23 April 2011

The Technological Egg and Regulatory Chicken

A few bloggers (e.g., here and here and here) have rediscovered an interest in the case of ozone depletion, apparently via a desire to try to impeach Matt Nisbet's new report in any whichway possible. Nisbet makes a very brief reference to The Hartwell Paper's discussion of ozone policy. The lessons of ozone depletion policy are well worth understanding, so this post is a useful follow up.

In The Hartwell Paper (PDF) the only discussion of the lessons of ozone depletion policy were to characterize it as a "tame" problem amendable to a technological fix, as compared to climate change with is a classically "wicked" problem:
Originally described by Rittel and Webber in the context of urban planning, ‘wicked’ problems are issues that are often formulated as if they are susceptible to solutions when in fact they are not.28 Technical knowledge was taken as sufficient basis from which to derive Kyoto’s policy, whereas ‘wicked’ problems demand profound understanding of their integration in social systems, their irreducibly complexity and intractable nature.. .

The consequence of this misunderstanding was that there was a fundamental framing error, and climate change was represented as a conventional environmental ‘problem’ that is capable of being ‘solved’. It is neither of these. 
The key here is that ozone depletion was a "tame" problem in the sense that it was not only amenable to being solved, but being solved via a technological fix.  Climate change by contrast has more in common with issues such as poverty and conflict, in that such problems cannot be solved once and for all -- but we can do more or less well on them -- and, we argue, they certainly cannot be "solved" via a simple technological fix.

OK, back to the claims now being advanced about ozone.  Apparently some people want to believe that regulation in the case of ozone depletion caused technologies to emerge, almost instantaneously, and that from this lesson we should take (apparently) something relevant for climate policy, perhaps that regulation (if only we could pass it) would also spring forth an immediate technological fix.

The Hartwell Paper formulation is being challenged in current blog discussion by Edward Parson, a professor at Michigan, who wants to take issue with the idea that technological alternatives to CFCs helped to move along CFC regulations. He writes that it was science, and science alone, that led to regulation: "this was ALL about responding to scientific evidence for the risk, not a bit about availability of [CFC] alternatives."

It is my view that Parson claims are way overstated. Consider that DuPont, the world's major producer of CFCs at the time with 25% market share had patented a process for manufacturing HFC-134a (the leading CFC alternative) in 1980 after identifying it as a replacement to Freon in 1976 and had applied for more than 20 patents for CFC alternatives immediately before and after the signing of the Montreal Protocol. Du Pont saw alternatives as a business opportunity, e.g., its Freon division head explained in 1988: "''there is an opportunity for a billion-pound market out there.'' The fact that ozone regulations  focused on production, and not consumption, meant that there would still be a market for conventional CFCS into the 1990s, slowing down the deployment of substitutes, and making the transition easier for industry. Du Pont's decision to back regulation was motivated more by economic opportunity -- an opportunity that existed solely because of substitutes -- rather than exclusively about scientific arguments, though there is no doubt that the science played a role in the process.

In The Climate Fix (pp. 26-28) I argue that incremental technological advances on CFC alternatives (really starting in the 1970s) helped to grease the skids for incremental policy action creating a virtuous circle that began long before Montreal and continued long after (see this paper in PDF for a more in depth discussion).  In her excellent book on ozone depletion policy, Ozone Discourses, Karen Litfin explains (p. 95):
The issue resembles a chicken-and-egg situation: without regulation there could be no substitutes but, at least in the minds of many, without the promise of substitutes there could be no regulation.
This is indeed very much my view. It seems fairly obvious that the ease of deploying technological fixes can help to make it easier for regulations to be put into place, and the history of environmental (and other) regulations bears this out.

But for the purposes of discussion, let's take Parson's view as if it were  true. He explains:
The crucial technological advances that demonstrated the viability of alternatives all came after, not before, the political decision to impose 50% CFC cuts -- and the effort to generate these advances was motivated by the imminent threat of these regulatory restrictions -- not the reverse.
If we are to believe this, then we must also conclude that the chemical industry, notably DuPont, started working on technological substitutes no earlier than 1986 and within 3 years had not only demonstrated their viability, but had done so in a manner that began to allow rapid deployment displacing conventional CFCs (see figure at the top of this post).  If this was the case then the ozone issue was even more tame than we have argued in The Hartwell Paper -- it was in effect technologically trivial.  If Parson's history is correct then it leads one to conclude that the ozone case is even less relevant to climate change than we have argued (unless one wants to advance the fantasy that decarbonization of our economy is technologically trivial, awaiting only the regulatory magic wand).

Parson does not explain explicitly why he thinks his revisionist history matters in the context of climate change, but presumably it is because he and others want to believe that (a) a battle for climate regulations should be waged through arguments over science, and (b) that winning such battles over regulations can make technologies magically appear after those regulations are committed to by governments.

I write in The Climate Fix that if the ease of technological substitution for our fossil fuel-based energy system was as easy as it was on ozone that we wouldn't be debating the issue as it would have been solved already.  No amount of revisionist history can change the magnitude of the challenge of decarbonizing the global economy.  One lesson that I take from the ozone history for climate change policy is that pricing or regulating carbon, through whatever policy mechanisms, will be far more possible politically to the degree that technological substitutes are effective on performance and price.

UPDATE: Here is Richard Benedick, chief US negotiator, on the lessons of the ozone experience as related to climate change (emphasis added):
It is worth recalling that the 1987 Montreal Protocol on Substances That Deplete the Ozone Layer, later characterized by the heads of the UN Environment Program and the World Meteorological Organization as “one of the great international achievements of the century,” was negotiated by only about 30 nations in nine months, with delegations seldom exceeding six persons and with minimal attention from outside observers and media. I doubt whether the ozone treaty could have been achieved under the currently fashionable global format.

We might draw some useful lessons from the ozone history. In the late 1970s, the ozone science was actually much more disputed than the climate science of today, and the major countries that produced and consumed chlorofluorocarbons (CFCs) were hopelessly deadlocked over the necessity for any controls at all. In this situation, the first international action on protecting the ozone layer was neither global, nor even a treaty. Rather, it was an informal accord among a loose coalition of like-minded nations, including Australia, Canada, Norway, Sweden, and the United States, to individually and separately ban the use of CFCs in aerosol spray cans.

This measure alone resulted in a temporary 30% drop in global CFC consumption (temporary because these “wonder chemicals” were continuing to find new uses in numerous industries.) But the action was nevertheless significant for the future. The resultant technological innovations demonstrated to the skeptics (in this case the European Community, Japan, and the Soviet Union) that controls were feasible, at least for this class of products. It also gave the United States and other proponents of a strong treaty the moral and practical high ground in later negotiations to restrict all uses of CFCs. Yet, if anyone had actually proposed a 30% reduction target, it would surely have been rejected as impossible.

An important lesson here is that a specific policy measure, not an abstract target, could stimulate unanticipated technological innovation. The policy measure drove the agreement on targets in the later ozone protocol, not vice versa. In contrast, the half-hearted performance of most governments with respect to climate policy measures has not matched their political rhetoric about the urgency of targets.

Another important lesson from the Montreal history was that not all countries need to agree in order to take a substantial step forward. It is also relevant to note that, in contrast to Kyoto, developing nations did accept limitations on their CFC consumption, but only when they were assured of equitable access to new technologies. Technology development is the missing guest at the Kyoto feast. . .