IDENTIFICATION
LEGAL CLUSTERS
GEOGRAPHIC CLUSTERS
TRADE CLUSTERS
ENVIRONMENT CLUSTERS
OTHER FACTORS

I. Identification

1. The Issue

Chlorofluorocarbons (CFCs) are known as ozone-depleting compounds. They are used primarily in refrigerators, and air conditioners. While many companies have used substitutes to replace CFCs in their products, there are still numerous individuals who possess or continue to produce products that use CFCs, which creates a demand that is met by smugglers who make a considerable profit. As a result, the nations that have already banned CFC production (the U.S. and members of the EU) are struggling to prevent the influx of illegal CFCs into their territory, to prevent the expansion of a market dangerous to the environment.

The Montreal Protocol, a treaty developed to phase out the use of CFCs, was ratified in 1987 and signed by representatives from 110 nations. Though many nations have already phased out the use of damaging CFCs, the less-developed nations, which have been granted extra time to adjust to the forthcoming ban, are producing CFCs at an increased capacity, and selling them on the black market to countries which are not allowed to produce them.

2. Description

"The black market in CFCs would not exist without the continued production of CFCs in developing countries. Indeed, the black market is a symptom of continued production, and as such, the fate of the black market is tied directly to the fate of the dozens of CFC factories still in operation worldwide. Wherever CFCs are produced, they become available in the global marketplace. As long as they are produced, smugglers will find a way to get them to their consumers, no matter how numerous the enforcers along the border and the pencil-pushers in national capitals."¹

Since 1995, the production of chlorofluorocarbons (CFCs) has been banned in Europe, and banned in North America since 1996. In other, less developed countries including China, Mexico, India and Russia, CFCs can be legally produced until 2010. Unfortunately, the attempt to help less-developed countries by giving them a longer time to adapt to international standards, has backfired on those nations who have already prohibited CFC production.

Russia alone is responsible for 47 percent of the illegally produced CFCs--"the Russian government is simply too poor and too corrupt to close the seven factories that are still churning out the stuff."² Instead of phasing out CFC production over an extended period of time, Russia has increased production of the offending chemicals, because there is still a high demand that exists in countries where CFC production is banned. As a result, smuggling CFCs has become a lucrative business, even more profitable than drug trafficking. While it is legal to sell recycled CFCs to countries where there is a production ban, it is illegal to sell newly produced CFCs to those same countries. Often times, CFCs are openly sold to developed countries under the guise of recycled chemicals.³

Increased production of CFCs in developing countries, combined with an increase in smuggling, has altered previously optimistic predictions about repairing the ozone.⁴ Now, scientists fear the consequences to the environment--instead of restoring the ozone, it is now expected to get worse. Plants and animals, important to maintain the stability of the environment, will be decreased or damaged, which will upset the natural order and start a chain reaction of events that may endanger or overpopulate a particular species or plant.

• there will be a significant increase in the number of people and animals who contract skin cancer and cataracts
• the ability to fight infection and disease will be decreased in all living things
• forests will be damaged: including existing trees and seedlings
• fish can die from overexposure to UV-B radiation
• the ability to photosynthesize will be reduced, as will the size and abundance of plant life
• crop yields will decrease ⁵
  

Environmentalists plead with smugglers to stop trafficking illegal CFCs and with politicians to more vigorously enforce international law, but their arguments are not compelling enough to affect change fast enough. Governments around the world, like the Russian mafia, are more concerned with the financial aspects of CFCs than the detriment to the environment. The fact is, the mafia sells drugs and dangerous weapons to anyone who can afford to pay the price.

For examples of recent cases of illegal CFC smuggling and purchases, go to the Environmental Protection Agency (EPA) home page, EPA home page

3. Related Cases

Keyword Clusters
Trade Product=CFC
Country= Russia
Environmental Problem=Ozone Depletion [OZONE]

4. Draft Author: Betsy Fischman

April 1999

II. Legal Clusters

5. Discourse and Status: DISagree and INPROGress

6. Forum and Scope: MULTInational

7. Decision Breadth: GLOBAL

8. Legal Standing: Treaty and Law

The decision to ban the production of CFCs in order to protect the ozone layer, was first introduced in 1987- the Montreal Protocol treaty. As a result, developed nations agreed to ban the production of CFCs after a specified period, allowing time for each country to adjust to the new requirements.

Less developed countries were given an extended period of time to conform to international standards, in order to ease these nations into the new standards, avoiding any adverse effects to their fragile economies. The intent was to be fair to countries with less advanced technology by giving them more adjustment time in order to help reach the common goal of protecting the world from environmental dangers.

Though the treaty was signed in a short period of time-- "so great was the concern about the impact of CFCs and other ozone-depleting gases on the ozone layer (which protects us from the sun's ultraviolet rays) that the protocol was negotiated and signed in less than three years,"⁶--agreement has been based mainly on developed countries. As a result of the Montreal Protocol Treaty, all parties involved were given a fixed time to adjust their businesses to the upcoming ban against ozone depleting chemicals, including CFCs. Some nation-states received a longer time period to adapt, taking into consideration the level of development and the effect the conversion would have on the economy of each country.

It is important to note, however, that all countries were given time to adjust their businesses, in order to protect them against economic failure. Although the environment is viewed as an important concern, business is more important in the immediate future--any steps taken to protect the environment from destruction can only be agreed upon if business interests are protected.

The less developed countries, which have been given up to fifteen years more than their counterparts, are not on track to phase out production of CFCs. Not only are the alternatives to CFC production costly, but it has proven to be very profitable for nations like Russia to smuggle illegal CFCs into countries like the United States where the ban is already in effect. In this case, the concessions given to countries in need backfired against the benefactor nations--now the less developed countries are making the profit, and the world is suffering the consequences.

As a result, the ozone layer is now in greater danger than originally predicted, when negotiations first began. Because countries like Russia, which are much less developed than European nations, have been given a longer time period to adjust, and been allowed to produce CFCs during this period, they have taken advantage and increased production to aggrandize local profits. In this case, protecting domestic industries has caused harm to the collective environment at the benefit of a few greedy producers.

In addition, other countries which have already ceased production of CFCs, have elected to produce substitutes in their place. Unfortunately, these substitutes, aimed at allowing companies to stay in business, still have adverse effects on the environment--in fact, more of an effect than was originally predicted. Instead of protecting the environment, the international treaty has caused greater harm, and sped up the process of ozone destruction.

III. Geographic Clusters

9. Geographic Locations

10. Sub-National Factors: NO

11. Type of Habitat: TEMPerate

IV. Trade Clusters

12. Type of Measure: Export Ban [EXBAN]

13. Direct v. Indirect Impacts: DIRect

14. Relation of Trade Measure to Environmental Impact

a. Directly Related to Product: YES CFC

b. Indirectly Related to Product: NO

c. Not Related to Product: NO

d. Related to Process: YES OZONE LOSS

15. Trade Product Identification: CFC

16. Economic Data

17. Impact of Trade Restriction: BAN

18. Industry Sector: Chemicals [CHEM]

19. Exporters and Importers: RUSSIA AND USA

V. Environment Clusters

20. Environmental Problem Type: Ozone Loss [OZONE]

21. Name, Type, and Diversity of Species: MANY

22. Resource Impact and Effect: PRODUCT AND MEDIUM

23. Urgency and Lifetime: HIGH AND HUNDREDS OF YEARS

"At a United Nations Environment Program-sponsored colloquium, numerous scientists expressed fears that their previously predicted time frames for peak ozone layer depletion, and for the decline of chlorine and bromine loading in the stratosphere below danger levels, may be wrong. The basis of their concerns were the continued non-compliance of Russia, which is producing CFCs long after it was due to have halted this practice, and excess consumption of CFCs by developing countries. "⁷

In 1994, scientific experts predicted that ozone depletetion would reach its height by the end of the century and finally return to a safe level in approximately 50 years (2045).⁸ However, in 1997, the predicted level of CFC production was exceeded by 200 percent, or about 50, 000 tons. Now experts are saying that the hole in the ozone could continue to grow for four years longer than first expected which means that for up to 80 years the earth will be subject to harmful doses of UV-B radiation.⁹

24. Substitutes: Synthetic [SYNTH]

HCFCs: Hydro-chlorofluorocarbons are less destructive than CFCs, but they also contribute to ozone-depletion; just at a lower rate. The U.S. has been using HCFCs to replace the banned CFCs, though they are now receiving strong pressure from the European Community (EU) to phase them out early in the next century.
Methyl Bromide Methyl bromide is used as a pesticide, and though it is not a substitute for CFCs, it is also classified as an ozone-depleting substance. In contrast to HCFCs, the U.S. is pushing to get methyl bromide banned by 2001, to the consternation of the EU. ¹⁰

VI. Other Factors

(1) www.ozone.org/deplete.html
(2) Jonathon Porritt, "Outdoors: How to stop the smugglers killing our children," The Daily Telegraph (September 20, 1997, p. 16).
(3) Mark Abley, "Agency uncovers CFC Black Market," The Gazette (September 10, 1997, p. A4).
(4) Joby Warrick, "CFC Smuggling, Production, Cool Optimism; Continued Demand, Defiance of Ban may delay mending of earth's ozone 'hole' for decades," The Washington Post (September 16, 1997, p. A3).
(5) www.ozone.org/page12.html
(6) Jonathon Porritt, p. 16.
(7) www.ozone.org/deplete.html
(8)Report on the ninth meeting of parties to the Montreal Protocol, September 15-17, 1997.
(9) Ibid and Joby Warrick, p. 1 of 3.
(10) Joby Warrick, p. 2 of 3.

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