Letter 8: Constructing the Ozone Project Portfolio
To: Chris N. Eppers, Solar Musketeers
From: Susan C. Sunner, Rising Robins
Re: Ozone operational strategy and NGO views.
Dear Chris,
Nani sure has an unsustainable appetite for GEF trivia... As you requested,
here is some background on the ozone focal area and operational strategy. Understanding
the ozone operational strategy can be difficult, unless you have a good understanding
of the international treaties related to prevention of ozone layer depletion,
particularly the Montreal Protocol on Substances that Deplete the Ozone Layer.
Here, I hope, is a simple overview, beginning with some background on the Montreal
Protocol.
Background
Countries which are party to the Montreal Protocol have committed themselves
to phasing out ozone depleting substances (ODS), particularly chlorofluorocarbons
(CFCs). The Protocol contains schedules for reducing the production and consumption
of these substances. In order to assist poorer countries in doing this a financial
mechanism, called the Multilateral Fund, has been established. There are certain
conditions on the Fund, which I won't go into here, but the effect is that there
ate countries, mostly in Central and Eastern Europe, which need to reduce production
and use of ODS, but do not have access to the Fund's resources to do so. The
ozone focal area of the GEF is used to complement the Multilateral Fund, which
is administered by the World Bank.
The Pilot Phase
Examples of Pilot Phase projects include one in the Czech Republic which involves
phase-out of ODS through a national refrigerant recovery, reclamation, and recycling
programme, and introduces low and non-ozone depleting technologies. Another
project involves support for a regional monitoring and research network for
ozone and greenhouse gases in the Southern Cone (Argentina, Brazil, Chile, Paraguay,
and Uruguay).
The Operational Strategy
The operational strategy for ozone depletion (Chapter 5 of the Revised Operational
Strategy, GEF/C.6/3) sets out where guidance on its ODS activities will come
from, country eligibility, relation to other focal areas, and activities that
would make up this portfolio. The guidance would be based on the requirements
and provisions of the Montreal Protocol, such as its list of control measures
and controlled substances, and the ODS phase out schedules. With regard to country
eligibility, the GEF would assist countries which are not Article S countries
(that is, most but not all Central and Eastern European countries) to phase
out ozone depleting substances. (In the Montreal Protocol Article S countries
are those which have not exceed a threshold of 0.3 kg. per capita of ozone depleting
emissions.) Countries which are eligible for Multilateral Fund financing would
also be eligible for GEF assistance provided it is used For projects that are
not eligible under the Montreal Protocol. NGOs have been critical of this provision
because it creates the possibility that very limited resources would be spent
on research rather than on projects that actually cut emissions of ODS.
Activities in this focal area would consist of country programmes to phase
out ODS and projects for short-term ODS phaseout measures. A country programme
includes an overview of the production, consumption, trade, and all projects
to ensure compliance with the Montreal Protocol. The GEF will provide assistance
for preparing these programmes, if a country does not yet have one. It will
focus on identifying ODS phaseout projects. The lead agency for the GEF country
programmes will be UNDP, with input from UNEP providing information and training.
UNDP is supposed to work with the World Bank to identify the phaseout projects.
The short-term phaseout activities would be developed and managed by the World
Bank. The criteria of proposed measures includes cost-effectiveness, likelihood
of success, country integration, and non-toxicity of ODS substitutes. Initially
emphasis would be on projects that achieve the greatest reduction at lowest
cost; that avoid non-compliance with the Montreal Protocol; that enable complete
phaseout of ODS in entire sectors or countries; and that provide benefits in
other GEF areas. The GEF would again only fund the incremental cost of these
measures. There are additional conditions on eligible expenditures, stemming
from the Montreal Protocol, and are related to retroactive financing, exports,
ownership, operational costs, increases in use of 0D5.
Use of methyl bromide for integrated pest management in the biodiversity focal
area could contribute to ozone depletion. Consequently biodiversity programmes
using methyl bromide would not be funded.
NGOs following the ozone operational strategy have been critical of this short
term approach. They say it is not environmentally sustainable and that it will
be more expensive over the long run. This is because the strategy does not prohibit
the use of transitional substances with an ozone depleting potential (hydrochlorofluorocarbons
- HCFCs) nor does it prevent the use of substances which are potent greenhouse
gases (hydrofluorocarbons - HFCs). HCFCs are, and HFCs are likely to be, subject
to control by international treaties. The reason for the shortcoming is that
the producers of HCFCs and HFCs have effectively promoted their technologies
with governments. The result has been a significant weakening of the strategy.
The ozone strategy states, with regard to climate change (para 5.14):
"There are two potential ways in which the phase out of ozone-depleting
substances might add to the risk of climate change. The first is the use of
substitutes that have a high global warming potential. The second is the introduction
of less energy efficient technologies that do not use ozone depleting substances.
If energy is supplied from fossil fuels, decreasing energy efficiency would
increase emissions of greenhouse gases. Therefore, the GEF will fund the conversion
to the technology with the least impact on global warming that is the most technically
feasible, environmentally sound, and economically acceptable."
In the original version of this paragraph, the last sentence was stronger and
stated "the GEF will discourage the use of any transitional substitutes
that have a remaining ozone depleting potential and a significant global warming
potential". An even earlier version stated "Therefore the GEF will
not fund the conversion to any ODS substitute that has a significant global
warming potential unless explicit justification is provided that: a) no alternative
is technically feasible; b) the alternative is economically unacceptable".
NGOs were disappointed that these sentences were removed.
The NGOs argue that use of these two substitutes now will necessitate a second
conversion at additional cost at a later date. However, the ozone strategy,
as it now stands, will concentrate on replacing CFC technologies. It is not
clear, therefore, who will pay the costs of second conversions and when.
There are technologies available, in certain sectors, which do not contribute
to ozone depletion and have a low global warming potential. Some are low cost
and readily available. In keeping with its mandate to provide global environmental
benefits, the GEF should be actively promoting these technologies for their
environmental and cost benefits. Because of industry influence, however, the
ozone strategy appears to be encouraging, rather than discouraging these technologies.
All of this means that NGOs will have to work hard to convince Council members
not to approve projects which use HFCs or HCFCs and will have to capitalise
on the "environmentally sound" criterion. Recipient country NGOs will
also have to monitor project development in their own countries and help educate
their industries and governments about environmentally sound alternatives.
If you want to know more about this focal area or NGO positions, the person
to contact is:
Robin Round
Sierra Club of Canada
1 Nicholas Street, Suite 620
Ottawa
Ontario K1N 7B7, Canada Tel: (613) 241-4611
Fax: (613) 241-2292
e-mail: rjr@web.apc.org
