Protocol is an international treaty on
substances that deplete the Ozone Layer. It is
designed to protect the ozone layer by phasing
out the production of a number of substances
believed to be responsible for ozone depletion.
The treaty was opened for signature on September
16, 1987 and entered into force on January 1,
1989 followed by a first meeting in Helsinki,
May 1989. Since then, it has undergone seven
revisions, in 1990 (London), 1991 (Nairobi),
1992 (Copenhagen), 1993 (Bangkok), 1995
(Vienna), 1997 (Montreal), and 1999 (Beijing).
Due to its widespread adoption and
implementation it has been hailed as an example
of exceptional international co-operation with
Kofi Annan quoted as saying it is "Perhaps the
single most successful international agreement
to UNIDO - "If we did not had Montreal Protocol
the levels of ozone-depleting substances would
have been five times higher than they are today,
and surface ultraviolet-B radiation levels would
have doubled at mid-latitudes in the northern
hemisphere. On current estimates the CFC
concentration in the
ozone layer is
expected to decline to pre-1980 levels by 2050".
1. The Issue
The Montreal Protocol on Substances that Deplete
the Ozone Layer is one of the first
international environmental agreements that
includes trade sanctions to achieve the stated
goals of a treaty. It also offers major
incentives for non-signatory nations to sign the
agreement. The treaty negotiators justified the
sanctions because depletion of the ozone layer
is an environmental problem most effectively
addressed on the global level. Furthermore,
without the trade sanctions, there would be
economic incentives for non-signatories to
increase production, damaging the
competitiveness of the industries in the
signatory nations as well as decreasing the
search for less damaging CFC alternatives.
Man-made chlorines, primarily
chloroflourobcarbons (CFCs), contribute to the
thinning of the ozone layer and allow larger
quantities of harmful ultraviolet rays to reach
the earth. The U.S. environmental Protection
Agency (EPA) has estimated that by the year
2075, the increased ultraviolet rays could
result in over 150 million new cases of skin
cancer in the U.S. alone, with the consequence
of 3 million deaths. Other damage caused by
ultraviolet rays includes increased eye
cataracts, and a
weakening of the body's immune system.
The Montreal Protocol's trade sanctions are a
novel approach to achieving multilateral treaty
goals. Because non-party nations could negate
efforts to reduce use and production of ozone
destroying chemicals, the treaty negotiators
included staged restrictions in the Protocol on
imports and exports. Developing nations were
encouraged to become party to the
Protocol within ten years.
Several options were considered for CFC and
halon emission control measures. One option
considered was to "allocate emission rights on
the basis of gross national product and
population." With this option it would be very
difficult to measure emissions, especially due
to the time lag between CFC production and their
release into atmosphere. A second option was
regulating the production of the ozone depleting
This was decided against because of the monopoly
rights it would confer on the producers. These
rights could allow price increases to the
benefit of the producers.
The consumption controlling formula eventually
decided upon was consumption equals production
plus imports minus exports. Jamison
Koehler and Scott A. Hajost of the U.S. EPA
First, the formula promotes economic efficiency
and free trade while achieving the same
environmental benefit, as Parties adjust
production, imports and exports of the
controlled chemicals to take advantage of
economies of scale and other market forces.
Second, by allowing parties to subtract exports
from the consumption equation, the formula
ensures that non- producing nations continue to
have access to the controlled chemicals until
substitute chemicals are available, thereby
removing production and consumption limits, the
formula implicitly recognizes the interests of a
much wider range of Parties -- producers and
of the chemicals alike -- in the protection of
the ozone layer.
Article IV of the Montreal Protocol addresses
Control of Trade with non-parties. The measures
stipulates that one year after the Treaty came
into force, all imports of "controlled
substances" (see Appendix 1) from any non-party
states are banned and that as of January 1,
1993, none of the signatories are allowed to
export a controlled substance to non-party
states. Further, a product annex was to be
developed listing the controlled substances
which are also banned one year after the annex
was developed. The parties were to consider the
feasibility of banning or restricting imports
produced with controlled substances and to
discourage exports of technology to produce and
use controlled substances to non-parties. The
trade measures attempt to ensure that there are
no economic benefits from CFC production for
Developing nations, including highly populated
China and India, are expanding their use of
products which contain CFCs, such as
refrigerators and air conditioners. Developing
countries argue that they have the right to
enjoy the same conveniences that developed
nations have and that they are not responsible
for the ozone damage. This debate resulted in
Article Five of the Protocol which allows the
signatory developing nations a ten year delay
for implementation of controls. In June, 1990 a
million World Bank fund was set up to aid the
developing nations efforts to reduce CFC usage.
Many fear that the gains in the treaty will be
eroded by the concessions to developing
countries regarding their date of compliance.
Trade considerations played a major role in the
original negotiation of the Montreal Protocol.
By the late 1970s the U.S. Congress had reduced
U.S. production of CFCs for aerosols by 95
percent, but the European Community (EC) member
states (except for West Germany) were not
considering legislation. The EC position was
that there was not enough scientific evidence to
justify legislation and that CFC substitutes
would be extremely costly to develop. U.S.
industry felt it unfair that EC industry
did not have to face similar economic obstacles,
while the Europeans believed U.S. industry was
advocating CFC reductions because it assisted
their competitive advantage.
The EC supported a production capacity cap,
while Canada, Finland, New Zealand, Norway,
Sweden, Switzerland and the United States
(joined later by Belgium, Denmark, Germany and
the Netherlands) supported production cuts. The
EC would have had a virtual monopoly on CFC
production if controls were implemented at the
point of production. This issue was settled by
the formula mentioned above: consumption equals
production plus imports minus exports. The final
50 percent reduction, signed in
September 1987, was a compromise between the 95
percent reductions of ozone depleting gases that
the United States called for and the 10 to 20
percent the EC expected.
In June, 1990, because scientific evidence
demonstrated a more rapid deterioration of the
ozone layer than had been previously estimated,
representatives from 59 countries signed revised
goals committing to the phase-out of most CFCs
by the year 2000 and the creation of a $160
million fund to aid developing countries in
their transition to other less ozone damaging
chemicals. The EC committed to phasing out CFCs
Some argue that the Montreal Protocol trade
sanctions may clash with GATT disciplines. "The
Montreal Protocol...for example, contains
provisions for trade retaliation against states
which do not comply with the protocol. Such
retaliation, as yet untried, would conflict with
the GATT treaty and CFC offenders could claim
the protection of GATT against trade sanctions."
The protocol may conflict with GATT in several
ways: Article XI generally forbids import and
export restrictions except tariffs and the most
favored nation clause which stipulates that
tariffs should be applied equally to all GATT
members products. Furthermore, the GATT
does dictate that nations apply the same
standards to imports that they do to domestic
products, and prior to the phase out of
controlled substances, imports from party
nations would be treated differently from the
banned imports of non-party nations. However,
the ultimate goal of the trade
provisions of the revised (in London, 1990)
Montreal Protocol are zero imports, exports and
consumption of some of the ozone depleting
As the allowed quotas of ozone damaging
chemicals move toward zero and as the ten year
delay provided to developing nations comes to an
end, it is likely that some nations will present
arguments to GATT. It would be extremely
difficult to achieve the goals of the Montreal
Protocol without the trade sanctions; therefore,
a GATT ruling against the sanctions would
allow environmental damage that many nations
have decided require
drastic actions to address.
The Montreal Protocol is a landmark
environmental treaty. It may serve as a
model for future multilateral treaties which
confront global issues, although just as the
treaty negotiators selected the trade sanctions
only after ruling out other less optimal
alternatives, future negotiators should also
weigh all their options.
Between 1986 and 1993, world CFC production fell
by about 60 percent, from about 0.9 millions
tons to about 0.4 million. While large
companies like DuPont have deeply invested into
alternatives such as HFCs, supposedly that are
less damaging to the ozone. Negotyiators are
also considering the addition of HCFCs to its
Developing country production, however, has
exploded, rising 87 percent over the period,
with exports rising 17 fold. Furthermore,
a huge black market has arisen, with estimates
that 20 percent of sales are illegal and
originate in developing countries. Part of the
reason is that promised funding to developing
countries was less than promised, $126 million
of $149 million.(1)
3. Related Cases
(1): Trade Product = CFCs
(2): Bio-geography = GLOBAL
(3): environmental Problem = OZONE loss
4. Draft Author: Michelle Dearing
Completed: 6/1993 Updated: 3/1996
B. LEGAL Filters
5. Discourse and Status: AGReement and COMPlete
6. Forum and Scope: UN and GLOBAL
The Montreal Protocol negotiations were
conducted under a framework agreed to in the
1985 Vienna Convention for the Protection of the
Ozone Layer. The negotiations were conducted
under the auspices of the United Nations
environment Programme (UNEP) under Executive
Director Mostafa Tolba.
U.S. Legislation revised Montreal Protocol
requirements are met or exceeded in the U.S.
Clean Air Act Amendments of 1990, PL 101-549.
Fiscal 1990 and 1991 budget reconciliation
bills, PL 100-239 and PL 101-508 respectively,
include excise taxes on Montreal Protocol
EC Legislation was set in Council Regulation
(EEC) No. 594/91 set quantitative limits on
imports from third countries for controlled
substances from 1991 through 2005 when imports
will be zero for all substances covered by the
Commission Decision, 91/359/EEC, dated July 15,
1991, allocated import quotas of
chlorofluorocarbons (CFCs) for the time period
July 1, 1991 to December 31, 1992.
7. Decision Breadth: 100 (signatories)
8. Legal Standing: TREATY
C. GEOGRAPHIC Filters
9. Geographic Locations
a. Geographic Domain : GLOBAL
b. Geographic Site : GLOBAL
c. Geographic Impact : GLOBAL
10. Sub-National Factors: NO
11. Type of Habitat: GLOBAL
D. TRADE Filters
12. Type of Measure: Import Ban [IMBAN]
The primary mode for curtailing CFC use was in
production, but quota enforcement was left to
import bans (and phased import bans) with the
possibility of retaliation against violators. As
of January, 1993, no signatory nations were
allowed to import controlled substances from
non-signatories (see Table 48-1).
These ozone-depleting potentials are estimates
based on existing knowledge and are to be
reviewed and revised periodically.
Group Substance Ozone-depleting potential*
Group I CFCl3 (CFC-11) 1.0
CF2Cl2 (CFC-12) 1.0
C2F3Cl3 (CFC-113) 0.8
C2F4Cl2 (CFC-114) 1.0
C2F5Cl (CFC-115) 0.6
Group II CF2BrCl (halon-1211) 3.0
CF3Br (halon-1301) 10.0
C2F4Br2 (halon-2402) na
* With CFC-11 as base.
13. Direct vs. Indirect Impacts: DIRect
14. Relation of Trade Measure to Resource Impact
a. Directly Related : YES CFCs
b. Indirectly Related : YES products using CFCs
c. Not Related : YES RETALiation
d. Process Related : YES OZONE depletion
The measure bans the import of CFCs and permits
retaliation against offenders. Not only does it
directly ban the trade of CFCs but also products
which relate to the CFCs as a component part
(refrigerators and air conditioners) or products
which are used in certain ways, such as the
cleaning of computer products.
15. Trade Product Identification: CFCs
CFCs and halons are chemicals used widely as
refrigerants, in aerosols, for cleaning circuit
boards and electronic components, and other
16. Economic Data
Production of CFCs increased from 150,000 metric
tons in 1960 to over 800,000 metric tons in
1974. EC exports increased 43 percent from 1976
to 1985 and exports averaged one third of EC
production. Almost all of U.S. production was
consumed in the United States. In 1988, the EC
countries were responsible for two thirds of the
world's CFC production.
17. Impact of Trade Restriction: BAN
18. Industry Sector: CHEMical
19. Exporter and Importer: MANY and MANY
E. environment Filters
20. environmental Problem Type: OZONE depletion
This is a problem of ozone loss, which in turn
leads to a variety of other problems such as
climate change and species loss, including human
21. Name, Type, and Diversity of Species
22. Resource Impact and Effect: HIGH and SCALE
Without steps to control ozone depletion, this
problem might develop rather quickly. Already
there is evidence of a worldwide increase in
skin cancer rates.
23. Urgency and Lifetime: HIGH and NA
Since practically all species will be affected
by the depletion of the ozone layer, it is
difficult to estimate the years to extinction.
24. Substitutes: Bio-degradable [BIODG] products
VI. OTHER Factors
25. Culture: NO
26. Trans-Border: YES
Although the problem is not directly a
the air is clearly trans-border due to air
27. Rights: NO
28. Relevant Literature
Benedick, Richard Elliot. "Ozone Diplomacy."
Issues in Science
and Technology (Fall 1989): 43-50.
Bown, William. "Trade Deals a Blow to the
Scientist (November 10, 1990): 20-21.
EC Office of Press and Public Affairs. "E.C.
on Protecting Ozone Layer." European Community
27/88 (October 19, 1988).
Economist, "Holed Up," 337/7944, December 9,
environmental and Energy Study Institute. "EESC
1991 Members' Briefing Book. Washington, D.C.
European Community. Commission Decision of 15
Allocating Import Quotas for Chlorofluorocarbons
the Period 1 July 1991 to 31 December 1992
Official Journal of the European Communities,
(17 July 1991): L 193/42-L 193/43.
European Community. Council Regulation (EEC) No
594/91 of 4
March 1991 on Substances that Deplete the Ozone
Official Journal of the European Communities,
(March 14, 1991): L67/1 - L67/10.
"Hole-stoppers." Economist (March 7, 1992): 76.
Jachtenfuchs, Markus. "The European Community
and the Protection
of the Ozone Layer." Journal of Common Market
XXVIII/3 (March 1990): 261-277.
Kerr, Richard A. "Ozone Destruction Worsens."
(April 12, 1991): 204.
Koehler, Jamison and Scott A. Hajost. "The
Montreal Protocol: A
Dynamic Agreement for Protecting the Ozone
Ambio 19/2 (April 1990): 82-86.
Monastersky, R. "Nations to Ban Ozone-Harming
Science News 138/7 (July 1990): 6.
Randal, Jonathan C. "Conference Opens on Ozone."
Washington Post (March 6, 1989): A9-A10.
Rosencranz, Armin and Reina Milligan. "CFC
Abatement: The Needs
of Developing Countries." Ambio 19/6-7 (October
Shabecoff, Philip. "Accord is Reached to Protect
York Times (September 16, 1987): A11.
United Nations environment Programme. Montreal
Substances that Deplete the Ozone Layer. 1987.
1. Economist, "Holed Up," 337/7944, December 9,