net ODS phase-out is equivalent to cataracts and suppression of the body’s immune response—and threatened the global The Bank was the first Implementing Agency to assist client countries tackle the challenge of schemes. Initial demonstration efforts targeted the replacement of building chillers, a sector with approximately 1.22 billion tons of CO2 emissions averted, once the GWP impact of alternatives phased- environment by affecting terrestrial and aquatic ecosystems, agricultural and fishery yields, as well curtailing, and ultimately stemming, the supply of new chlorofluorocarbons (CFCs) in an high upfront investment costs, but where transition to more energy efficient alternative in is accounted for. Expressed differently, this is akin to taking 290 coal-fired power plants offline. as the cyclical movement of chemicals, such as carbon, within the earth’s system. economically sustainable manner by spear-heading projects in major producing countries technologies allows a building owner to eliminate the use of harmful CFCs while generating The Bank is now working with country partners - including Argentina, China, Indonesia, Jordan, including, Argentina, China, India, Russia and Venezuela. Fully 80% of ODS production in quick returns on investment through energy savings. Additional financing schemes were required Vietnam and Thailand—to implement projects that strategically address their HCFC consumption This prompted the international community to take action to reduce the production and developing countries and CEITs was eliminated through projects implemented with the Bank. to promote uptake, and so in consultation with stakeholders, the Bank developed leveraging- and production phase-out obligations. Challenges exist in transforming HCFC sectors due principally consumption of the various substances that deplete the ozone layer. The Montreal Protocol on Production sector phase-out has had a significant global impact, balancing supply and demand: based schemes that allowed client countries to establish revolving funds. The demonstration to the low price of HCFCs as compared to alternatives, and limited affordable alternative technologies Substances That Deplete the Ozone Layer was adopted on September 16th, 1987 and entered the phase-out of CFC production sent a clear signal to importing countries that associated effect promoted greater energy efficiency in the chiller market, facilitated early replacement of available in the developing country context. Drawing from in-house experience, the Bank is applying into force on January 1st, 1989. It protects the ozone layer by enforcing the phase-out of the consumption phase-out was imminent, which compelled them to curb demand for CFCs through energy-inefficient, CFC-using chillers, contributed a significant reduction in ODS demand and in creative solutions to assist clients. New projects better reflect the convergence of the ozone and production and consumption of groups of chlorine or bromine-containing halogenated hydrocarbons. both regulatory means and technological conversions that would prevent consumers from having GHG emissions, and successfully demonstrated the economic viability and feasibility of the non- climate agendas and a sensitization to the possible climate impact of alternative technologies. to face possible supply restrictions or associated economic hardship from price jumps in ODS- CFC chiller technology. In 1990, the Parties to the Protocol established a financial mechanism, the Multilateral Fund for the based products. Minimizing Additional Environmental Impacts by Addressing Hydrofluorocarbon Implementation of the Montreal Protocol (MLF), to fund the incremental costs of compliance in (HFC) Use developing countries, a task complemented by the Global Environment Facility (GEF), which funds In Thailand, MLF and GEF grants were combined with a concessional Developed countries have already made significant progress in replacing HCFCs. The phase-out of ozone protection activities in Countries with Economies in Transition (CEITs). In 1998, Russia accounted for half the world’s production capacity loan to establish a fund to replace 24 CFC-using chillers with CFCs and HCFCs, has however, in certain cases led to growth in the use of another related class of CFCs and halons, potent ODS used in fire protection. Using its energy-efficient, alternative refrigerant technology. The financing of chemicals: HFCs). While HFCs pose no harm to the ozone layer, they do have high GWP and convening power, the Bank raised funding from 10 donor countries, structure and results of the demonstration project were so positive some are considered Short-Lived Climate Pollutants (SLCPs), gases with a short atmospheric The implementation of the Montreal Protocol has resulted in a 98% drop in total global production as well as from the GEF, to address this remaining production under that the Thai Government established an Energy Conservation Fund lifespan. Their growing use risks undoing the earlier progress made in support of the climate, of ODS, and initiated a restoration of the ozone layer that has prevented an estimated doubling of that supported the replacement of an additional 500 chillers, and a Special Initiative for ODS Production Closure. The program which has led to an urgent call for more non-HFC alternatives to be made available and adopted the UV-B radiation that would otherwise have been reaching the earth in the northern mid-latitudes ultimately fully reimbursed the grants that had been received from provided the compensation necessary to allow seven Russian such that the ozone-climate balance is positive on each side of the scale. by the year 2050. What’s more, since certain ODS are also greenhouse gases (GHG), their elimination enterprises to cease production and brought to a close the production the MLF and GEF. serves to protect not only our earth’s ozone layer but also the global climate. Implementation of the of CFCs and halons required by the Protocol in developed countries. In its MP program, the Bank promotes an approach that accounts for potential climate impacts, Protocol therefore, has also contributed significantly to global efforts to address climate change, In Turkey, high initial investment requirements, low electricity tariffs benefits and trade-offs along a product’s life, from production through disposal. On the ground, averting GHG emissions equivalent to approximately 8 billion tons CO2 per year between 1990– and a lack of fiscal incentives for adopting energy saving approaches this implies adopting a pragmatic approach that optimizes and minimizes the use of HFC in The Bank’s country-driven approach has been critical in designing, building support for, leading 2010 through transition to lower or no-global warming potential (GWP) alternatives. were a deterrent to chiller replacement. To overcome these barriers, applications when no other safe and proven alternative is available within the timeframe required and implementing projects and programs that respond to national needs and sustained phase-out the Bank worked with Turkish counterparts to design a program that of ODS. The Bank’s China Halon Sector Phase-out Project was the first MLF-funded project to for countries to meet their Protocol obligations, while in tandem promoting accompanying energy offered financing of 25% grants and 75% interest-free loans, based efficiency measures to encourage a positive net climate benefit from the transition. In addition, employ a performance-based, sector-wide approach with compensation to China in exchange for on a strict five installment payback schedule. This appealed to eliminating HFCs that are SLCPs can have a rapid net positive effect on the climate, while meeting agreed and independently verified, annual production and consumption reduction targets. Turkish building owners and the program achieved good success. complementing longer term CO2 mitigation efforts. The project also utilized an innovative market instrument, an auction, to more efficiently deliver grants to producers willing to advance halon production closure. The performance-based modality In order to stay at the forefront of the ever-changing technological developments surrounding the guided the production sector phase-out assistance provided by the Bank for all sectors in China, ozone-climate interface, the Bank’s MP program maintains regular dialogue with key private sector as well as in Argentina, India, Russia, the Ukraine and Venezuela. players, maintains a roster of technical experts, and organizes technology roundtables. This allows The Montreal Protocol on Substances That Deplete the Ozone Layer is one of the first the Bank to provide the best, most current advice to its clients on the best policies and practices Ground-level ozone, which occurs when vehicle emissions undergo a photochemical reaction, to limit the use of HFCs, and informs its role as an active partner in the Climate and Clean Air global environmental agreements to have recognized the precautionary principle. With Coalition, an umbrella for promoting global action on all SLCPs. is known as bad ozone. Good ozone occurs naturally in the atmosphere, in the stratosphere, the world’s 197 countries having ratified the Protocol, it is the only global environmental The Montreal Protocol is more relevant than ever to global environment challenges and the World Bank’s at a range of 15–30 km above the Earth’s surface, the height at which larger aircraft fly. treaty to boast universal ratification. 1 ODP is the ratio of the impact on ozone of a chemical compared to the impact of a similar mass of CFC-11. mission. The integration of energy efficiency and climate mitigation finance into the Bank’s MP program The ODP of CFC-11 is defined to be 1.0. Other ODS have ODPs that range from 0.01 to 12.0. can have significant benefit by reducing energy consumption, thus reducing the need for investing in new power generation capacity. This fully aligns with its strategic aim to promote sustainable green growth. Depletion of the ozone layer allows increased levels of ultraviolet (UV) radiation to reach the earth’s surface. Small amounts of Radiation from the sun are beneficial for living organisms, and essential for the production of vitamin D in people, but overexposure can result in acute and chronic health effects. The recognition of the direct effects of ozone depletion on human health was a major stimulus to the Montreal Protocol. The Effects of Ozone Depletion Human Health Studies have demonstrated that UVB causes chronic health effects on 1) the skin, including non-melanoma skin cancer and malignant melanoma development, 2) the eyes, through formation of cataracts, the clouding of the eye’s lens, and 3) suppression of the body’s immune response. Plants Excessive UVB radiation can directly affect the growth of plants, resulting in changes in form, nutrient distribution, developmental and metabolic phases, which in turn affect competitive balance and ability to fight diseases. Marine Ecosystems Phytoplankton, which form the basis of the marine food chain and are found in abundance around Antarctica, congregate in the sunny, warm upper layer of water. Exposure to excessive UVB radiation has been shown to disrupt their sense of orientation and reduce their survival rate. It has also been shown to impair the development and decrease the reproductive capacity of marine species such as fish, shrimp, crabs and amphibians which in turn, impacts animal populations that rely on these species for nourishment. Materials A number of materials of commercial interest for outdoor uses, such as nylon, neoprene and polystyrene, even when specially treated to protect from UV degradation, are adversely affected by increased solar UVB which accelerates their breakdown and limits their useful outdoor life. A sustained 1 percent depletion of ozone will ultimately lead to a 2-3 percent increase in the incidence of non-melanoma skin cancer. United Nations Environment Programme 2 M O N T R E A L P R OTO CO L 1987-2012