Economics of the “Critical Use” of Methyl Bromide Under the Montreal Protocol

Abstract

We analyze the economics of granting temporary exceptions to the phaseout of methyl bromide (MeBr) under the Montreal Protocol on Substances that Deplete the Ozone Layer. The protocol allows such exceptions based on technical or economic “feasibility” through a critical use exemption (CUE) process. Data compiled under the protocol make it possible to set forth criteria for the exceptions based on estimation of the benefits of compliance in terms of “willingness to pay” to abate the externality, as well as costs to the users creating the externality. We estimate a political willingness to pay and show that market and supply effects would reduce losses to MeBr users below estimates of such losses provided in CUE nominations. This suggests that the phaseout of MeBr can proceed with considerably fewer CUEs than requested by the parties. (JEL Q1, Q2, Q3, H8)

The Montreal Protocol at 20: Ongoing opportunities for integration with climate protection

“…4 It has been observed that ex ante estimates of the costs of environmental regulations tend to be higher than the actual costs (Harrington et al, 2000;Goodstein, 1997), and this pattern has been borne out for the ODS phaseout. Per unit costs of ODS abatement have fallen over time; this finding as reported in DeCanio and Norman (2005) based on statistical analysis of data from the MF through 2003 has been confirmed for Fund data extending through the end of 2006; costs continue to fall at a rate of about $US 420/ODP ton annually. 5 Any tendency to take advantage of low-cost abatement opportunities first (the socalled 'low hanging fruit' phenomenon) has been dominated by cost reductions over time.…”

Sociology in Global Environmental Governance? Neoliberalism, Protectionism and the Methyl Bromide Controversy in the Montreal Protocol

“…Additionally, California buffer zone regulations, technical constraints faced by some farmers due to farmland geography, and financial costs associated with switching to alternatives were all real issues facing farmers and the California Strawberry Commission that represented them at the Montreal Protocol meetings. For further discussion of these issues, see [66,[70][71][72][75][76][77][78]). While both assessments clusters were backed by sound research, the varied approaches meant that the US and its constituents had a range of possibilities with which to challenge the methyl bromide phase-out.…”

“…The US delegation, however, did not accept the MBTOC assessment. The US chose to highlight the studies that predicted a costly reduction as opposed to those that were the focus of the global scientific community, studies that saw very little cost associated with the phase-out for strawberry growers-the key actors of concern [77]. They highlighted as well how the local economic and geographic conditions made the application of alternatives more difficult than the MBTOC study acknowledged.…”

A critical review of the successful CFC phase-out versus the delayed methyl bromide phase-out in the Montreal Protocol

“…Goodhue et al 2005) with financial support from the California Strawberry Commission. While studies supported by the MBTOC showed that the phase-out of MeBr in strawberry and tomato production was efficient from a general welfare viewpoint (e.g., DeCanio and Norman 2005; see also DuPuis and Gareau 2008), the market disruption approach showed that a reduction in MeBr would have a negative economic impact on some U.S. strawberry growers and would allow competing regions to gain market share over them (see Gareau 2008b). By side-stepping the general welfare viewpoint, the Protocol had circumvented a key concern of ecological modernization; improving overall social and environmental welfare (Fisher et al 2009).…”

“…The overall welfare of the global economy and products that depend on components that require CFCs changed with MeBr to concerns for a few growers who contribute comparatively little to the global economy. Unlike Montreal Protocol CFC amendments, since 2003 MeBr amendments have at times increased MeBr use, not always tightening restrictions on use (DeCanio and Norman 2005).…”