Some background to letter from Exec. Secretary of Montreal Protocol Christiana Figueres March 2007

Basic Facts Most ozone depleting substances have been phased out or are in the process HCFCs main remaining ODS –Intermediate substance –later timetable for developing countries HCFC22 widely used refrigerant in developing countries (not in A1) –HFC23 is by product of HCFC22 production –GWP of HFC23 = 11,700

Developing countries –HCFCs freeze Jan 2016 at 2015 baseline –Elimination 2040 –Schedule set in 1990 (before CDM and accelerated growth of developing countries) Concerns –2015 baseline is incentive to continue to increase consumption (consumption=production + imports - exports) –CDM promotes HCFC22 consumption Unexpected damage to ozone layer –Phaseout costs may exceed Multilateral Fund possibilities

CDM Effect (levels are indicative)

Seven proposals for MOP19 in Sept ‘07 Options –Lower baseline (e.g instead of 2015) –Accelerate the phase out (e.g instead of 2040) –Channel effect of CDM

Option 1: Lower the baseline to 2010

Option 2: Accelerate the phase out to 2030

Option 3: Channel the effect of CDM New plants allowed, third party gets CERs, revenue used for environmental activities.

Tech and Ec Assess Panel (TEAP) is requested to analyze scenarios Request to EB –Info on volumes of HFC23 expected on the market –Info on CER price expectations –Collaboration with Ozone Secretariat