Comment Log Display

Comments by The Alliance for Responsible Atmospheric Policy
on California Air Resources Board's
Preliminary Draft Regulation for a Cap-and-Trade Program

January 11, 2010

	On behalf of the Alliance for Responsible Atmospheric Policy
(Alliance), an industry coalition representing producers and users
of HFC compounds, we submit the following comments on the
Preliminary Draft Regulation for a California Cap-and-Trade Program
in accordance with the California Global Warming Solutions Act of
2006 (AB 32).  

	The Alliance was organized in 1980 and has been the leading
industry organization on the Montreal Protocol.  In addition to
addressing effective international and domestic policies for
fluorocarbons and for protection of the earth’s ozone layer, the
Alliance is also working to assess the appropriate manner to
address HFCs and their impact on global climate change.  A
membership list follows at the end of the comments.

	The Preliminary Draft Regulation appears to include HFCs in the
basket of gases included in the cap-and-trade program.  It is noted
on page 108 that producers, importers, and exporters of fluorinated
greenhouse gases could be covered.  The definitions appear to
include only HFCs as such a gas.  The Alliance points out that none
of the cap-and-trade programs that have been established so far,
including those in Europe or the US Northeast Regional Greenhouse
Gas Initiative (RGGI), include HFCs in their trading scheme.  

	Unlike most other greenhouse gases, HFCs are not waste gases that
are routinely emitted to the atmosphere.  HFCs are intentionally
produced compounds that serve specific consumer and societal needs
in a variety of applications, such as consumer appliances, air
conditioning systems, supermarket refrigeration, foam insulation,
fire suppression, and medical metered dose inhalers.  HFCs are
replacements to ozone-depleting CFCs and HCFCs that are being
phased out under the Montreal Protocol, and have already reduced
the impact on global warming compared to CFCs.  Because HFCs have
no ozone depletion potential, they are becoming increasingly
important as the phaseout of CFCs and HCFCs progresses, and as
market growth occurs, particularly in refrigeration and
air-conditioning applications.  

	The US House of Representatives passed H.R. 2454 on June 25,
2009.  The bill -provided a separate cap-and-trade reduction
schedule for HFCs.  HFCs were not included in the basket of other
greenhouses that were subject to a wider and broad cap-and-trade
program.  The House appeared to recognize that including HFCs in
the broad cap-and-trade basket of gases would result in consumption
reductions that are unachievable and unaffordable.  Nevertheless,
the HFC provisions are significant because they achieve greenhouse
gas reductions with a market-based approach while minimizing market
disruption. 

	Theoretically, HFC producers/importers could purchase allowances
to meet demand for HFCs in excess of the cap; however, the higher
cost of these allowances could make HFCs unaffordable for
downstream HFC users (e.g., HFC product/equipment manufacturers,
distributors, contractors, consumers).  As a result, HFC-containing
product/equipment manufacturers and importers might need to scale
back, which could result in a shortfall of HFC-containing
products/equipment for consumer needs.  

	The Alliance supported H.R. 2454, which included separate
treatment of HFCs, including a substantial phasedown.  The Alliance
noted that the bill provided challenging framework for achieving a
significant reduction of HFC greenhouse gas contributions, while
recognizing the important societal role these compounds play by
contributing to our health and well being.  The bill reduces HFC
emission contributions 85% below the 2005 base period by 2033,
thereby eliminating between 16 and 25 billion carbon tons of carbon
dioxide equivalent emissions between 2012 and 2050, depending on
business as usual projections and the progress of substitute
technology development.  This is a much more accelerated pace of
reduction compared with the reduction for the non-HFC greenhouse
gases.  

	S.B. 1533, currently under consideration by the U.S. Senate,
contains HFC provisions that are nearly identical to H.R. 2454.	In
addition, there is a movement underway, supported by the US,
Canada, Mexico, and nearly 40 other countries to treat HFCs
separately in the international climate treaty process by moving
them from the climate treaties to the Montreal Protocol where their
production and consumption would be addressed.  The climate
treaties would continue to address emissions.  Many, including the
US, believe that the Montreal Protocol is better able to address
HFCs since the treaty has the expertise as well as the
infrastructure in place to better implement environmental
protection through its provisions.  

	Since 2006, the Alliance has also worked collaboratively with
CARB in the implementation of AB 32 relating to HFCs.  We note that
CARB has developed a comprehensive plan for achieving HFC emissions
reductions.

	As a result of the work already done by CARB and the precedents
for regional, federal and international separation of HFCs, the
Alliance believes that HFCs should not be covered by the California
Cap-and-Trade Program.

Regards,



Dave Stirpe
Executive Director


 
MEMBERSHIP LIST

AGC Chemicals Americas
Air Conditioning, Heating & 
      Refrigeration Institute
Airgas
American Pacific Corp.
Arkema
Association of Home
     Appliance Manufacturers
Bard Manufacturing Co.
BASF
Brooks Automation, Inc.
Cap & Seal Company
Carrier Corporation
Center for the 
      Polyurethanes Industry
Coolgas
Danfoss 
DuPont
Dynatemp International
Emerson Climate
     Technologies
E.V. Dunbar Co.
Falcon Safety Products
FP International
General Electric
General Motors 
Golden Refrigerant
Halotron 
Heating, Airconditioning &
      Refrigeration Distributors
      International                 
Honeywell
Hudson Technologies
ICOR International
Ineos
Ingersoll-Rand
International Pharmaceutical
       Aerosol Consortium
Johnson Controls
Lennox International
McQuay International
Metl-Span Corporation
National Refrigerants
Owens Corning Specialty & 
        Foam Products Center
Polar Technology
RemTec International
Rheem Manufacturing Company
Ritchie Engineering
Solvay
Sub-Zero 
The Dow Chemical Company
Trane Company
Whirlpool Corporation
Worthington Cylinder