If the United States is to maintain its dominance in technology innovation, we will need to continue to successfully compete in global markets. It’s as true for HVACR as for any high-tech industry; it means that we must be prepared to play by the same set of rules so that our products meet international norms. This includes the Montreal Protocol, which was amended in 2016 to include the phasedown of HFC chemicals. The amendment, signed in Kigali, Rwanda, will go into force on January 1, 2019. The U.S. has yet to ratify the amendment, but is taking steps that could lead in that direction.
On the heels of the recent D.C. District Court ruling which removed EPA’s authority for phasing down HFCs, hopes for a phasedown turn to the Kigali Amendment. If the Senate were to ratify Kigali, it would provide EPA with the authority to phase down HFCs. There are other benefits as well.
A few weeks ago, the Hudson Institute, a Washington, D.C., think tank that is well respected for its work in areas such as international relations, economics, and technology, held an event to discuss the Kigali Amendment. All speakers, including editor Steve Forbes, stated the need to approve the treaty. David Banks, then the President’s Special Assistant for International Energy and the Environment, stated that the U.S. “has to balance economic growth and environmental concerns,” which is “missing from the climate discussion.” This is different than Europe and much of the world, where a ‘no regrets’ environmental policy leads economic policy.
To rewind, the Kigali Amendment was adopted in 2016, but still needs to undergo formal ratifications by each country. As of this writing, more than 20 countries have ratified, assuring that it will go into effect on January 1, 2019. In the U.S., ratification means 67 Senate votes after the Administration has sent it to the upper chamber for their consideration.
Now is the time to develop support for Senate ratification. Why? In the U.S., we are already transitioning to new, low-GWP (global warming potential) technologies. Any uncertainty that has come about due to the court’s EPA decision needs to be dispelled. Internationally, developing countries are quickly moving away from HCFCs. These countries, representing more than $1 trillion in HVACR sales in the next decade, are looking to see how their future technology needs can be met. The U.S. is in heated competition to sell to these growing markets.
Fortunately, the industry’s presence in every state makes it well positioned to effectively deliver its message to Congress.
Then, how to get the Administration’s backing? The Trump Administration has made it clear that it’s all about jobs, jobs, jobs. It is incumbent upon industry to be able to tell a credible story of how keeping in step with the rest of the world’s refrigerant phasedown will allow U.S. manufacturers and technology to continue to dominate in the global market. Conversely, by not being part of the global phasedown, the U.S. will cede the technological lead as well as give up growing export markets, as the U.S. HVACR industry will have to concentrate its resources to satisfy a market at home that is different than the rest of the world. In fact, we do have a great story to tell: an industry study shows that ratification of the Kigali Amendment will result in a significant amount of new domestic investment, new U.S. jobs, increased exports, and decreased imports.
Getting the Administration and Senate support is a challenge that is playing out now and will be for the months to come. Now is the time to work with your industry or professional associations to make sure our story is being told at the highest levels of our government.