Senate Ratifies Anti-Consumer Kigali Amendment–but with A Silver Lining Regarding China

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Last Wednesday, the Senate ratified the Kigali Amendment, a United Nations treaty restricting supplies of hydrofluorocarbons (HFCs), a widely used class of refrigerants now targeted as contributors to climate change. Joining every Senate Democrat present in support of this costly treaty were 21 Republicans, for a final tally of 69-27. While U.S. ratification of its first climate treaty is bad news, the Senate did include one  useful amendment reining in China’s claimed status as a developing nation.

An extensive, years-long lobbying effort conducted by the air conditioning and refrigeration sector, allied with environmental groups, finally led to ratification. These companies see the Kigali Amendment as a way to use the issue of climate change to skew the market toward more expensive refrigerants and equipment. They were led by Honeywell and Chemours, both of which have patented a suite of expensive but supposedly climate-friendlier replacements for HFCs and will now have a de facto captive market for them.

Domestic restrictions on HFCs were added to a December 2020 lame duck spending bill, and took effect on the first of this year. They have already led to a quadrupling in the price

of the HFC needed to run most home air conditioners and a jump in the price of the HFC used in most vehicle air conditioners. Repair costs will likely continue rising in the years ahead as the HFC quotas get significantly tighter. New equipment will also be pricier, as it will have to be redesigned to use one of the new HFC replacement refrigerants.

The Kigali Amendment will make matters worse by layering international restrictions on top of the domestic ones. Also, since treaties are harder to reverse than legislation, it will be more difficult for Congress to modify the HFC restrictions even in the face of a possible consumer backlash.

One important piece of good news that did emerge from the debate is that the Senate supported, by a 96-0 margin, an amendment from Senators Mike Lee (R-UT) and John Sullivan (R-AK) that China can no longer be classified as a developing nation under the Kigali Amendment. This developing nation status gave China more favorable treatment under the treaty and would have conferred a competitive advantage relative to the U.S., but that will no longer be the case—assuming the United Nations follows through on reclassifying China.

Significantly, since China also benefits from developing nation status in other treaties, including the U.N. Framework Convention on Climate Change, this unanimous amendment sets an important precedent.