COMMENTS ON THE
ADVANCE NOTICE OF PROPOSED RULEMAKING
"OZONE - DEPLETING CHLOROFLUOROCARBONS
PROPOSED PRODUCTION RESTRICTION"
BY THE
ENVIRONMENTAL PROTECTION AGENCY
(FEDERAL REGISTER; VOL. 45, NO. 196 -
TUESDAY, OCTOBER 7, 1980, PAGES 66726-66734;
EPA [OPTS-62009 (TSW-FRL 1606-5)]
SUBMITTED BY
E. I. DU PONT DE NEMOURS & COMPANY (INC.)
WILMINGTON, DELAWARE
JANUARY 5, 1981
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PREFACE
On October 1, 1980, the United States Environmental
Protection Agency (EPA) published an Advance Notice of Proposed
Rulemaking (ANPR) titled, "Ozone - Depleting Chlorofluorocarbons:
Proposed Production Restriction" (45 Federal Register 66726-
66734). EPA requested submission of comments. E. I. du Pont de
Nemours & Company (Du Pont) manufactures and markets chloro-
fluorocarbons (CFCs) under the trademark "Freon". Du Pont herein
presents comments for the record on:
Inappropriateness
or use of CFCs at
of restricting
this time.
domestic production
Infeasibility and impact of. implementing CFC
controls as proposed.
Questions or requests for additional
clarification may be addressed to:
information or
Paul W. Halter
Environmental Manager
"Freon" Products Division
E. I. du Pont de Nemours & Company
Wilmington, Delaware 19898
(302/774-6484)
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Table of Contents
and Conclusions
PREFACE
EXECUTIVE SUMMARY
A. Problem Background
B. Du Pont Assessment
C. Du Pont Position
D. Problems with EPA's Approach to Issue
E. Recommendations for Action by EPA
I. INTRODUCTION
II. CHLOROFLUOROCARBON USES AND ESSENTIALITY
A. Introduction
B. Refrigeration and Air-Conditioning
1. Description of Use
2. Essentiality and Benefits
3. Alternatives and Limitations
C. Mobile Air-Conditioning
1. Description of Use
2. Essentiality and Benefits
3. Alternatives and Limitations
D. Solvents
1. Description of U.se
2. Essentiality and Benefits
3. Alternatives and Limitations
E. Blowing Agent for Rigid Polyurethane Foam
1. Description of Use
2. Essentiality and Benefits
3. Alternatives and Limitations
F. Blowing Agent for Flexible Polyurethane Foam
1. Description of Use
2. Essentiality and Benefits
3. Alternatives and Limitations
ES-1-37
3
8
23
27
31
1-1-9
II-1-45
2
4
4
4
5
7
7
B
10
10
11
12
13
13
15
16
17
17
18
19
11
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Table of Contents
Paqe
II. CHLOROFLUOROCARBON USES AND ESSENTIALITY (CON'T)
G. Blowing Agent for Polystyrene, Polyethylene
and Phenolic Foam 21
1. Description of Use 21
2. Essentiality and Benefits 22
3. Alternatives and Limitations 23
H. Food Freezant 24
1. Description of Use 24
2. Essentiality and Benefits 24
3. Alternatives and Limitations 25
I. Sterilant Gas 28
1. Description of Use 28
2. Essentiality and Benefits 29
3. Alternatives and Limitations 30
J. Intermediate for Fluoropolymer Production 32
1. Description of Use 32
2. Essentiality and Benefits 32
3. Alternatives and Limitations 34
K. Chlorofluorocarbons and Energy Conservation 36
1. Summary 36
2. General Conclusions and Methodology 39
3. Specific Applications 41
4. U.S. Department of Energy Standards 42
L. Summary 44
III. LEGAL ISSUES III-1-45
A. Introduction 2
B. Authority to Regulate 4
1. Findings to Support Regulation May Not
Be Made 4
2. International Concerns 10
3. Scope of Proposed Regulation 14
4. Regulatory Focus 16
111
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Table of Contents
Paqe
III. LEGAL ISSUES (CON'T)
C. Economic Disincentives Regulation 17
1. Authority 19
2. Implementation and Operation 22
a. Direct Allocation 23
b. Auction 24
3. Competitive Impacts 26
D. Rulemaking Procedures 29
1. General-Clean Air Act 29
2. General-Toxic Substances Control Act 30
3. Research 33
4. Economic and Regulatory Impact Analyses 38
a. Clean Air Act 38
b. Toxic Substances Control Act 41
c. Executive Order 12044 42
d. Regulatory Flexibility Act 43
E. Conclusion 45
IV. THE SCIENCE IV-1-63
A. Introduction 2
B. The Chlorofluorocarbon/Ozone Depletion Theory 7
1. General Description of the Theory 7
2. Model Calculations - What They Are;
Why They Are Needed 9
3. Previous Scientific Assessments of the
Theory 10
C. Ozone Measurements and Ozone Trend Analysis 15
1. Overview 15
2. Detail 17
D. EPA's ANPR Assessment of the Theory 22
E. Present Status of the Theory 32
1. Production and Release of CFCs 32
2. Lower Atmospheric (Tropospheric)
Processes 32
IV
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Table of Contents
P1? v-^"'
""""" Page
i
If'SO -
4 til ST., S1" ,-; 7.Yi
WASHIWGTO-j. '
IV. SCIENCE (CON'T)
a. CFC-11 and CFC-12 Lifetimes 33
b. CFC-21 34
c. CFC-22 36
3. Transport to the Upper Atmosphere 36
4. Chemistry in the Lower and Upper
Atmosphere 37
a. Hydroxyl Radical Reactions 39
b. Pressure and Temperature
Dependencies 41
c. Alternative Reaction Products 42
d. Chlorine Nitrate 43
5. Atmospheric Models 44
a. 2-D Calculations 45
b. C02/N20 Effects 46
c. Volcanoes 47
6. Stratospheric Measurements 48
a. Chlorine Species 48
b. Nitrogen Species 50
F. Resolution of Uncertainties 51
1. Atmospheric Measurements 51
2. Modeling 54
3. Chemistry 55
G. Summary 56
V. THE QUESTION OF RISK V-l-64
A. Introduction 2
B. Impact of Uncertainties in the Under-
lying Science of the Theory of Ozone
Depletion on Risk 5
1. Introduction 5
2. Major Current Uncertainty Sources in
the Atmospheric Science . 6
3. Errors Made by EPA In Treatment of
Uncertainties 9
a. EPA Over Relies on the "Key Findings"
of the NAS Report 9
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Table of Contents
Paqe
V. THE QUESTION OF RISK (CON'T)
b. EPA Places Sole Reliance on the NAS
Report 10
c. EPA Does Not Acknowledge Conflict Between
the NAS Report and More Recent Reports 11
d. EPA Relies on an Out-of-Date Report,
While Ignoring Recent Critical Develop-
ments In the Science 13
C. Impact of Uncertainties in the Potential
Effects of Ozone Depletion on Risk 14
1. Introduction 14
2. Human Skin Cancer Effects 18
a. Melanoma Skin Cancer 18
b. Nonmelanoma Skin Cancer 19
3. Natural Variations in Normal Background
Radiation, Its Simulation and Its
Measurement 21
4. Crop Effects 22
5. Marine Effects 24
6. Climatological Effects 25
D. Probability and Timing of Reducing
Uncertainties 27
1. Introduction 27
2. Du Pont/Fluorocarbon Project Panel
Estimates 27
3. SRI Workshop Conclusions 28
4. Conclusion 30
E. Risk In Waiting - Risk Versus Time 32
1. Introduction 32
2. Conclusions from 1980 Du Pont Submission 34
3. Conclusions from University of Maryland
Study 35
4. Conclusions from Systems Control, Inc.
Study ' 37
5. Summary 37
F. Is the Risk Developing As Predicted? 39
1. Introduction 39
2. Opposing Trends 40
3. Reliability of the Theory 41
VI
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Table of Contents
Page
V. THE QUESTION OF RISK (CON'T)
G. Availability and Significance of an Early
Warning System 43
H. The Relationship of the International Aspects
of the Issue to Risk 46
I. Risk Created by Regulation and the Need for
Risk - Risk Comparison 48
J. Approaches Which Are Inappropriate for
Assessment of Risk on the Chlorolfuorocarbon/
Ozone Issue 53
1. Preoccupation with Extreme Future
Extrapolation 54
2. Conviction that Immediate Decisions Are
Necessarily Required, and Are Necessarily
Better than Deferred Decisions 57
3. Excessive Emphasis on Political Action
Over Objective Scientific Decision-Making 59
K. Summary and Conclusions 60
VI. INTERNATIONAL ASPECTS VI-1-37
A. Introduction 2
B. Differences In National Approaches to the Issue 4
C. Illogic and Limitations of U.S. Unilateral
Response 7
1. Proposed U.S. Cap on Production Will Have
Inconsequential Direct Environmental Impact 7
2. Why U.S. Production Cap Will not Result in
EPA's Goal of Worldwide Regulatory Action 9
D. Consequences of U.S. Unilateral Response 13
1. Potential for Counter-Productive Results 13
2. Imbalance Between Costs and Potential
Environmental Benefit 14
3. Loss of Political Option 15
E. Need for a True Global Assessment, Consensus
and Resolution of Issue 17
F. The Leadership Role - Suggestions on How to
Proceed 20
VII
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Table of Contents
Page
VI. INTERNATIONAL ASPECTS (CON'T)
G. International Trade Implications of Proposed
Controls 23
1. Exports 23
a. Inclusion of Exports Under Domestic
Production Cap Would Eliminate Exports 23
b. Restriction of Exports Would Have No
Net Environmental Benefit 24
c. EPA's Defense of Proposed Policy to
Include Exports Under a Domestic
Production Cap is Weak 25
d. EPA Expresses More Concern for Foreign
Exporters to the U.S. Than for U.S.
Exporters to Other Countries 28
2. Imports 29
a. Imports Should Be Treated"the Same as
Exports 29
b. If U.S. Production Is Capped, Imports
Should Be Capped Separately and On the
Same Basis 30
c. Taxing of Imported Finished Goods Made
With CFCs 31
d. Potential for Illegal Imports Has Not
Been Addressed 32
H. Summary 34
VII. ECONOMIC CONSIDERATIONS VII-1-71
A. Introduction 2
B. Economic Significance of Chlorofluorocarbons 4
C. Regulation of Chlorofluorocarbons via
Economic Incentives 10
1. Introduction 10
2. Impact on CFC Prices 12
3. Inflation 19
4. Economic Growth 20
5. Employment 21
6. CFC Substitutes 22
7. Energy 29
8. Financial Markets 30
9. Impact of Uncertainty 31
Vlll
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Table of Contents
VII. ECONOMIC CONSIDERATIONS (CON'T)
D. Regulation of Chlorofluorocarbons via
Command and Control 35
E. Inadequacy of the Rand Report to Support a
Regulatory Decision 37
1. Introduction 37
2. Data Base 40
3. Study Assumptions 43
a. No Regulatory Restriction of
Alternatives 43
b. Discount Rates 43
c. Time Delay of Emissions 44
d. Transfer Payments Not Inflationary 44
e. Scope of Economic Incentives
Regulatory Options 44
f. Legal Issues 45
4. Limitations on Use of Report Findings 46
a. Introduction 46
b. Analytical Conclusions Must Be
Extrapolated With Care 47
c. Regulatory Cost Remains Uncertain 49
d. Criteria for Benchmark Controls Too
Restrictive 49
i. Enforceability 50
ii. Adequacy of Information 50
iii. Immediacy of Emission Reduction 51
e. Designs of Economic Incentives Options
Are Too General 52
f. Transfer Payment Concerns Are Not
Resolved 53
g. Inadequate Attention Is Given to Market
Structure Effects of Regulatory Option
Design 55
5. Needed Further Work 55
a. Consider Mixed Regulatory Options 55
b. Risk Trade-Off Analysis Needed 56
c. Develop Alternative Approach to
Policy Evaluation 56
IX
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Table of Contents
Page
VII. ECONOMIC CONSIDERATIONS (CON'T)
d. Broaden Analysis 57
i. Time-Frame 57
ii. Technical Assessments 58
iii. Design 58
iv. Option Implementation and
Administration 59
v. Legal Issues 60
e. Expand and Add Detail to Economic
Incentives Option Structures 60
F. Miscellaneous ANPR Points Having Economic
Implications 61
1. Choosing a Regulatory Strategy 61
2. Cost/Benefit Analysis 61
3. EPA's Long-Term Regulatory Strategy 63
4. Product/End Use Bans 63
5. Economic Incentives or Disincentives? 64
6. Tax or Surcharge on CFC Use 64
7. Base Year 64
8. Term of Permits 65
9. Direct Allocation of Permits to
Manufacturers 66
10. Direct Allocation of Permits to Users 66
11. Government Auction of Permits 67
G. Summary 69
VIII. THE SEARCH FOR ALTERNATIVES VIII-1-7
A. Introduction 2
B. Criteria for Alternatives 2
C. Scope of Program 4
D. Program Status and Plans 5
E. Timetable 5
F. Summary 7
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IX. CONCLUSIONS AND RECOMMENDATIONS IX-1-18
A. Conclusions 2
B. Recommendations 13
X. APPENDICES
A. Description of Major Pertinent Reports and
Submissions on the Chlorofluorocarbon/Ozone
Issue A-l-13
B. The Du Pont Development Program on the
Alternatives to Commerical Chlorofluorocarbons B-l-15
C. The Energy Consequences of Chlorofluoro-
carbon Regulation (Battelle Report) C-l-28
D. A Comparison of Some of the Principal
Findings of the November 1979 National
Academy of Sciences' Report and the
October 1979 United Kingdom Department
of the Environment's Report D-l-5
E. Chlorofluorocarbons and Ozone - The Science E-l-69
F. Effects of Ozone Depletion
1. Human Skin Cancer; Review by
Professor Frederick Urbach, M.D. F-l (1-199)
2. Measurement and Instrumentation; Review
by Dr. William H. Klein. F-2(l-19)
3. Agricultural Crops; Review by
Professor R. Hilton Biggs. F-3(l-13)
4. Aquatic Ecosystems; Review by
Dr. David M. Damkaer. F-4(l-36)
G. Ranking Compounds by Potential for Ozone
Depletion - "Permit Pounds" G-l-9
H. Scope of Proposed Regulation H-l-13
I. Economic Incentives Regulatory Options 1-1-39
J. Chlorofluorocarbon Production and Emissions J-l-16
XI
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Table of Contents
Page
X. APPENDICES (CON'T)
K. Industry Funded Fluorocarbon Research Program -
Effect of Chlorofluorocarbons on the Atmosphere
(CMA/FPP) K-l-77
L. Uncertainties - Chlorofluorocarbon Effects
and Stratospheric Ozone (SRI Report) L-l-8
XI. BIBLIOGRAPHY XI-1-47
NOTE: The Executive Summary and Sections I-IX appear in
Volume 1.
Section X (Appendices A-F) appear in Volume 2.
Section X (Appendices G-L) and Section XI-Bibliography
appear in Volume 3.
xn
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EXECUTIVE SUMMARY
COMMENTS ON THE
ADVANCE NOTICE OF PROPOSED RULEMAKING
"OZONE-DEPLETING CHLOROFLUOROCARBONS:
PROPOSED PRODUCTION RESTRICTION"
BY THE
ENVIRONMENTAL PROTECTION AGENCY
SUBMITTED BY
E. I. DU PONT DE NEMOURS & COMPANY. (INC.)
WILMINGTON, DELAWARE
JANUARY 5, 1981
ES-1
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EXECUTIVE SUMMARY
Table of Contents
Paqe
A. PROBLEM BACKGROUND 3
B. DU PONT ASSESSMENT AND CONCLUSIONS 8
C. DU PONT POSITION 23
D. PROBLEMS WITH EPA'S APPROACH TO ISSUE 27
E. RECOMMENDATIONS FOR ACTION BY EPA 31
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Executive Summary
Background
EXECUTIVE SUMMARY
A. PROBLEM BACKGROUND
Uses -
Chlorof1uorocarbons or CFCs, also commonly known as
fluorocarbons, are used worldwide because of their safety, energy
efficiency, high stability and performance attributes. Uses
include:
Commercial and residential refrigeration and
air-conditioning.
Automotive air-conditioning.
Expanding agents used to manufacture plastic foams,
including thermal insulating foams.
Cleaning agents for precision electronic and
electrical equipment and also military hardware.
Fireproofing of sterilizing gas for hospital and
industrial use.
Freezing of food.
Intermediate for fluoropolymer production.
Aerosol propellants (although not in the United
States except for a few specific exceptions).
ES-3
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Executive Summary -
Background
CFCs are emitted to the atmosphere at the point of their
use or during the lifetime of products which contain them. Their
inherent stability, so necessary in these uses, also means that
CFCs do not contribute to photochemical oxidant levels in smog, a
major national concern with most volatile organic compounds.
Theory -
In 1974, scientists theorized that because of this
stability in the lower atmosphere (troposphere), essentially all
CFCs emitted eventually diffused unreacted into the upper
atmosphere (stratosphere). In the stratosphere, the CFC
molecules would be subjected to high energy radiation from the
sun and dissociate, liberating chlorine atoms from the molecules.
A compound known to occur naturally in trace amounts in
the stratosphere is ozone (CO , a form of oxygen. Ozone is
generated in the stratosphere from the interaction of sunlight
and oxygen. This ozone serves the important function of limiting
the amount of solar ultra-violet (UV) light which penetrates to
the earth's surface.
Several natural processes are thought to convert ozone
back to oxygen. Chlorine has been suggested as a contributor to
one of these processes. The theoretical concern over CFCs is
that chlorine liberated from the photodissociation of CFCs may
add to the natural chlorine in the stratosphere, and hence result
in a lowering or depletion of the natural balance of ozone, thus
allowing more UV to penetrate to ground level.
The underlying concern is that a large increase in UV
could increase the incidence of skin cancer, affect the produc-
tivity of crops and marine life and, conceiveably, alter the
climate.
ES-4
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Executive Summary -
Background
It is important to note that these changes were
theorized to occur gradually over a 70-100 year period, presuming
that CFC emissions continued at a constant rate worldwide.
Industry Position -
From the theory's inception, industry has maintained:
The theory warrants serious concern and should be
investigated,
Scientific measurements and evaluations -- not
hypothesis should decide the issue,
Experimental evidence can be obtained to
quantitatively verify or disprove the theory, and
There is time to perform these necessary experiments
without undue risk to the health and welfare of
society or the world's ecosystems.
To these ends, industry launched a major research effort
to prove or disprove the theory. Other research efforts were
initiated by various government bodies.
Global Realities -
Also from the inception it has been clear that due to
the widespread global use of CFCs, any effective solution to the
theorized problem would have to be premised on two global
political realities:
The potential problem of future depletion of ozone
by CFC emissions is global in nature, requiring
global assessment and coordinated action, and
ES-5
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Executive Summary -
Background
Such global action as may be appropriate will not
occur until and unless there is a proper global
resolution of the status of the underlying science,
the quantitative validity of the theory, and the
related risks.
EPA Action -
In response to the theory, the United States
Environmental Protection Agency (EPA), in conjunction with the
Consumer Product Safety Commission (CPSC) and the Food and Drug
Administration (FDA), essentially banned in 1978 all domestic use
of CFCs as aerosol propellants. Prior to the initiation of this
regulatory process, this use of CFCs accounted for approximately
half of U.S. CFC production. As a consequence of this ban, the
U.S. share of total world CFC production has fallen from
approximately 50 percent down to approximately 37 percent.
World Action -
In spite of major political efforts by EPA to convince
other countries to impose like bans, to date only Canada, Sweden
and Norway have followed suit. None of these countries was a
major producer of CFCs. More recently, the European Economic
Community (EEC) agreed to a 30 percent reduction (from 1976
levels) in the use of CFC aerosol propellants to be effected by
1982. However, to date rto country in the world except the United
States has proposed to regulate the non-aerosol uses of CFCs.
Recent EPA Action -
On October 7, 1980, EPA issued an Advance Notice of
Proposed Rulemaking (ANPR) in which it proposes to further
regulate domestic production and use of CFCs by imposing a cap on
ES-5
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Executive Summary -
Background
total CFC production at current levels, regardless of product or
application. (In April, 1980, EPA had announced its intent to
propose such a regulation as the first step in an eventual
planned phase-down of 50 to 70 percent in world CFC production).
EPA's stated preference is for the cap to be implemented
through some yet to be determined system of production or use
allocation or auction. It is then stated that this artificial
supply limitation would cause prices to increase, thus creating
an economic incentive to use substitutes in place of CFCs or to
force CFC users to better conserve CFCs during their use. The
Agency acknowledges that such an action would not have any
significant impact per se^ on either U.S. or world emissions of
CFCs but the action is justified on the basis that it will
achieve the Agency's goal of stimulating international
cooperation, and will enable EPA to retain leadership on the
issue.
It is against this scientific and political background
that the Du Pont Company submits its comments on EPA's ANPR on
CFCs.
EG-7
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Executive Summary -
Assessment & Conclusions
B. DU PONT ASSESSMENT AND CONCLUSIONS
In response to the ANPR, the Du Pont Company has
reviewed the status of the Chlorofluorocarbon (CFC)/Ozone
Depletion Theory, its implications, and the array of options
available to industry and government. Upon completion of this
review, we reassessed our position and program, and the position,
program and plans of EPA. We conclude:
1. There remains no scientific justification for any
further regulation of CFCs at this time.
2. A unilateral approach to a solution of the CFC/Ozone
Issue through domestic regulation, without an
international consensus, is seriously flawed.
3. Continuing assessment of the science and surveillance of
the ozone layer is the only sensible option open to the
world's governments.
4. EPA has done inadequate work to support its regulatory
proposals and to apprise the public of exactly what its
proposals are.
5. The proposed economic incentives regulatory options have
many serious problems.
6. EPA has not provided sufficient evidence to support a
conclusion that continued release of CFCs represent an
unreasonable risk to human health and the environment;
nor that the potential environmental benefit of the
proposed regulation is justified by the risk and cost of
such regulation.
ES-8
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Executive Summary -
Assessment & Conclusions
Findings leading to these overview conclusions are
discussed in depth in the body of the submission. A summary of
key points follows:
1. There remains no scientific justification for any fur-
ther regulation of CFCs at this time.
The CFG/Ozone Depletion Theory remains an unverified
theory. There is major disagreement within the
world's scientific community as to the validity of
the theory. There remain numerous discrepancies
between what is assumed, estimated, and predicted in
the theory and actual atmospheric measurements.
Analysis of actual measurements of stratospheric
ozone concentration over the last 20 years,
(analysis sensitive to an approximate change in
concentration of plus or minus 1 to 1.5 percent)
does not detect any depletion of ozone -- in sharp
contrast to predictions (based on computer model
calculations) made in 1979 by the National Academy
of Sciences (upon which EPA relies) that over 2
percent depletion of the ozone has already occurred.
One may conclude from this key discrepancy that
either:
i. The theory is wrong in that it signifi-
cantly overstates potential depletion of
ozone by CFCs, or
ii. There is an equal and offsetting positive
effect on ozone generation.
ES-9
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Executive Summary -
Assessment & Conclusions
In either case, ozone is not exhibiting a net
decrease as predicted.
This technique of analysis of ozone concentrations,
called "time-trend analysis" is sufficiently
sensitive to serve as an early warning system of any
developing problem. Under this umbrella, the
research programs needed to resolve the key
discrepancies between theory and measurement, and to
reduce the key uncertainties, can be allowed to
proceed with confidence that their continuance in
the absense of further regulation does not result in
undue risk.
Most of these needed research efforts already are
underway. Many are specifically targeted to resolve
key uncertainties and discrepancies.
Even if these studies should confirm that the theory
is quantitatively accurate, the risk in waiting for
these results is small. As an example, the maximum
calculated long-term incremental change in depletion
from a 5-year U.S. regulatory postponement would,
even in the extreme case of a ban, be approximately
only 0.2 percent. This should be compared to the
known natural variations in stratospheric ozone of
approximately 10 percent occurring over periods of a
decade or so.
EPA cites as its justification for further regula-
tion a 1979 report by the National Academy of
Sciences (WAS). There are serious discrepancies
between this report and other reports issued imme-
diately prior to, and subsequent to, the WAS report.
Further, EPA does not incorporate recent develop-
ES-10
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Executive Summary -
Assessment & Conclusions
ments in the science in its assessment develop-
ments which render portions of the NAS report
incorrect and reduce the NAS predicted depletion
numbers by approximately one-half. In addition, EPA
continues to ignore the utility of ozone time-trend
analysis as an early warning system without making
any attempt to formally assess the technique in
light of recent rapid advances.
2. A unilateral approach to the CFC/Ozone Issue through
domestic regulation, without an international consensus,
is seriously flawed.
The United States produces and uses more CFC than
any other single country, yet the U.S. share is
approximately only one-third of world CFC
production. The problem, if it exists, is global in
nature. Thus, no country can solve the potential
problem through unilateral regulation.
Other countries generally have not regulated CFCs at
all, or have employed restrictions on aerosol uses
that are much less stringent than U.S. measures, due
to their assessments that serious questions exist on
the validity of the ozone depletion theory and that
most of these questions can be resolved without
serious risk to human health or the environment.
EPA's strategy of obtaining worldwide regulation of
CFCs through the setting of a U.S. regulatory
example is ill-conceived and doomed to failure. The
underlying disagreement on this issue between
countries of the world is over the validity of the
theory. More information and objective, shared
ES-11
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Executive Summary -
Assessment & Conclusions
assessments of the science are needed to resolve
this disagreement before a world consensus and a
solution can be forged. Regulatory example-setting
by EPA will not advance this goal. Such action
relies on political effort, not scientific facts.
There is rio evidence to support EPA's conclusion
that its unilateral proposals will meet its stated
goal of a world major phasedown of CFC uses. In
light of the failure of the 1978 U.S. aerosol pro-
pellant ban to stimulate significant action abroad
of equivalent scope, it is difficult to see how
further U.S. regulation will meet with any greater
success.
Further, a unilateral cap on U.S. production will
not per ^£ have a significant potential environ-
mental benefit to the U.S. or the world should the
theory prove to be valid, but will have a large
negative impact on the U.S. economy. In short, no
one potentially gains but the United States pays.
3. Continuing assessment of the science and surveillance of
the ozone layer is the only sensible option open to the
world's governments
Given:
the great scientific uncertainties and discrepancies
between theory and measurement,
that research programs are underway to resolve these
uncertainties and discrepancies,
the low risk in waiting for this needed resolution,
ES-12
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Executive Summary -
Assessment & Conclusions
the existence of ah early warning system for any
developing problem,
the need for, but lack of, an international resolu-
tion on this issue, and
the very questionable utility of EPA's excessively
political approach to obtaining this resolution,
we believe that a strategy of diligent testing and
assessment, coupled with constant surveillance, and
prompt action if a problem is found to be developing, is
the only supportable policy available. We do not
propose that the world's governments wait until actual
human or environmental harm occurs or is determined to
be inevitable.
4. EPA has done inadequate work to support its regulatory
proposals and to apprise the public of exactly what its
proposals are
The potential risks created from restricting CFC
availability, resulting in use of currently
available CFC substitutes, have not been addressed
by EPA.
In comparison to currently available alternatives or
substitutes, CFCs have the more desirable combina-
tion of characteristics: safety (nonflammability,
low toxicity)y energy efficiency, material compat-
ability and value-in-use. EPA does not propose to
eliminate major segments of U.S. industry, such as
refrigeration. Therefore, it must evaluate the
availability of substitutes and what the risks,
costs, etc., of these substitutes will be.
ES-13
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Executive Summary -
Assessment & Conclusions
Any proper regulation must balance the potential
risks which the regulation is projected to reduce
versus the risks which such regulation would create,
e.g., the risks from forced use of substitute pro-
ducts or processes.
The low potential for future availability of safe
alternatives for CFCs has not been addressed.
It has been more difficult to develop suitable
alternatives for the current commercial CFCs than
initially believed. Such compounds, meeting EPA's
standards of environmental acceptability and
industry's standards of safety, utility, and cost,
ji_f available aj; all, are at best 7-10 years away
from commercialization.
EPA has not assessed the energy consequence of its
proposed regulation, neither restriction on current
CFC uses nor what would be sacrificed from
unavailability of CFCs for new uses.
EPA has prematurely concluded that economic incen-
tives regulatory options are preferable. The
reasons given for the stated preference are based on
theoretical economic relationships and projected
responses. But EPA's preference is not based on
detailed assessments of the impacts of these options
on the actual producers and consumers of CFCs and
CFC-dependent goods. Additionally, the primary
ES-14
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Executive Summary -
Assessment & Conclusions
competing option, emission reduction, has not been
adequately assessed, either technically or
economically.
The Rand study cited by EPA in support of its pre-
ference is not an adequate work on which to base a
decision. The study is deficient opposite the use
to which it is being put by EPA because it a) is
based on an obsolete data base, b) does not include
all CFCs being proposed for regulation, c) does not
assess all uses of CFCs which would be impacted by
the proposed regulation, and d) only compares
regulatory options under artificial study para-
meters, several of which were selected to meet
budget and time constraints on the study. However,
most importantly, the Rand study is an empirical
comparison of regulatory options under artificially
bounded study conditions; not an economic impact
study of the consequences of the options being
applied to the real world uses of CFCs (all CFCs,
all uses).
The economic incentives regulatory options proposed
by EPA are not adequately developed. Only the
theory and skeletal structures are presented. No
"how to's" are suggested. Left unanswered are
questions on "How would the options be put in
place?" and "How would they work?". The Agency has
not yet done its homework on these concepts.
Industry's ability to provide meaningful comment is
severely constrained until such time as it is
apparent what exactly is to be commented on.
No determination has been made on the impact of the
production cap proposal. No determination has been
ES-15
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Executive Summary -
Assessment & Conclusions
made on which specific CFC-dependent end products
and services would be impacted by the proposal, what
the cost would be, or whether such cost could be
justified by the potential environmental benefit to
the ozone layer of giving up or curtailing these
specific products or services. There has been no
quantification of these trade-offs.
5. The proposed economic incentives regulatory options have
many serious problems
There are substantial questions concerning the
authority of EPA to promulgate a regulation per-
mitting it to auction permits for the right to use
or produce CFCs. Such a system would result in
revenue generation by EPA, an authority vested in
the Congress.
Both auction and allocation of use or production
rights under a production limitation would create
complicated economic problems. In addition, anti-
competitive concerns created by these options cannot
be ignored.
Any system of redistribution of limited resources,
particularly if done more than once, e.g., by yearly
auction, will create tremendous uncertainty on the
part of both producers and users. Business cannot
plan or operate effectively under uncertainty of
this magnitude.
To reduce or eliminate this uncertainty many
businesses will attempt to do one of two things: 1)
hoard permits to insure supply or 2) precipitously
eliminate CFCs from their product lines. Both
ES-16
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Executive Summary -
Assessment & Conclusions
actions will have adverse consequences
consequences not addressed to date by EPA. Hoarding
will create shortages elsewhere, possibly in some
"essential" use areas. Precipitous phaseout of CFCs
will result in performance problems, possible end-
product shortages, loss of jobs, and an increase in
industrial and consumer risk from exposure to less
safe alternatives. The consequences of both actions
will mean significantly more economic impact than
the smooth transition case presumed by EPA.
It cannot be stressed enough that the economic
incentives implementation schemes, in concert with a
production cap, have the potential for creating
massive uncertainty, which in turn will result in
major unaddressed impacts.
EPA seems to assume that ownership of production or
use rights should be in its hands. For all the
discussion about economic incentives options
allowing the free market to operate, such schemes
represent more, not less, government intrusion into
the marketplace. EPA ownership means that the
distribution of production and use evolved over the
years would be disassembled, to be replaced by the
imposition of a new distribution system controlled
by government, with unknown consequences.
Unilateral imposition of a production cap will have
negative impacts on U.S. industry and the balance of
trade.
Higher prices created by the unilateral U.S.
restriction will reduce the competitiveness of U.S.
CFCs and CFC-dependent products abroad, but will
ES-17
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Executive Summary -
Assessment & Conclusions
have no net environmental benefit. This is because
U.S. regulation will have no impact on demand
abroad, only on the ability of U.S. industry to meet
this demand competitively. What U.S. companies lose
will be gained by foreign companies.
The control of imports as proposed is equally
inequitable as foreign firms would have an unfair
advantage in the domestic marketplace. This is
because they would be competing from an unrestricted
production base opposite domestic producers, thus
giving them an unfair cost advantage.
EPA's system of permit pounds is inaccurate. A
correct evaluation of "potential environmental risk"
or "depletion potential" for a CFC (according to the
theory) must include weight percent chlorine and the
altitude at which chlorine is released to the
atmosphere.
Below we compare EPA's relative permit pound ranking
to a correctly developed ranking:
EPA Du Pont
CFC-11 1.0 1.00
CFC-12 1.27 1.19
CFC-113 1.30 1.22
CFC-114 2.04 1.64
CFC-115 5.00 2.86
CFC-22 5.56 34.00
ES-18
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Executive Summary -
Assessment & Conclusions
This means that it would take approximately 34
pounds of CFC-22 to equal the potential environ-
mental concern of 1 pound of CFC-11, not the roughly
6:1 ratio presented by EPA.
The inclusion of CFC-22 in the proposed cap is
unjustified and counterproductive. EPA does not
have studies or data to support any finding of
environmental risk from the use of CFC-22. The fact
is that its potential risk factor and its total
production makes it less of a potential or theoret-
ical problem to the ozone than other compounds, such
as methyl chloroform, which are not addressed by
EPA. Further, to the extent that CFC-22 represents
one of the solutions to the potential problem of
release of more environmentally suspect CFCs, its
inclusion under the proposed restriction is
counterproductive. Conversion from CFC-12 to CFC-22
will be restricted by the inclusion of CFC-22 under
the regulation due to the attendant business
uncertainties.
It is the emission of CFCs that should be of con-
cern, not the use. The use of CFCs cannot possibly
impact on stratospheric ozone, only emissions to the
atmosphere. Consequently, uses of CFCs resulting in
no emissions must be exempted. The use of CFC-22 as
a raw material for the production of fluoropolymers
is a prime example.
EPA illogically makes no exemption for such non-
emitting CFC uses in its regulatory proposals.
ES-19
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Executive Summary -
Assessment & Conclusions
EPA has not provided sufficient evidence to support a
conclusion that continued release of all CFCs represents
an unreasonable risk to human health and the environment
nor that the potential environmental benefit of the
proposed regulation is justified by the risk and cost of
such regulation.
There is no evidence that ozone is being depleted as
predicted.
EPA incorrectly bases its case on the theoretical
impact of CFCs exclusive of other factors. EPA does
not address other potential depleters of ozone, such
as methyl chloroform nor, more importantly, the
potential off-setting effect of C02 releases. EPA
does not demonstrate that the theorized risk from
CFC emissions can justifiably be considered in
isolation from other competing risks, or from
off-setting factors which reduce net risk to the
environment.
EPA presents an "either-or" choice of regulating now
or waiting for some distant future date at which
time it will be too late to stave off harm if the
theory should prove to be valid. However, research
programs targeted at the remaining key uncertainties
and discrepancies are underway. And this research
can be done under the umbrella of an existing early
warning system ozone time-trend analysis. EPA
has not addressed the incremental risk in waiting
for these research results in conjunction with the
use of the early warning system.
ES-20
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Executive Summary -
Assessment & Conclusions
A related point is that EPA has not quantified the
theorized benefit of regulating now versus deferral,
again in conjunction with the existing early warning
system.
EPA has not demonstrated that there would be any
significant environmental benefit, per se from its
proposed unilateral restrictions. Further, no
support is offered for EPA's proposition that
further unilateral regulation of CFCs by the U.S.
will achieve EPA's goal of a world phaseout of CFCs,
nor is any probability of success given. The law
supports regulation by EPA if there is an environ-
mental benefit not to set an example with the
unsupportable expectation that other countries will
then "see the light" and respond with their own
regulations.
EPA has not studied how the individual uses of each
of the CFCs would be affected by the proposed rule
how much would emissions be reduced?, to what
degree would this potentially benefit the
environment?, would the cost be justified by this
incremental environmental benefit?, and would this
reduction in risk be justified by the increase in
risks incurred through the use of substitute
products and processes?
EPA proposes regulating all CFCs, yet only CFC-11
and CFC-12 have been studied to any extent. The
potential impact on the ozone of CFC-113, CFC-114,
CFC-115 and CFC-22 has not been adequately studied
or assessed. These latter CFCs should be studied,
not only to determine if they are of potential risk
to the environment (and if so to what degree), but
ES-21
-------
Executive Summary -
Assessment & Conclusions
also to determine to what extent they could contri-
bute to a solution should evidence show that CFC-11
and CFC-12 are depleting stratospheric ozone.
ES-22
-------
Executive Summary
Du Pont Position
C. DU PONT POSITION
Given the preceding conclusions, it is the position of
the Du Pont Company that:
Time-trend analysis of actual ozone measurements
provides an early warning system for any developing
problem with stratospheric ozone. It should be
immediately adopted and efforts undertaken to refine
the technique even further. The existence of this
system permits deferring any further regulation
while the needed remaining research is performed.
Regulation should be based on scientific facts, not
unconfirmed theory. Imperfect computer calcula-
tions, premised on numerous questionable assump-
tions, many in conflict with actual measurements,
are not an adequate basis on which to undertake
major regulation.
The key uncertainties and discrepancies surrounding
the theory can be resolved with very low potential
risk to health or the environment. Regardless of
the results from ozone trend analysis, major
research efforts should continue to resolve the
underlying science definitively. Du Pont wilj,
continue to support these efforts.
As the potential problem of ozone depletion is
global, solutions must be global. Global solutions
hinge on objective global assessment and resolution
of the science. Maximum effort should be given to
^obtaining such assessment rather than the political
efforts being made by EPA. Further unilateral U.S.
ES-23
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Executive Summary
Du Pont Position
regulation as proposed by EPA will not help obtain
the needed global assessment and resolution.
The United States already has taken actions far
beyond those of other major industrialized nations.
Further unilateral regulation as proposed by EPA
will be exceedingly costly and unfair to U.S.
industry and consumers, but will not have any major
potential environmental benefit for the U.S. or for
the world.
Therefore, absent the demonstration of any risk,
especially any meaningful short-term risk, absent a
resolution of the science leading to a confirmation
that CFCs will deplete stratospheric ozone to an
extent harmful to public health and the environment,
and absent an international resolution of what
restrictions, if any, are appropriate, there should
be no further regulation of CFCs.
In the face of these conditions, if EPA continues to
proceed with a regulatory program on CFCs, there
should be a Congressional Oversight Hearing on the
entire issue and EPA's actions.
After a proper resolution of the science, should
regulatory restrictions prove necessary to protect
stratospheric ozone, such regulation should focus on
the net change to ozone from all anthropogenic
causes, not on just one potential perturbation in
isolation.
Should further regulation be necessary, it should be
limited to CFC-11 and CFC-12 (approximately 90
percent of the theorized problem), thus allowing
ES-24
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Executive Summary
Du Pont Position
less potentially harmful CFCs, such as CFC-22, to
contribute to the solution through their use as
alternatives.
Should further U.S. restrictions on CFCs prove
necessary, they should be based on a balanced
assessment of risk and benefit from CFC use, and on
the risk of continued CFC use versus the risk from
the use of available alternative products and
processes.
Any further regulations determined to be necessary
should consider the energy impact of reduced
availability of CFCs.
Any further regulation should consider that,
excepting other currently available CFCs, there are
no suitable, safe alternatives for most CFC uses at
this time.
Du Font's program to develop suitable commercially
viable fluorocarbon alternatives is continuing but
we are no longer optimistic of success.
Should any further U.S. regulation of CFCs prove
necessary, the regulation should be reviewed
opposite the ongoing justification on a prescribed
periodic basis.
The economic incentives regulatory proposals
currently advanced by EPA are not well thought-out.
There are significant problems in the areas of
legality, economic impact, and balance of trade
which must be addressed. Performing an untried
regulatory experiment on such an important industry,
-------
Executive Summary
Du Pont Position
absent the necessary thorough thought and analysis,
is unwise.
The ability of industry to provide meaningful
comment on EPA's economic incentives proposals is
limited by EPA's failure to present a description of
how these concepts would specifically be designed
and applied, and how they would function.
Any further consideration of a production cap in
conjunction with production or use allocation or
auction of permits should provide for: 1) exemptions
for non-emitting uses (such as intermediates for
production of fluoropolymers), 2) exemption for
exports, 3) a restriction on imports parallel to
domestic restriction, 4) a minimum of 10 years
advance notice of allocation system change to reduce
uncertainty, 5) yearly reviews of the effectiveness
of the cap as a control measure, both environmen-
tally and economically, 6) yearly reviews of the
justification for the level of the cap based on the
most recent depletion measurements and model
calculations, and 7) a clear statement of the
guidelines to be used to decrease oj: increase the
permissible production level.
ES-26
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Executive Summary -
Problems with EPA's
Approach
D. PROBLEMS WITH EPA'S APPROACH TO ISSUE
EPA has limited its assessment of atmospheric
science to one report [NAS, 1979a] , and has not
considered other reviews, for example the United
Kingdom Department of the Environment's report [UK
DOE, 1979] or the European Economic Community
Council's report [EEC, 1980] which reach conclusions
at variance with NAS.
EPA's ANPR assessment of the science does not
include developments since the 1979 NAS report
developments which cut the NAS predicted future
depletion estimate in half. Scientific knowledge
relevant to this issue is changing rapidly. Yet EPA
indicates no plans for updating its assessment of
the science or for arranging for periodic reviews by
qualified outside bodies such as NAS. Major efforts
should be made to include current information in the
decision-making process and to review periodically
such decisions opposite ongoing developments.
Ozone depletion, should it occur, would be a global
problem requiring a global response. Such response
has not occurred due to scientific assessments by
other nations that the problem does not warrant
regulatory response at this time. Therefore, the
key need is for a global assessment and resolution
of the science leading to a global response policy.
However, EPA seems to be concentrating on advancing
ES-27
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Executive Summary -
Problems with EPA's
Approach"
its views through unilateral regulation, rather than
working to meet the underlying need for inter-
national scientific assessment.
EPA consistently focuses on an extreme worst case
scenario. This focus grossly overstates the
potential risk involved in continued emissions of
CFCs. The worst case scenario has no reasonable
probability because it would require business to
operate as if there were no environmental or
regulatory concern. Further, this scenario ignores
recent CFC production history, and ignores the
effect of CFC aerosol phase-downs now occurring in
Europe.
A further problem with EPA's treatment is the
failure to assign any ranking or probability to the
scenarios. Worst case scenarios are treated with
equal (and in some cases higher) emphasis than the
most probable scenarios indicated by the facts and
common sense. In EPA's treatment, uncertainties are
ignored and low probabilities become "fact".
The problem is theorized to evolve gradually over
70-100 years. However, EPA limits its discussion to
an "either-or" choice either action must be taken
now or we will have to suffer the consequences of
major ozone depletion. This "either-or" choice
ignores the facts that: 1) time-trend analysis of
ozone measurements already is available as an early
warning system, 2) no ozone depletion has been
detected to date, and 3) even if the theory should
ES-28
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Executive Summary -
Problems with EPA's
ApproacE
prove to be quantitatively correct, a regulatory
deferral of even five years would not result in a
significant incremental increase in risk.
EPA has not yet addressed the risks associated with
a limitation on the availability of CFCs, for
example, the flammability and toxicity of the
available non-CFC alternatives which would be
forced into use. No attempt has been made to
balance speculative long-term risks from continuing
use of CFCs versus known risks from alternatives.
EPA has not adequately developed the regulatory
options it proposes to use. The theory of economic
incentives options has been presented, but as yet
there has been no fleshing-out of how the options
would look, how they would be implemented or how
they actually would function. The ANPR is the
second time (the Draft Rand Report [Rand, 1979]
being the first) that industry has been asked to
comment specifically on the same non-specific
proposals.
EPA has not adequately assessed the economic impacts
which would result from its proposed restrictions.
The economic work done to date is a limited
comparative study of regulatory options, not an
impact assessment of these options applied to the
real world of CFC production and use (of all pro-
ducts and all applications).
Nor has EPA yet addressed the impact of its pro-
posals on the nation's energy use, present and
future.
ES-29
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Executive Summary -
Problems with EPA's
Approach
The Agency has prematurely decided in favor of
economic incentives options prematurely because
alternative, options, such as emission reduction,
have not been adequately examined by EPA, and
because EPA has not given adequate attention to the
impacts of the economic incentives proposals.
EPA's stated preference for economic incentives
options seems to be based on the Agency* s perception
the options would be easier to design, implement and
enforce; not upon whether the the incentives options
would be better for the affected industries and
consumers. Experimentation on critical industrial
segments of the nation's economy is unwise.
ES-30
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Recommendations for Action
By EPA
E. RECOMMENDATIONS FOR ACTION BY EPA
The following are Du Font's recommendations for actions
to be taken, or at least initiated, by the EPA, which we believe
will lead to a proper resolution of the CFC/Ozone Controversy.
Should this resolution dictate the need for further regulation,
such actions as outlined herein will help ensure a balanced and
cost-effective regulation.
EPA should promptly arrange for an updated assess-
ment of ozone trend analysis by a qualified outside
body, such as the NAS. If an outside review body
cannot be employed, a joint industry/government/
academia symposium should be held to review
objectively the method opposite the questions: How
sensitive is it? What is the confidence range? How
and when can it be further improved? A companion
recommendation would be for EPA to support the
further development of trend analysis.
EPA should arrange for an objective, thorough review
of the science (both the theory itself and effects
of ozone depletion) by an international panel of
qualified scientists. A joint NAS/UK Royal Society
effort would be a logical starting point. Inter-
national political organizations such as the Organi-
zation for Economic Cooperation and Development
(OECD) are not adequate for this assessment due to
the limited participation of scientists and the
political pressures present in such groups.
Even if an international review cannot be promptly
arranged, EPA should recontract with NAS for an
updated review of the science, followed by a yearly
ES-31
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Recommendations for Action
By EPA
reassessment. The predicted problem is a long-term
problem. The science is changing rapidly. Any
regulatory decision based on the science at any
point in time must be reassessed as the scientific
justification for that decision changes.
Between NAS reports, EPA should meet quarterly with
the Chemical Manufacturers Association (CMA)
Fluorocarbon Project Panel (FPP) , and other
appropriate scientific advisors, to stay current
with the broad spectrum of scientific developments.
The Agency needs to publish the parameters of its
decision making on the issue:
i. What specific level of ozone depletion does
EPA consider to pose an unreasonable risk
to health and the environment?
ii. What will it take to convince EPA there is
or is not a serious problem, e.g.,
a. What sensitivity of ozone trend analy-
sis is accepted (and on what basis)?;
What ozone trend analysis results would
be viewed as a significant indication
of a developing problem?
b. What other science developments would
be viewed as significant?
c. What criteria does EPA use to judge the
credibility of sources and reported
developments, and which sources meet
these criteria.
ES-32
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Recommendations for Action
By EPA
d. What will EPA do to ensure staying
abreast of developments?
e. What is the process EPA uses to get
developments assessed and to the
attention of the regulatory decision-
makers?
f. What must happen internationally to
convince EPA of the need or lack of
need for further U.S. regulation? By
whom? In what time period?
iii. How does the specific proposed regulation
result in reduction of risk on this issue
and what is the magnitude of this reduc-
tion? If in the periodic reviews of the
science, it is determined the risk has
decreased significantly, what are the
parameters of regulatory response?
The Agency needs to redefine the problem of ozone
depletion generically and then determine and justify
whether CFCs should be treated in isolation from
other potential depleting compounds and in isolation
from potential ozone increasing compounds. The
charge to EPA of the 1977 Clean Air Act Amendments
is protection of stratospheric ozone, not the
regulation of CFCs. What is the justification for
including CFC-22 under the regulation when methyl
chloroform represents a greater total potential
problem? Conversely, modelers now include the CC^/
ozone augmentation effect. This needs to be
factored into EPA's assessment.
ES-33
-------
Recommendations for Action
By EPA
On the international level, EPA should abandon its
excessively political strategy in favor of an effort
to help obtain the needed global scientific assess-
ment and resolution. The Agency should publish its
plans for furthering the scientific resolution of
this issue.
As pointed out in previous sections, EPA must
complete a significant -body of work before it can
support the proposed regulatory options. Further
assessment and study are needed in the areas of:
i. Emission reduction and alternatives. What
is achieveable, in what time-frame and at
what cost?
ii. Impact of economic incentives options.
What would be the actual impact to industry
and consumers if the options were applied
to all CFCs and all CFC uses as proposed?
iii. Energy penalty of regulations.
iv. Risk from alternatives substituted for
CFCs, and a risk-risk assessment of
continued CFC use versus use of alter-
natives.
v. A detailed fleshing-out of the incentives
options for comment specifying exactly
how they would be structured, how they
would be implemented and how they would
function.
ES-34
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Recommendations for Action
By EPA
We recommend that EPA hold a series of informational
exchange meetings around the country to discuss its
proposals, hear concerns and gather information to
help its studies of i.-iv. above.
EPA needs to employ a more realistic timetable. The
current timetable shows a completion date of Janu-
ary, 1981 for the final draft of the proposed rule.
The ANPR comment period closes January 5, 1981.
Further, we question how EPA can digest and evaluate
ANPR comments and submissions in time to publish a
formal proposed rule in March, 1981. The proposed
timetable appears unrealistic unless EPA has no
interest in the ANPR comments and has already made
up its mind on how to proceed. Given the magnitude
of the issues which remain to be addressed, parti-
cularly on the economic incentives options, we fail
to see how a reasonable proposal can be finalized in
this period. We ask for clarification.
Due to the untried nature of the economic incentives
options, the numerous questions and concerns which
have yet to be answered, and the total lack of
experience with these regulatory options in the real
world, if EPA elects to proceed with their use, we
would strongly urge that a pilot test first be
undertaken. The options should first be applied to
a carefully monitored industry or industry segment,
and the impacts thoroughly evaluated, rather than
immediately applying this theoretical regulatory
approach to the CFC industry which has such broad
and major impacts on the total economy.
ES-35
-------
Recommendations for Action
By EPA
If EPA decides to promulgate a rule, (regardless of
which regulatory option is selected) the Agency
should issue an annual report detailing:
i. Results of actual ozone measurements. Has
depletion been detected? If so, how much
and at what rate?
ii. Computer calculated or estimated ozone
depletion based on best current infor-
mation. What are the current model
calculations?
iii. Status of U.S. versus world regulatory
situation. Has the U.S. regulation
achieved the Agency's goals? Have other
countries followed EPA's lead or is the
U.S. example being ignored?
iv. The continued need for the regulation as
promulgated.
v. The economic impact of the promulgated
regulation, particularly if new regulatory
concepts are involved. This should be
compiled by major market segment and
business size, as well as a summary report.
ES-36
-------
Recommendations for Action
By EPA
vi. The identity of substitutes employed in
place of CFCs by use category. For all
substitutes (and especially new substi-
tutes) safety data, toxicity data, energy
efficiency, development cost of replacement
substances and redesign cost for manufac-
turers should be monitored for a period of
10-20 years to determine the true cost of
regulation for guidance in future rule-
making efforts.
ES-37
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I. INTRODUCTION
1-1
-------
Introduction
In 1974 a theory was advanced [Molina and Rowland, 1974]
that the family of chemical compounds termed chlorofluorocarbons
(CFCs), also commonly known as fluorocarbons, upon their release
into the lower atmosphere (the troposphere), were eventually
transported to the upper atmosphere (the stratosphere), where
they entered into a complex series of reactions which resulted in
the gradual decrease (depletion) of ozone. A decrease in ozone
is expected to result in an increase in solar ultraviolet (UV)
radiation reaching the Earth's surface. Over time, such an
increase in UV is theorized to result in various adverse effects,
including an increase in human skin cancer, possible damage to
certain crops and marine species, and potentially even a small
modification in the climate.
In 1978, the Environmental Protection Agency (EPA),
together with the Consumer Product Safety Commission (CPSC) and
the Food and Drug Administration (FDA) , acting on this theory,
promulgated a rule which prohibited the use of CFCs in aerosol
propellants in all but a few essential applications (43 Federal
Register 11301 ejt seq., March 17, 1978, 40 C.F.R. Subsection 762
e_t seq.) . Although there were many uses of CFCs in the United
States, the aerosol propellant use was singled out because it
represented approximately half of the consumption of CFCs,
resulted in prompt and complete release of the CFCs to the
atmosphere, was generally considered to be a "non-essential" use,
and alternative products were available.
In April of 1980, EPA announced [Jellinek, 1980a; EPA,
1980a] that it intended to proceed with further regulation of
CFCs in the United States.
In October of 1980, EPA published an Advance Notice of
Proposed Rulemaking (ANPR) to outline its regulatory thinking and
to solicit comment on various approaches to regulation of
1-2
-------
Introduction
non-aerosol propellant uses of CFCs (45 Federal Register 66726 et
seq.) . All non-aerosol uses are covered in the proposal
regardless of essentiality of use.
EPA cites as justification for this further regulation
reports released in November and December 1979 by the National
Academy of Sciences [NAS, 1979a; 1979b]. No scientific studies
published more recently than the 1979 reports are cited by EPA or
listed as supportive of the Agency's position.
EPA plans to promulgate CFC regulations under the
authority of Section 157(b) of the Clean Air Act (42 U.S.C.
Subsection 7457) or under Section 6(c)(l) of the Toxic Substances
Control Act (15 U.S.C. Subsection 2605).
In choosing a regulatory strategy for non-aerosol CFC
regulation, EPA stated that a primary concern will be the "effect
the choice [of strategy] will have on other nations' decisions in
this area" [45 Federal Register 66728]. Within this overall
concern, EPA identified three different strategies for regulating
CFCs:
1. Wait-and-See
2. No Growth
3. Substantial Emissions Reduction
Under the Wait-and-See approach, EPA would take no
action until better evidence of the ozone depletion theory is
obtained. EPA rejected this approach because it believes that
were it adopted, the great majority of other producing and using
nations will follow suit. Therefore, they believe that a
domestic strategy of wait-and-see is likely to be equivalent to a
world strategy of wait-and-see (45 Federal Register 66728-66729).
1-3
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Introduction
Under the No Growth scenario, the EPA states that it
would limit CFC production to present levels and would take no
further action until warranted by international conditions or
further evaluation of the credibility of the theory. This
strategy is acceptable to the Agency on a short-term because it
will "convince other nations to agree to concerted international
action" and because it is a "signal to other CFC-producing and
using nations that the United States is concerned enough about
the risks entailed in the depletion of the ozone layer that it is
willing to take serious action on the basis of present
knowledge." On a long-term basis, however, a no growth strategy
is considered unacceptable because it "would still result in an
unacceptable level of risk" (45 Federal Register 66729).
Under the Substantial Emissions Reduction strategy, the
United States would reduce its production to some fraction of the
level predicted to be necessary on a worldwide basis to achieve
an acceptably low level of ozone depletion. As a short-term
option, this strategy was rejected by EPA because "it could
strengthen the Wait-and-See attitude abroad by creating the
impression that other nations could afford to wait before taking
action." However, on a long-term basis, this is considered the
only acceptable option because of the "extreme caution" which
must be exercised on account of the "substantial" evidence that
ozone depletion is occurring (45 Federal Register 66729) .
Du Pont believes that none of the three options above
are truly adequate at this time to deal with the problem of
potential ozone depletion. We reject the wait-and-see approach
because it ignores the fact that CFCs may present a problem and
implies that nothing need be or will be done to learn more about
the potential problem and means of making responsible regulatory
decisions concerning it. And, at this time, we reject both the
1-4
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Introduction
No Growth and Substantial Emissions Reductions alternatives
because both entail costly regulation at a time when the
scientific basis to support regulation is questionable.
Instead, we have identified a fourth option, not
mentioned by EPA, but one which we believe is the only
appropriate one at this time. This option may be called
"Assessment and Surveillance".
Under the Assessment and Surveillance approach, the
research currently being funded by the Chemical Manufacturers
Association Fluorocarbon Project Panel (CMA/FPP), individual CFC
producers, government and others will continue. This research is
directed toward reducing the uncertainties in the ozone depletion
theory, and toward a more accurate and thorough evaluation of the
quantitative validity of the theory. The research is being
conducted under the umbrella of analyses of actual ozone
measurements called ozone time-trend analysis which is
capable of providing the surveillance necessary to warn of any
developing problem in stratospheric ozone levels. The
availability of ozone time-trend analysis as an early warning
system in ozone changes, coupled with periodic reassessments of
the need for regulatory action, provides EPA with an assurance
that regulation of CFCs can be deferred, without unreasonable
risk developing. Should the results of ozone trend analysis or
ensuing research results indicate that ozone is being depleted,
the wisdom of further deferral can be reassessed. It is
important to note that at this time ozone time-trend analysis is
not capable of proving or disproving the theory of CFC catalyzed
ozone depletion per se. It can, however, indicate whether ozone
is being impacted from any source. Regulation appropriately
should focus on protection of the, ozone, not just on what one
anthropogenic effect might be. To date, no net depletion has
been detected.
1-5
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Introduction
Our comments throughout are directed toward support for
the Assessment and Surveillance option. Specifically, we note
that the uncertainties in the science make regulation at this
time unwise and unwarranted. As pointed out, the availability of
the early warning system allows EPA to monitor stratospheric
ozone while the research and assessment is being conducted. The
risk of waiting until the science is more completely resolved is
therefore minimal. In addition, if ozone depletion is indeed a
problem, it is international in scope and unilateral action by
the United States will have no appreciable environmental impact.
Given the Agency's goal to stimulate foreign action with this
regulation, it is difficult to see how non-aerosol regulation in
this country will stimulate foreign regulation in light of the
failure of the U.S. aerosol regulation to stimulate action abroad
of equivalent scope. (As a result of the U.S. aerosol ban, total
domestic use of CFCs was reduced by approximately 50%. No major
country has to date announced equivalent regulation). Throughout
the comments, therefore, we provide support for the Assessment
and Surveillance approach.
The submission body is divided into nine sections:
In Section II we discuss the uses and essentiality of
CFCs. Here we note the various major applications in which CFCs
are used and the reasons for their use. We also point out the
limitations of the currently available substitute products and
processes.
In Section III we discuss the legal issues of CFC
regulation. We note that EPA has no authority to regulate at
this time. We also point out the many problems of economic
incentives regulation, and we. suggest additional studies which
must be conducted before regulations can issue.
1-6
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Introduction
In Section IV we discuss the science of the ozone
depletion theory. We note the uncertainties surrounding the 1979
calculations and the advances that have been made since those
calculations. Particular attention is given to recent
developments (and their significance) in efforts to detect a
trend in actual ozone concentration measurements.
Section V evaluates the risk from continued production
and use of CFCs and from deferring regulation for several years.
The bottom line, of course, is that the risk is not developing as
predicted, and with the availability of an early warning system,
deferral of costly regulation to obtain better information is a
defensible option. We also discuss the risk which would be
associated with regulation of CFCs at this time and the need for
risk-risk evaluation.
In Section VI we discuss the international ramifications
and implications of CFC regulation. Ozone depletion, if it
occurs, is an international problem and unilateral action by the
United States will have no appreciable environmental benefit. We
also discuss the need for a true global assessment, resolution
and cooperative action plan, and point out that EPA's proposed
program will not advance such a goal.
In Section VII we discuss economic considerations of
EPA's proposed regulation of CFCs. We note that the impact of
economic incentives regulation are far greater than EPA has
realized, and that, therefore, the Agency must conduct additional
studies to support such regulatory initiatives.
Section VI I.I contains a discussion of the search for
alternatives to the currently used CFCs. We note that research
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Introduction
has been on-going almost since the inception of the theory but
that for the most part, no viable alternatives have emerged.
Section IX contains a general summary and conclusions,,
including our recommendations for action by EPA.
Section X contains appendices which in general are more
detailed and more technical discussions of portions of the main
body of comments. Where appropriate, we have indicated in the
text those places where an appendix provides additional
information.
Section XI lists references. Throughout the submission,
extensive use is made of references, both to previous reports and
submissions and to numerous articles, papers, etc., by outside
researchers. Copies of all cited references are submitted as
part of Du Font's formal response to the ANPR.
In addition, due to the fact that the CFC/Ozone issue
has been on-going since 1974, a large body of reports has been
generated by CFC producing and using companies and their
contractors. Most of these have been submitted to EPA or have
formed the basis for previous submissions to EPA by industry.
However, due to changes in personnel at the Agency and to a
desire to issue an up-to-date and complete official record on
which decisions can be made, we are incorporating as part of our
response to the ANPR those previous reports and submissions which
remain pertinent. We also include copies of a number of reports
prepared by EPA contractors which we believe contain important
data and analyses not as yet given adequate attention by EPA. A
list of the above reports and submissions with a brief descrip-
tion of each may be found in Appendix A.
1-8
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Introduction
Last, Du Pont is an active member of the Alliance for
Responsible CFC Policy. We participated extensively in the
formulation of the Alliance's comments which are being forwarded
to the Agency. We incorporate the Alliance's comments as our own
and they should be considered as part of the Du Pont submission
on the ANPR.
1-9
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II. CHLOROFLUOROCARBON USES AND ESSENTIALITY
Paqe
A. INTRODUCTION 2
B. REFRIGERATION AND AIR-CONDITIONING ' 4
C. MOBILE AIR-CONDITIONING 7
D. SOLVENTS 10
E. BLOWING AGENT FOR RIGID POLYURETHANE FOAM 13
F. BLOWING AGENT FOR FLEXIBLE POLYURETHANE FOAM 17
G. BLOWING AGENT FOR POLYSTYRENE, POLY-
ETHYLENE AND PHENOLIC FOAMS 21
H. FOOD FREEZANT 25
I. STERILANT GAS 28
J. INTERMEDIATE FOR FLUOROPOLYMER PRODUCTION 32
K. CHLOROFLUOROCARBONS AND ENERGY CONSERVATION 36
L. SUMMARY 44
II-l
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CFC Uses and Essentiality
A. INTRODUCTION
Historically, discussion of the Chlorofluorocarbon/Ozone
Depletion Issue has centered on three questions:
1. To what extent, if any, will emissions of the family
of chemicals known as chlorofluorocarbons (CFCs)
lead to an eventual depletion of the earth's
stratospheric ozone layer?
2. If this were to occur, what would be the
consequences to human health and the environment?,
and
3. If there would be adverse consequences, to what
extent should the production or use of CFCs be
curtailed?
Often forgotten in these discussions is the key fact
that CFCs play a wide, and in many instances essential, role in
modern society. Perspective is needed on:
1. The nature of these chemicals.
2. Where they are used.
3. Why they are used.
4. Why they can't be readily replaced with something
else.
Consequently, we believe it is appropriate to begin our
submission with a review of the major uses of CFCs. For each
II-2
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CFC Uses and Essentiality
use, we provide a brief description, a highspot of the essen-
tiality or benefits of the use and a review of the limitations of
existing alternatives.
For more detailed information on the uses of CFCs (where
used and why) and the competing available alternates, we refer
the reader to the March, 1978 Du Pont Submission to EPA [Du Pont,.
1978], a copy of which is attached. Although this submission was
based on 1976 data (the most recent full-year for which data was
available at the time of the 1978 submission preparation), it
remains pertinent in its descriptions of CFC uses and non-CFC
alternatives. (Details on Du Font's program to develop suitable
alternative fluorocarbons appears in Section VIII and Appendix
B).
In addition, because energy conservation has become such
an important national objective, and because CFCs generally
provide a significant energy advantage over their alternatives,
we discuss CFCs and energy conservation in Section II-K. (De-
tailed support for our energy discussion appears in Appendix C).
II-3
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CFC Uses and Essentiality
B. REFRIGERATION AND AIR-CONDITIONING
1. Description
Chlorofluorocarbons (CFCs) are used widely as
refrigerants in mechanical refrigeration and air-conditioning
systems. In these systems, for instance in a home refrigerator,
the refrigerant alternatively is expanded and compressed to
dissipate heat from a cooling chamber.
In 1979 approximately 270 million pounds of CFC were
used in refrigeration and air-conditioning applications, or very
roughly 33 percent of total domestic CFC production.
For simplicity, the ensuing discussion will be limited
to refrigeration.
2. Essentiality and Benefits
Refrigeration is essential to today's way of life.
Meat, poultry, dairy products, fruits, and vegetables -
from processing to storage, to transportation, to the consumers'
tables - require refrigeration whether the product is sold fresh
or frozen. More than three-fourths of all food .consumed by
Americans is processed, shipped, or marketed under some degree of
refrigeration.
Nearly all households in the United States have one or
more refrigerators and freezers. Bulk shipments of food products
are made in 178,000 refrigerated vans and 27,000 refrigerated
freight cars for eventual distribution through over 40,000
supermarkets and nearly 180,000 other food stores, as well as
250,000 restaurants and other commercial and institutional eating
establishments - all of which require refrigeration equipment.
II-4
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CFC Uses and Essentiality
This vast array of refrigeration equipment and facilities helps
ensure that food reaches the nation's tables with minimum loss of
food value and minimum risk to health because of spoilage and
contamination.
Refrigeration also is critical in other activities which
are esential to public health. Blood, bone, and tissue are
stored under refrigerated conditions in most of the 8,000
hospitals in the United States. In other medical applications,
refrigeration of biological matter is used either to preserve or
to destroy the viability of the material and to prevent
degeneration. The manufacture and storage of lifesaving
Pharmaceuticals require refrigeration.
Virtually all such refrigeration equipment is designed
for, and exclusively uses, CFC refrigerants. Other refrigerants
cannot be substituted in this equipment. In fact, other
refrigerants generally are considered too hazardous for use, even
if suitable equipment to use them were available. Therefore,
there is considerable concern for the public safety in the use of
non-CFC alternatives as indicated below.
More recently, energy concerns have resulted in many
consumer appliances receiving energy efficiency ratings. All the
high-efficiency refrigerators and freezers developed under this
energy-conserving program utilize CFC refrigerants and CFC-blown
thermal insulating foam (see Section II. - E) .
3. Limitations of Alternatives
Prior to 1931, refrigeration equipment used refrigerants
such as methyl chloride, ammonia and sulfur dioxide. These
materials are toxic and some are flammable or explosive.
II-5
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CFC Uses and Essentiality
CFCs were developed specifically to overcome these
serious hazards. Their widespread use attests to how well they
have met the requirements for safety. Incidents of refrigerant
toxicity and fires are almost unknown in CFC refrigeration
systems. On the other hand, the literature contains numerous
reports of deaths, injuries, and fires attributed to ammonia,
sulfur dioxide, methyl chloride, and other non-CFC refrigerants.
Efforts to date to develop safe alternatives for CFC refrigerants
have been unsuccessful. (See Section VIII and Appendix B).
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CFC Uses and Essentia1ity
C. MOBILE AIR-CONDITIONING
1. Description
Chlorofluorocarbon 12 is the refrigerant used in mobile
air-conditioning in automobiles, trucks, and farm tractors, etc.
the refrigerant alternately is expanded and compressed to
dissipate heat from the inside of the vehicle.
In 1979 approximately 105 million pounds of CFC were
used in mobile air-conditioning applications, roughly 13 percent
of total domestic CFC production.
2. Essentiality and Benefits
Air-conditioning plays a key role in reducing the
debilitating effect of heat stress on human activity. It
contributes to improved safety, health and productivity.
For example, driving under the heat stress conditions
commonly experienced in many parts of the United States during
the summer months has been shown to adversely affect driver
alertness. Lack of alertness has been ascribed a key factor in
many of the 47,000 fatalities and 1,800,000 disabling injuries
experienced annually in traffic accidents in the United States.
A recent study of the effect of heat stress in driving perfor-
mance conducted for the National Highway Traffic Safety Adminis-
tration concluded that "suitable air-conditioning equipment or
other effective countermeasures should be available to drivers
who will be exposed for extended periods of time to [heat stress]
conditions."
Virtually all such mobile air-conditioning equipment is
designed for the exclusive use of CFC-12. Other refrigerants
cannot be substituted in this equipment. CFC air-conditioning
Ii-7
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CFC Uses and Essentiality
refrigerants are thus an important asset in current programs to
increase passenger safety in transportation.
3. Limitations of Alternatives
Chlorofluorocarbon 22, the refrigerant used in residen-
tial and commercial air-conditioning, although now under regula-
tory consideration by the EPA, is not as great an environmental
concern as CFC-12 because most of it is removed naturally in the
lower atmosphere.
Chlorofluorocarbon 22, therefore, has been considered as
an alternative refrigerant for use in auto air-conditioning;
however, it necessitates higher equipment operating pressures to
achieve proper operation. To obtain these higher pressures,
stronger and heavier equipment than that currently used is needed
for safety reasons.
Since automobile makers have identified weight reduction
as an important means to help achieve mandated energy conser-
vation goals by 1985, weight increases to accomodate air-
conditioning would waste fuel. Further, the development of this
equipment would be an expensive and time-consuming task. For
example, one auto company reports the development of necessary
new compressors would require an investment of $150 million and
five to seven years of development effort.
Systems which use air as the refrigerant (air cycle
systems) are being investigated for auto air-conditioning but
major questions concerning their energy efficiency, effective-
ness, and reliability still must be answered. Air cycle systems
also are likely to add considerable weight to the vehicle and
II-8
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CFC Uses and Essentiality
require more power to operate. Further, there is no assurance
that the current concerted development effort - which also would
require five to seven years - will result in a workable air cycle
system for use in mobile air conditioners.
II-9
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CFC Uses and Essentiality
D. SOLVENTS
1. Description of Use
Chlorofluorocarbon solvents are based on CFC-113. They
are used mainly as high-quality cleaning solvents in special
equipment that purifies and recycles the solvent for multiple
reuse.
The equipment contains the vapor from the boiling
solvent. Parts to be cleaned are lowered into the vapor.
Freshly distilled solvent condenses on the parts, rinsing off the
contaminants. The vapor heats the cleaned parts so they dry
rapidly as they are removed from the vapor.
Solvents serve many purposes, including the removal of
soldering fluxes from electronic components, the cleaning of
metal, plastic items, and glass, and the drying of parts by
displacing water. Chlorofluorocarbon solvents are most fre-
quently used where high-reliability cleaning is essential, such
as in the manufacture of semiconductor, aircraft, computer,
medical and military devices.
For certain special uses, CFC-113 is blended with other
solvents. Such formulations preserve the low toxicity and non-
flammable characteristics of the CFC component.
In 1979 approximately 130 million pounds of CFC were
used in solvent applications, roughly 16 percent of total
domestic CFC production.
11-10
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GFC Uses and Essentiality
2. Essentiality and Benefits
The nonflammability and low toxicity of CFC-113 solvent
provide a major contribution to worker safety.
No implications of carcinogenicity, mutagenicity, or
teratogenicity have been found after extensive toxicity testing
and after many years of use. No organic solvent has a lower
toxicity rating that CFC-113. It has high chemical stability and
does not require the addition of stabilizing chemicals. This
permits repetitive recovery and reuse without danger of decompo-
sition leading to acid formation which can damage the items being
cleaned. Many other nonflammable solvents do require such
stabilizing additives.
This same chemical stability also means that CFC-113 is
photochemically stable, and hence, does not contribute to
photochemical oxidant levels in smog - a major national air
quality concern with many alternative solvents.
Other important advantages result from the thermodynamic
properties of CFC-113. The low boiling point and low heat of
vaporization result in unusually low energy requirements for
vapor cleaning equipment operations, thus contributing to energy
conservation. The low temperature and high density of the vapor
in vapor cleaning equipment also permit unusually efficient
recycle, typically well in excess of 99 percent. The low boiling
point also permits safe handling of parts as soon as they are
taken from the vapor cleaning equipment.
11-11
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CFC Uses and Essentiality
3. Limitations of Alternatives
Other solvents might be used in some applications, but
at a penalty.
Replacement of CFC-113 by hydrocarbon solvents, which
are flammable, would require major plant investment in
explosion-proof equipment. Chlorinated solvents are more toxic,
and can damage many plastics and elastomers that are compatible
with CFC-113. Vapor emissions of hydrocarbons and chlorocarbons,
with few exceptions, result in elevated levels of photochemical
oxidant in smog, and are implicated in concerns over the safety
of the work environment.
Water is an alternative for some cleaning operations,
but critical cleaning of electronic, medical, space program, and
defense items require extremely low levels of residual soil.
Water cleaning systems can leave behind trace amounts of the
chemical surfactants necessary in the water process. On
electronic circuit boards and components, these residual
surfactants can cause electrical leakage, equipment malfunctions,
and reduced reliability. Solvent cleaning processes also
concentrate removed soil for proper disposal as the solvent is
recycled, while water cleaning disperses the soil in large
volumes of water. Additionally, there are increasingly stringent
requirements for discharge of contaminated water. Cleaning up
water to meet the standards generally is quite energy intensive.
11-12
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CFC Uses and Essentiality
E. BLOWING AGENT FOR RIGID POLYURETHANE FOAM
1. Description of Use
Rigid polyurethane foams are formed by reaction of
suitably formulated chemicals. The inclusion of chlorofluoro-
carbon 11 as a "blowing agent" permits the formation of a light
foam by "inflating" the reacting chemicals. The foam formulation
and reaction conditions can be controlled so that the walls of
each minute bubble or cell remain intact, trapping the blowing
agent in the foam. This "closed-cell" structure also contributes
to the rigid character of the foam.
Formulation changes permit the manufacture of open-cell
or flexible polyurethane foams for other uses. (See Section
II-F).
Rigid polyurethane foams are used primarily for thermal
insulation, for example, in home construction paneling and
roofing, and between the walls of refrigerators and freezers.
Efficient insulation uses trapped gas to keep heat or cold where
needed, as a down-filled jacket keeps the wearer warm by trapping
air.
Because of its low thermal conductivity, CFC vapor is
much more effective than air as an insulating gas. Actually,
CFC-blown polyurethane foams provide the best insulation possible
using today's materials and technology. The energy savings
In the insulation industry, insulation may be measured as the "K
factor." Lower K factors signify lower heat loss and thus
better insulation. For example, K factors for chlorofluoro-
carbon-blown polyurethane: 0.12; for fiberglass: 0.25
btu/hr/in/degrees F/ft . Therefore, the polyurethane foam is
twice as effective per unit thickness. (See Section II-K).
11-13
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CFC Uses and Essentiality
associated with this use are extremely large (See Section II-K).
Additionally, compared with other blowing agents, CFC blowing
agents permit a lighter weight, more uniform, high quality foam,
with greater adaptability to many insulating tasks.
Rigid polyurethane foam is manufactured in several
forms. Approximately one-quarter of the production is
boardstock, used in residential, commercial, industrial, and
transportation construction.
Alternatively, foam may be prepared in a preformed
cavity. Such "poured-in-place" foam constitutes almost half of
rigid polyurethane foam production and is particularly important
in refrigerator and freezer manufacture.
Additionally, the foam can be sprayed on the surface to
be insulated. Tanks and pipelines can now be insulated
economically by such techniques; whereas the high cost of
alternative insulating procedures could not be justified by the
energy savings realized. The same spray-on technique is
replacing the expensive paper felt and hot asphalt technique for
sealing and insulating roofing on industrial and commercial
buildings.
Spray-on application accounts for about one-quarter of
rigid polyurethane foam production. The application of sprayed
foam typically is performed by hundreds of small, local busi-
nesses. Minor additional uses are in packaging and marine
flotation devices.
In 1979 approximately 75 million pounds of CFCs were
used in these applications, roughly 9 percent of total domestic
CFC production.
11-14
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CFC Uses and Essentiality
2. Essentiality of C F C B ,lo w lng__Ag_ e^n JL^_AJl_C lg.jj.gjj. _C e_ l_ 1
Polyurethane Foam
Rigid polyurethane foam insulation made using CFC
blowing agents has .physical advantages which are unattainable by
other insulation materials.
Rigid polyurethane foam using CFC blowing agents:
Provides excellent insulation in thin amounts,thus
conserving energy and increasing usable space for
household refrigerators and freezers.
Provides the most energy-efficient, commerical
refrigeration display and storage facilities
available.
Imparts structural integrity as well as insulation
for walk-in refrigeration storage, refrigerated
railroad cars, refrigerated delivery trucks,
refrigerated truck trailers, and public and
commercial roofing and paneling - both interior and
exterior.
Permits large foam sections and filling applications
to be made without overheating and charring the foam
core, by moderating the effect of the heat from the
chemical reaction in which the polyurethane resin
itself is formed.
Gives excellent adhesion to metal surfaces.
Promotes uniform density throughout the entire foam
structure.
Il-ib
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CFC Uses and Essentiality
Permits the application of spray-on insulation over
a wide range of weather conditions.
3. Alternatives and Limitations
With present technology and materials, there is no
available substitute for CFC blowing agents in rigid polyurethane
foams.. If, due to regulation, rigid polyurethane foams were to
be replaced with such alternatives as fiberglass, other foams
made without CFC blowing agents, or wood pulp products, then
deficiencies must be accepted in such factors as insulation
effectiveness, weight, cost of materials and application,
structural integrity, and energy conservation. These are, in
fact, the reasons for selecting rigid polyurethane foams over
competitive technology.
11-16
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CFC Uses and Essentiality
F. BLOWING AGENT FOR FLEXIBLE POLYURETHANE FOAM
1. Description of Use
Flexible polyurethane foams are formed by reaction of
suitably formulated chemicals. The manufacturing processes are
varied from those used for rigid polyurethane foam manufacture
(See Section II-E) to ensure breakage of the polymer walls which
initially separate the minute bubbles or cells created by the
"inflating" action of the blowing agent. The result is a
three-dimensional network of cells, open to each other, which
contribute to the flexibility of the foam.
Water, methylene chloride and chlorofluorocarbons (CFCs)
are used as blowing agents to control some of the physical
properties of the final foam. These three agents are partly, but
not fully, interchangeable. The extent of interchangeability
depends on the formulation and foam characteristics desired.
Flexible polyurethane foam is prepared either as a large
"bun" (which has the appearance of an enormous loaf of bread) ,
which is subsequently cut into "slabstock," or in a mold of its
ultimate design shape.
Flexible polyurethane foam is utilized in padding for
furniture, and for seats and interiors in transportation. It is
used for bedding, textile laminate, carpet underlay, gasketing,
sound deadening, and packaging.
In 1979 approximately 50 million pounds of CFC .were used
in these applications, roughly 6 percent of total domestic CFC
production.
11-17
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CFC Uses and Essentiality
2. Essentiality and Benefits
Flexible polyurethane foam products essentially have
replaced the cotton/steel spring construction used in furniture
manufacture. The use of foam contributes to the comfort of the
user resulting in high customer demand. Use of polyurethane foam
also simplifies furniture construction, reducing costs.
This combination of advantages has held down furniture
costs to the homeowner and has resulted in almost complete
conversion of the industry to this improved construction.
The automotive industry uses substantial quantities of
polyurethane foam, both molded and slab, not only to offer the
customers the benefits of greater comfort and superior styling,
but also to achieve the weight reductions necessary to meet
mandatory government specifications on fleet fuel consumption.
Soft foams with high resilience also provide lightweight padding
to satisfy mandated crash protection requirements in automobile
interiors.
There are a number of properties of CFCs which make
them ideally suited as blowing agents. They are odorless,
nonflammable, have low toxicity and are nonreactive. These
properties are particularly significant since blowing agents are
released relatively rapidly from open-cell foams into the
workplace enviroment during foam preparation, cutting, and
curing. These properties are a major asset in maintaining a safe
working environment. CFC blowing agents also help assure a
consistent high quality in foam production.
11-18
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CFC Uses and Essentiality
3. Alternatives and Limitations
The extent to which additional water may be used as an
alternative blowing agent is severely restricted since it impairs
the essential flexibility of the foam.
Numerous studies have been undertaken to find other
substitutes for CFC blowing agents in the manufacture of
polyurethane foams. Methylene chloride has been used as a
substitute in a number of polyurethane foam formulations.
However, concessions must be made in the physical properties of
the manufactured foam. Methylene chloride also requires special
polyols and amine catalysts in almost all foam formulations.
Users have said CFCs are "forgiving" blowing agents, meaning that
less strict control is necessary versus methylene chloride, or
alternatively, that less off-specification foam product is
produced than is the case with methylene chloride.
There is not the toxicity concern with CFCs that there
2
is with methylene chloride. The substitution of methylene
chloride for chlorofluorocarbons, by some foam producers, has
required additional ventilation for the curing tunnels in which
the foam bun is formed to ensure safe working conditions for the
foam-line operators.
2
The Threshold Limit Value (TLV) is a conventional measure of the
maximum acceptable average exposure during a workday. CFC
blowing agents with a TLV of 1,000 ppm have the highest (least
toxic) value assigned to any chemical except carbon dioxide (a
natural product of respiration) and simple asphyxiants such as
nitrogen. The TLV for methylene chloride is 100 ppm or onetenth
the value for CFC blowing agents. Current toxicological
concerns could result in the allowable exposure to methylene
chloride being lowered further in the future.
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CFC Uses and Essentiality
Some polyurethane foam manufacturers have been able to
substitute methylene chloride for CFC in certain high-density
foam formulations, but not in all low-density formulations.
(Low-density ("supersoft") foams are finding growing use in
quality furniture manufacturing). Low-density polyurethane foams
are substantially more difficult to make using methylene chloride
and require extensively-modified formulations compared with foams
using CFC blowing agents. Therefore, a direct across-the-board
substitution of methylene chloride for CFC cannot be made with
existing technology.
11-20
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CFC Uses and Essentiality
G. BLOWING AGENT FOR POLYSTYRENE, POLYETHYLENE, AND PHENOLIC
FOAMS
1. Description of Use
When chlorofluorocarbon (CFC) blowing agent is blended
with molten polystyrene resin and extruded through a die, the
blowing agent vaporizes and a sheet of foamed polystyrene forms.
After a short aging period, during which air permeates
into the cells, the sheet is "thermoformed" (shaped by heat) in
hot presses into the final product form.
The thermoformed products are everyday items such as egg
cartons, meat trays, produce and fast-food containers, disposable
dinnerware, and many industrial containers. The containers are
sanitary, nonabsorbent, esthetically attractive and readily
decorated. Modifications of the process give molded and
loosefill packaging, insulation products, and even a filler for
lightweight concrete.
Analogous processes use the same blowing agents to
manufacture polyethylene foams, which are unmatched by any other
packaging material for lightness and high compressive strength.
Comparable techniques yield hard, porous foams from
phenolic resins. The foams are used in diverse applications,
from pipe insulation (where the inherent flame retardancy of the
resin is required), to packaging for fresh-cut flowers.
In 1979 approximately 40 million pounds of CFC were used
in these applications, roughly 5 percent of total domestic CFC
production.
11-21
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CFC Uses and Essentiality
2. Essentiality and Benefits
CFC blowing agents are nonf lammable and have an ex-
tremely low toxicity rating. Since substantial blowing agent is
emitted during manufacture of these foamed plastics, these two
properties are a major asset in maintaining a safe working
environment. Ventilation requirements are reduced with attendant
heating and cooling energy savings.
CFC blowing agents have a unique combination of addi-
tional properties. They are:
Compatible with, and soluble in, resins for easy
formulation and excellent control of the charac-
teristics of the final foam.
Inert, which provides nonreactivity with the resin
and equipment during high-temperature extrusion
phases.
Excellent contributors to needed physical charac-
teristics in the extruder and die, such as surface
tension and viscosity.
Inherently good nucleation agents - a term describ-
ing the ready formation of numerous and uniform
small bubbles throughout the expanding foam.
Provide the excellent insulation properties needed
in thermal insulation uses. (See Section II-K).
11-22
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CFC Uses and Essentiality
3. Alternatives and Limitations
Two possible alternatives to CFC for blowing polystyrene
foam are pentane and chemical blowing agents.
Pentane blowing agent is used by some manufacturers.
However, the flammability and explosion hazards of pentane must
be minimized by explosion-proofing all equipment and rigorous
elimination of static electricity. Costs of $500,000 per plant
are estimated for ventilation and roll storage area alterations
required for pentane use. Heating costs are estimated thereafter
to increase 25 percent due to the higher ventilation required to
limit fire and explosion hazards. The hazard to worker and
property cannot be eliminated, as the history of pentane use
clearly shows.
Although pentane is cheaper than CFCs, basic material
costs are nevertheless increased by pentane use since more resin
per article must be used to match the properties of CFC-blown
polystyrene foam products.
Alternatively, chemical blowing agents could be used
which decompose to give off nitrogen under the hot extruder
conditions. Chemical blowing agents currently are expensive and
limited to certain specific uses. The chemical blowing agent
concentration necessary to produce light foam would raise product
costs, making the product noncompetitive. Chemical residues are
left from chemical blowing agents, and high residue levels create
stability problems in the product.
Information provided to EPA by Du Pont [Du Pont, 1978].
11-23
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CFC Uses and Essentiality
Low-density polyethylene foam and phenolic foams with
high thermal insulation value cannot be produced today with other
blowing agents.
Elimination of these foam products would force a return
to such alternatives as wood pulp products for packaging. Wood
pulp products largely have been superseded due to the improved
sanitary and esthetic properties of plastic foams. Wood pulp
food containers absorb moisture and grease from food contents, a
sanitary and esthetic disadvantage.
One area where costs would clearly increase is in hospi-
tals where the replacement of sanitary and germ-free disposable
foodware with chinaware would add labor and energy costs assoc-
iated with adequate washing and cleaning for reuse.
11-24
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CFC Uses and Essentiality
H. FOOD FREEZANT
1. Description
The liquid food freezant (LFF) process of freezing food
consists of spraying the food with,or immersing the food directly
in, liquid food-grade CFC-12, which boils at -22 degrees F (-30
degrees C) . This results in very rapid freezing. It is used
only to freeze fragile, difficult-to-freeze, and relatively
expensive food products.
The primary products frozen in LFF are cob corn,
french-sliced green beans, seafood (primarily shrimp and clams),
berries, and small portions of meat. Vapor from the freezing
bath is efficiently condensed and recycled by a secondary
refrigeration unit.
In 1979 approximately 10 million pounds of CFC-12 were
used in this application, very roughly 1 percent of total
domestic CFC production.
2. Essentiality and Benefits
Freezing of food is an important and growing method of
food preservation and an important alternative to canning and
preserving with chemical additives. Approximately 7 percent
(about 20 billion pounds per year) of all food consumed in the
United States is frozen at some time in the distribution channel
from production to storage, to transportation, to retail
display cases, to consumers' tables.
11-25
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CFC Uses and Essentiality
There are three basic methods of food freezing:
Percent of Total
Method Frozen Food
Air Blast 88
Cryogenic (Liquid nitrogen
or carbon dioxide) 10
LFF 2
Since LFF and cryogenic freezing of food are more expen-
sive than air-blast freezing, they are used only when considera-
tions of product quality, processing, or other advantages dictate
their use. An example is frozen corn-on-the-cob. The recent
retail availability of this product is due to the high-quality
product made possible by the LFF process.
3. Limitations of Alternatives
For specialty products where considerations of product
quality, processing ease, and yield are important, either LFF or
cryogenic systems can be used. Air blast could be used, but the
quality of the frozen food product is reduced. Therefore, the
LFF process always is compared and evaluated opposite cryogenic
systems.
The major advantages of LFF over cryogenic systems are:
Due to the ability of LFF systems to recycle the
freezant for repeated use (which is not practical in
cryogenic freezing), there is a bottom-line savings
in cost of freezing when using LFF. Typically, this
amounts to approximately a three cent savings per
11-26
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CFC Uses and Essentiality
pound of food frozen, depending upon the specific
frozen food.
Due to the recycle of the refrigerant, the use of
LFF is more energy-efficient than cryogenic freez-
ing.
Products are crust-frozen almost instantly and,
consequently, product dehydration is lower (almost
zero) for LFF. This results in a cost savings and a
quality advantage over cryogenic freezing. Products
also are completely frozen more rapidly in LFF which
results in a further quality advantage. (Slow
freezing allows the formation of large ice crystals
which damage the cell structure of the food; this
results in the food becoming mushy when thawed).
Small food items, such as shrimp or berries, can be
"individually quick-frozen," since they are
separated automatically when dropped into the
boiling freezant. Other processes result in frozen
clumps of the food items unless separated by hand
prior to freezing - an expensive, labor-intensive
step.
11-27
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CFC Uses and Essentiality
I. STERILANT GAS
1. Description of Use
Ethylene oxide (EtO) is an extremely effective
sterilizing agent. However, its flammability, in the pure form,
severely limits its use. Consequently, where the sterilizing
ability of EtO is required but its flammability cannot be
tolerated, EtO is mixed with an inerting agent, such as a chloro-
fluorocarbon or carbon dioxide. The inerting agent most often
used is CFC-12. The most common mixture of EtO and CFC-12 is 12
percent EtO and 88 percent CFC-12.
The principal markets for the mixture are hospitals and
manufacturers who prepare specially sterilized equipment and
devices for pharmaceutical and medical use. It also is used as a
fumigant and pesticide for granaries, warehouses, and ship cargo
holds.
In gas sterilization, a specific concentration of the
gas is introduced into a specially constructed sterilizing
chamber wherein temperature, humidity, and time of exposure can
be readily controlled. These parameters must be predetermined
for each sterilization cycle and are dictated by the nature of
the items to be sterilized.
Items commonly sterilized by the CFC/EtO blend include
catheters, gloves,, syringes, tubing for anesthetic and
respiratory units, and anesthetic and respiratory equipment
(nebulizers, humidifiers, mouthpieces, manifolds). Sterilization
of inhalation therapy equipment is a major use of the blend as
this equipment has the potential for patient-to-patient
contamination and infection.
11-28
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CFC Uses and Essentiality
In 1979 approximately 15 million pounds of CFC were used
for this application, very roughly 2 percent of total domestic
CFC production.
2. Essentiality and Benefits
Gaseous sterilization, in particular methods utilizing
the CFC/EtO blend, has grown to be increasingly important in
recent years.
Materials of construction (such as plastics and
elastomers) in many medical devices are not compatible with steam
autoclave conditions, radiation, or chemical sterilization, thus
creating a need for gaseous sterilization.
Additionally, the use of sterilizing gas enables the
sterilization of medical supplies and Pharmaceuticals after they
have been packaged, thus eliminating any danger of contamination
caused by handling in packaging.
Other benefits of using the CFC/EtO mixtures for gas
sterilization are:
Flammability and explosion hazards are eliminated.
CFC-12 is of such low toxicity that the toxicity of
the blend is only one-twentieth that of pure EtO, an
additional safety benefit for workers.
Much lower pressure (60 pounds per square inch) in
shipping containers than blends with carbon dioxide
(750 pounds per square inch). The CFC/EtO blend can
utilize lighter weight, less costly and more
easily handled shipping and storage containers.
11-29
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CFC Uses and Essentiality
Sterilizing cycles are shorter than those needed for
blends with carbon dioxide.
A constant composition is obtained whether the
supply cylinder is full or almost empty. For blends
with carbon dioxide, some fractionation occurs,
which can lead to inconsistent sterilization.
Sterilization at lower chamber pressures results in
the need for less costly sterilizing chambers than
4
is the case for carbon dioxide/EtO blends.
3. Alternatives and Limitations
Nonflammable blends of carbon dioxide and EtO can be
prepared but have the major practical disadvantages discussed
above.
The use of CFC-12/EtO has grown rapidly because previous
sterilizing techniques employing heat, steam or chemicals are now
limited due to deleterious effects on certain instruments and
equipment. Today, medical devices contain electronic, plastic,
or easily damaged components. Thus, the gas sterilizer is
becoming common in hospitals alongside autoclaves which
previously handled most sterilizations.
4
The composition of the nonflammable blend with carbon dioxide is
10 percent EtO. Sterilizing effectiveness is proportional to
the number of EtO molecules present. To achieve comparable
sterilizing rates and effectiveness, the pressure necessary
using the carbon dioxide blend is three times as high as the
pressure using the CFC blend (due to the difference in partial
pressures of CFC-12 and carbon dioxide).
11-30
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CFC Uses and Essentiality
Aside from irreparably damaging some items, autoclave
sterilization conditions (moisture and high temperature) may
cause premature deterioration of items constructed from plastics
and elastomers, resulting in higher replacement costs.
Cold chemical sterilization (glutaraldehyde) has the
limitations of long exposure times, inability to destroy all
organisms, and poor efficacy. An item sterilized in a chemical
bath must be removed, dried, and packaged. The rinsing and
handling necessary in packaging can recontaminate the item.
Radiation sterilization is limited by the cost of the
apparatus (which may be hundreds of thousands of dollars) , the
adverse effect upon certain elastomers and plastics, and the lack
of information on exposure time and dosage for specific
sterilization problems.
Presently manufactured alternative fluorocarbons (not
implicated in the ozone depletion theory) do not have suitable
flame suppression properties or pressure characteristics. They
cannot be substituted for the presently used CFC-12.
11-31
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CFC Uses and Essentiality
J. INTERMEDIATE FOR FLUOROPOLYMER PRODUCTION
1. Description of Use
In this application, CFC-22 is first chemically con-
verted to the monomers, tetrafluoroethylene and hexafluoropro-
pylene, which, in turn, are reacted to form fluoropolymers and
fluoroelastomers. Both steps in this process are carried out in
tightly sealed process equipment, from which emissions are
negligible. The final products are non-volatile polymers from
which CFCs cannot be regenerated. Neither the monomers nor the
final polymers have any potential for ozone depletion.
Fluoropolymers and fluoroelastomers are ultra-perfor-
mance polymers which are used widely in industry in very harsh
environments or very demanding service. Use of these materials
is growing rapidly to meet new high standards for safety, pollu-
tion control, equipment life, equipment utility and energy
conservation.
In 1979 approximately 60 million pounds of CFC-22 were
used in this application, very roughly 7 percent of total domes-
tic CFC production.
2. Essentiality and Benefits
Fluoropolymers have the outstanding chemical, electri-
cal, and high temperature properties, plus resistance to burning,
needed by industry to meet new high standards for safety, pollu-
tion control, and energy conservation, and to minimize cost
through better utility and long equipment life. They are also
used as replacement parts in the human body, in energy
exploration and production, and have space program and military
applications. In some cases fluoropolymers are irreplaceable.
In many cases fluoropolymers could only be replaced by exotic
11-32
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CFC Uses and Essentiality
metals or other special materials, or by a substantial sacrifice
in equipment life, utility, safety and/or energy consumption.
Since fluoropolymers are used so widely in industry, the overall
cost to society of replacing fluoropolymers would be very large.
The following list of Du Pont products provides an
indication of the wide range and importance of fluoropolymers
made from CFC-22:
"Teflon" and "Tefzel" Resins
Hexafluoropropylene Monomer
"Viton" Fluoroelastomers
"Kalrez" Perfluoroelastomers
"Teflon" Film & Tubing
"Teflon" Heat Transfer Products
"Nafion" Products
"Teflon" FEP Coated "Kapton"
Film
"Delrin" A/F Acetal/Fluoro-
polymer
"Armalon" Felts and Fabrics
"Dulite" Finishes
"Silverstone" Non-Stick
Finishes
"Teflon" Non-Stick
Finishes
"Zepel" Fabric
Fluoridizer
"Zonyl" Fluorochemical
Surfactants
"Krytox" Oils and
Greases
"Vydax" Fluorocarbon
Telomers
"Teflon" Fibers
"Tefzel" Film
Some uses for these products follow;
Valve and pipe liners
Packing
Bellows
Bearing pads
Seals
Thermoplastic compounds,
industrial greases.
Fibers, metal coatings,
and impregnates (such
as packings and glass
cloth).
II-3;
-------
CFC Uses and Essentiality
Rings
Insulators
Tape
Thread seal tape
Film, tubing.
Heat exchangers
Chemical equipment liners
Moldings for semiconductor
industry
High performance wire
insulation for the air-
craft, computer, utili-
ties, rapid transit, and
nuclear industries.
Membranes for the
chlorine industry
Roof structures
Filtration (anti-air
pollution) equipment
3. Limitations of Alternatives
There are no acceptable alternatives for fluoropolymers
in many applications, because fluoropolymers are chemically inert
to virtually all chemicals, can be used at very high tempera-
tures, and have good electrical properties. Where they could be
replaced, the cost would generally be very high due to higher
initial cost of available substitutes, reduced utility, decreased
safety, or shorter equipment life. For example, wire insulated
with "Teflon" resin is acceptable as a fire alarm cable and for
use in plenums, but wires insulated with non-fluoropolymer must
be put in conduits because they are not as heat-resistant. These
savings make it easy to retrofit buildings to improve fire
safety. Another example is the use of fluoropolymer lined pipe
and vessels to replace glass-lined equipment which is more
expensive and easy to break. In many cases, fluoropolymers have
replaced much more expensive parts machined from exotic metals,
with considerable reductions in energy consumption and cost.
11-34
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CFC Uses and Essentiality
Despite extensive research on alternative routes to
tetraf1uoroethylene and related fluoromonomers, there is no
practical process for manufacture of tetrafluoroethylene and the
related monomers other than the route based on CFC-22.
11-35
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CFG Uses and Essentiality
K. CHLOROFLUOROCARBONS AND ENERGY CONSERVATION
1. Summary
The use of chlorofluorocarbons (CFCs) in air-condi-
tioning, refrigeration, insulating foam and other uses results in
a large energy savings compared with systems using non-CFC
alternatives.
Based on a study by Battelle Columbus Laboratories for
Du Pont, [Battelle, 1980 See Appendix C] if such uses of CFCs
were banned and the next-best non-CFC alternative technology was
forced progressively to replace CFC technology, the energy
penalty would grow. Calculated in terms of gallons of fuel
equivalent, the first year penalty of 847 million gallons
increases to over 9.5 billion gallons at the tenth year and the
total for the first decade is almost 50 billion gallons (See
Table 1) .
Prior to this study the value of CFCs in conserving
energy resources had been neither thoroughly assessed nor
quantified.
The study concluded that a ban on the use of CFCs would
have "an adverse and serious impact on an already serious energy
problem."
Although the study examines the effect of a ban on the
use of CFC-11 and CFC-12, and a ban is not now contemplated, the
Environmental Protection Agency has announced its intention to
limit CFC production to current levels, and a longer-term
interest in a phase-down of United States CFC production by 50-70
percent. Such regulatory action would affect all uses of CFCs,
including
11-36
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CFC Uses and Essentiality
Table 1
SUMMARY OF ENERGY PENALTIES FROM A CHLOROFLUOROCARBON BAN
(MILLIONS OF GALLONS FUEL EQUIVALENT)
[FROM BATTELLE, 1980]
Using Next Best Non-CFC Alternative
1981
1990
Decade
Automotive Air-Conditioning
Home & Store Refrigeration
Insulating Foams
Liquid Food Freezing
TOTAL
(a)
161
446
231
9
847
1,070
5,267
3,171
12
9,520
6,870
27,461
15,365
106
49,802
(a) Includes losses due to outdoor compressor when using ammonia, and
incremental effect of elimination of CFCs in both refrigerant and
foams.
11-37
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CFC Uses and Essentiality
those examined in the study. The energy penalty, to a first
approximation, may be expected to be proportional to the
percentage phase-down of CFC production.
The above energy penalty would stem solely from cur-
tailing the availability of CFCs for existing uses and the
projected growth of these uses. The penalty as calculated did
not include the impact of expanded CFC use in current applica-
tions without growth in the application itself. As an example of
this later type of penalty we note that the U.S. Department of
Energy (DOE) recently published rule proposals [45 Federal
Register 43976-44086] setting forth energy efficiency standards
for household appliances. In its support documents [DOE, 1980],
DOE concludes that meeting these standards would entail an
increase in the use of CFCs. (This is discussed in more detail
in section 4). So the energy penalty of CFC regulatory
restriction would be tied not only to the impact of restricting
CFCs from current applications but also from future expanded CFC
applications.
A related energy impact would stem from the unavail-
ability of CFCs for new applications uses of CFCs that are
only in their infancy or, in some cases, only on the drawing
board. Several of these are discussed in Section VII-C.
11-38
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CFC Uses and Essentiality
2. General Conclusions and Methodology
For each use studied, various alternative technologies
were evaluated. Since only uses of CFC-11 and CFC-12 were
studied, incorporating other uses and other CFCs (as EPA intends
to do) would increase the penalty. As an example, domestic
air-conditioning, which uses CFC-22, was not included. Liquid
Food Freezing, which uses CFC-12, was not included as an example
of the energy conservation for even minor CFC uses.
The study noted that the energy penalty would undoubt-
edly continue to grow for many decades beyond the first since
displacement by obsolescence of the more efficient CFCs would not
be complete for several decades in such uses as thermal
insulating foam.
In conducting the study, Battelle compared the energy
consumption of CFC-using systems and equipment currently in use
versus the best of several alternatives, even if such alterna-
tives have not yet been demonstrated as commercially practical.
Predetermined criteria were used, Such as equivalent safety-in-
use, comparable cooling values and continued compatibility with
existing space parameters.
The actual penalty would be a composite of increases in
gasoline, fuel oil, coal, nuclear and hydroelectric power, etc.
To total the penalty, Battelle converted each penalty to a common
denominator, equivalent gallons of fuel, assumed to have an
energy content of 140,000 BTU/gallon. The tenth year total, 9.5
billion gallons, is almost incomprehensibly large. To aid in
understanding, equivalents in national energy sources and
consumption terms were calculated by Battelle (Table 2).
11-39
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CFC Uses and Essentiality
Table 2
HOW MUCH IS 9.5 BILLION GALLONS?
[FROM BATTELLE, 1980]
The Battelle report describes this energy penalty of a
hypothetical ban on CFCs in the tenth year as equivalent to:
The fuel required to drive 12 million average cars
(about 10 percent of all autos on United States
roads) for one year.
About 45 percent of current annual oil production
from Alaska's North Slope.
The energy (excluding gasoline) required to supply
11 cities of 500,000 population each for one year.
The energy output of 29 nuclear plants.
Eighteen times the petroleum savings envisioned by
use of gasohol in 1978.
11-40
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CFC Uses and Essentiality
Subsequently, in a report to the Environmental Protec-
tion Agency (EPA), on the economic implications of CFC emissions,
Rand Corporation [Rand, 1980] estimated the 1990 energy penalty
for avoiding CFC use just in insulating foam at 6.4 billion
gallons, or twice that estimated by Battelle, possibly reflecting
the conservative assumptions used throughout the Battelle study.
3. Specific Applications
a. Refrigeration and Automotive Air-Conditioning
Ammonia or propane were selected as the non-CFC
alternatives with least energy penalty. In each instance,
complete redesign of equipment is necessary: heavier equipment
is needed for the higher pressures, and special design consid-
erations must avoid otherwise unacceptable toxicological and
flammability hazards to building or vehicle occupants.
Air cycle and absorption systems were disqualified due
to even greater potential energy penalties.
The non-CFC alternatives may prove economically imprac-
tical, warned Battelle, even if the energy penalty could be
tolerated.
b. Insulating Foams
CFC-blown closed cell foams provide the most efficient
insulation available from today's technology. The low thermal
conductivity of the trapped CFC vapor in the foam yields an
insulation about twice as efficient as non-CFC alternatives, for
instance fiberglass, for a given thickness. Foams blown with
alternative blowing agents such as pentane or carbon dioxide may
be comparable in appearance, but not in insulating performance.
11-41
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CFC Uses and Essentiality
c. Liquid Food Freezing
Certain delicate foods, for instance shrimp and berries,
are too fragile for normal air blast freezing and must be frozen
by direct contact with liquid CFC-12 or cryogenically with liquid
carbon dioxide or liquid nitrogen. Since the CFC-12 freezant is
efficiently recycled, substantial energy savings accrue compared
with the cryogenic alternatives. Although liquid freezing is a
minor application for CFC-12, it too plays its part in energy
conservation due to CFC use.
4. U.S. Department of Energy Standards
In June of 1980, the U.S. Department of Energy (DOE),
responding to an act of Congress (PL 95-619), published proposed
rules [45 Federal Register 43976-44086] setting forth energy
efficiency standards for nine household appliances. These
standards which will become final in February of 1981, necessi-
tate improved insulation efficiencies, as well as other changes.
Specifically, DOE states that replacement of fiberglass
insulation with polyurethane foam is "cost-effective" and
"technically feasible" in freezers and refrigerators; design
option No. 1 states:
"Fiberglass insulation is replaced with polyurethane
foam insulation. Since polyurethane foam has a thermal
conductivity of about one-half that of fiberglass, this
option greatly reduces cabinet heat leak." [DOE, 1980,
p. C-2] .
For hot water heaters, DOE's No. 1 option is:
11-42
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CFC Uses and Essentiality
Improved insulation - Improved insulation involves using
thicker fiberglass insulation, denser fiberglass
insulation, or substituting polyurethane foam insulation
for fiberglass. This option may require changing jacket
sizes." [DOE, 1980, p. C-6].
As stated earlier, CFC-11 is the only blowing agent used
in producing insulating polyurethane foams.
Some 10-15% of refrigerators, 10% of freezers and
essentially all hot water heaters presently being manufactured
use fiberglass insulation, so conversions will be necessary.
In its accompanying Environmental Assessment Document
DOE concludes:
"An increase in the use of chlorofluorocarbons (CFCs) is
expected as manufacturers seek to improve the insulating
characteristics of refrigerators, refrigerator-freezers,
freezers and water heaters. Compared to projected U.S.
consumption of CFCs in 1990, however, these increases
are expected to be small, representing less than 4% of
projected U.S. consumption of CFCs in 1990." [DOE,
1980, p. S-4].
While the 4% figure cited above, of itself, is not
large, it constitutes another specific instance of an upward
pressure on CFC demand which has not been taken into account by
EPA in its proposed production cap. Furthermore, it creates a
classic "Catch 22" situation, wherein one Federal regulation runs
head-on into another, with business firms caught right in
between.
11-43
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CFC Uses and Essentiality
L. SUMMARY
Six major chlorof luorocarbons (CFCs) are manufactured in
commercial quantity in the United States:
CFC-11 (CC13F)
CFC-12 (CC12F2)
CFC-22 (CHC1F2)
CFC-113 (C2C13F3)
CFC-114 (C2C12F4)
CFC-115 (C2C1F5)
These compounds play an important role in the welfare of
society and in the national economy. The most common CFC uses
include:
The heat transfer fluid in residential and almost
all commercial refrigeration and air-conditioning.
The heat transfer fluid in all automobile and truck
air-conditioning.
The foaming agent used to manufacture plastic foams,
used for thermal insulation, cushioning and
packaging.
Cleaning agents for precision electronic and mechan-
ical equipment, and also for military hardware.
Fire and explosion suppressant for sterilizing gas
in hospital and industrial uses.
Liquid food freezant.
Intermediate for f luoropolymer production
11-44
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CFC Uses and Essentiality
An approximate distribution of total 1979 U.S. CFC
production by end use follows:
Use
CFC
(Million Pounds)
Percent of total
U.S. Production
Refrigeration and
Ai r-Cond it ioning
Auto Air-Conditioning
270
105
33
13
Solvents
130
16
Blowing Agent for
Polyurethane Rigid Foam 75
Blowing Agent for
Polyurethane Flexible Foam 50
Blowing Agent for
Other Foams
Liquid Food Freezant
40
10
5
1
Sterilant Gas
15
Other (Miscellaneous
Uses, Export and Use as
Chemical Intermediate)
120
15
TOTAL
815
100
11-45
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CFC Uses and Essentiality
CFCs are ideal for these uses because they have a unique
combination of physical and chemical properties. These proper-
ties result in very important benefits, including high safety-
in-use, low energy consumption and high compatibility with other
materials.
Because the uses are dependent upon the specific proper-
ties of the individual CFC employed, the compounds generally are
not interchangeable among applications.
Unlike the case with CFC aerosol propellants, the uses
of CFCs currently at issue generally cannot be replaced with
other compounds or processes without creating severe and often
unacceptable tradeoffs. The most important limitations of avail-
able alternatives are toxicity, flammability, energy efficiency,
performance and, of course, economics. Consequently, any deli-
beration on the need for, and degree of, potential restriction of
CFCs should be undertaken in the context of their critical
importance and the problems which would be created by their
unavailability.
11-46
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III. LEGAL ISSUES
Page
A. INTRODUCTION 2
B. AUTHORITY TO REGULATE 4
C. ECONOMIC DISINCENTIVES REGULATION 18
D. RULEMAKING PROCEDURES 29
E. CONCLUSION 45
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A. INTRODUCTION
In the October 7, 1980 Federal Register, EPA published
an Advance Notice of Proposed Rulemaking (ANPR) to outline its
regulatory thinking and to solicit comment on the various
approaches to regulation of non-aerosol uses of CFCs. To support
its current initiative against CFCs, EPA is relying upon reports
prepared in 1979 by the National Academy of Sciences [NAS,
1979a; 1979b] . No studies more recent than the 1979 NAS re-
ports are cited by the Agency or listed as supportive of EPA's
action. EPA's ANPR indicates that the CFC regulations will be
promulgated under the authority of Section 157 of the Clean Air
Act (42 U.S.C. §7450-7459), unless the Administrator deter-
mines that it would be in the public interest to proceed under
Section 6(c) (1) and Section 9(b) of the Toxic Substances
Control Act (TSCA) (15 U.S.C. §2601).
This regulatory effort by EPA raises matters of
serious concern to Du Pont. This portion of our comments is
divided into three different sections. In the first section, we
question the Agency's legal authority to proceed with further
regulation of CFCs. Specifically, we question whether there is
an adequate scientific basis to regulate and whether EPA has
sufficiently considered all of the scientific evidence before
moving ahead with regulation. In the second section, we share
with the Agency some of our concerns and perceived problems with
the Agency's preference for economic incentives regulation, or
more accurately, economic disincentives regulation. We point
out areas where the Agency's legal authority is questionable and
areas where it appears as though its analysis has not been very
carefully thought out. We also discuss some very complicated
questions related to the economic and competitive impact of the
economic disincentives regulation outlined by the Agency. In
the third section, we outline for the Agency the procedures it
must follow before proposing a formal rule. Both the Clean Air
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Act and TSCA impose upon EPA the requirement to set up a
rulemaking docket. In addition, there are certain further
scientific studies which EPA must conduct before proposing a
rule. And, there are considerable economic impact analyses
which must be performed before proposing a rule. Particularly
if EPA goes forward with economic disincentives regulation,
these economic impact analyses become very important. For that
reason, they must be extensive and they must be complete.
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B. AUTHORITY TO REGULATE
1. Findings to Support Regulation May Not Be Made
In its ANPR, EPA singled out two statutes under which
it could proceed should it determine that further regulation of
CFCs at this time is desirable. One is Section 157 of the Clean
Air Act, as amended (42 U.S.C. §7450-7459). The other is
Section 6(c)(l) of the Toxic Substances Control Act (TSCA). (15
U.S.C. §2601 e_t seg.).
Section 157(b) of the Clean Air Act provides, in
pertinent part:
[A]fter consideration of the research and
study under Sections [153 and 154] of this title,
... the Administrator shall propose regulations for
the control of any substance, practice, process or
activity (or any combination thereof) which in his
judgment may reasonably be anticipated to affect the
stratosphere, especially ozone in the stratosphere, if
such effect on the stratosphere may reasonably be
anticipated to endanger public health or welfare.
It would appear, therefore, that once the requisite studies
under Sections 153 and 154 have been completed, and the results
analyzed, EPA may regulate CFCs under 157 (b) jj: CFCs may
reasonably be anticipated to affect the ozone in the strato-
sphere, and if^ such effect may reasonably be anticipated to
endanger public health or welfare.
On the other hand, Section 6 (a) of TSCA provides, in
pertinent part:
If the Administrator finds that there is a
reasonable basis to conclude that the manufacture,
process, distribution in commerce, use, or disposal of
a chemical substance or mixture, or that any
combination of such activities, presents or will
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present an unreasonable risk of injury to health or
the environment, the Administrator shall [regulate
such chemical substance or mixture].
Thus, under TSCA, the Administrator has authority to regulate
CFCs, if CFCs now present an unreasonable risk of injury, or if
they definitely will present an unreasonable risk of injury to
health or the environment. This finding is to be distinguished
from the "may present an unreasonable risk" finding necessary to
support testing under Section 4 of TSCA. Whereas, EPA need only
find that a chemical may present an unreasonable risk to subject
it to testing requirements, it must find that a chemical
actually does or will present an unreasonable risk before
subjecting it to a control regulation.
As shall be demonstrated below, it is clear that, given
the available scientific evidence, the findings necessary to
support further CFC regulation under either Section 157(b) of
the Clean Air Act, or Section 6 of TSCA, may not be made.
Knowledge of the stratosphere is a science in its
infancy. Although much already is known about the chemistry and
physics of the stratosphere, and new results are being added at
a rapid pace, much work remains to be done. As a result, any
study of the stratosphere must not be viewed as the "last word"
on stratospheric knowledge. Rather, it must be viewed as a
"snapshot" a freezing of the stratosphere and what is known
about it when the study was conducted.^
The NAS report of November, 1979 [NAS, 1979a] , was
such a snapshot. Regardless of the validity of criticisms
leveled against the report upon its release (overstatement of
conclusions, under-estimates of uncertainties, missing chemis-
try) , the fact remains there have been significant advances in
the science since publication of the report advances which
throw into further question the utility of the NAS report in
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supporting a regulatory determination. As an example, recent
studies of the reaction of key chemical species indicate that
the predictions of future ozone depletion made by the NAS were
overstated by at least a factor of two.
Another consideration is the computer models used in
an attempt to simulate the atmosphere and to calculate the
future ozone depletion numbers. It should be emphasized that
the models employed by the NAS, and relied on to this day by
EPA, are simplified (one-dimensional) mathematical representa-
tions. Similar models were used to predict damage to the strato-
sphere from SST aircraft. Such predictions were proved to be
wrong based on subsequent scientific information.
A one-dimensional model was also used by the research
team employed by the United Kingdom's Department of the Envir-
onment in its assessment of the issue an assessment roughly
concurrent with the NAS effort. In the UK report the authors
concluded:
"These findings, together with other discrepancies
between model calculations and measurements bring into
question the validity of the models presently used to
predict ozone perturbations." [UK DOE, 1979, p.5]
A comparison of some of the principle findings of the
November, 1979 National Academy of Science's report and the
October, 1979 United Kingdom Department of the Environment's
report appears as Appendix D.
More recently (June, 1980) , a report by the Commission
of the European Economic Community (EEC) concluded in part:
"As they [the models] are simplified, they cannot
fully describe the behavior of the atmosphere and its
minority constituent parts." [EEC, 1980, p.8]
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We further note that at a recent (September, 1980)
meeting between EPA, EPA's scientific consultants and representa-
tives from the industry scientific research program, EPA was
warned against placing too much reliance on the predictions of
the one-dimensional models and using these predictions to make
regulatory decisions.
In the past year advances have been made toward
developing more sophisticated two-dimensional models. These
models more accurately represent the conditions found in the
real atmosphere. The NAS report suggested that some of the
known discrepancies between the one-dimensional models and
'atmospheric measurements would be eliminated by two-dimensional
models. However, this has not been the case. Discrepancies
remain. EPA should exercise extreme caution when basing
regulatory decisions on models known to be incomplete and at
variance with actual measurements. (These discrepancies are
discussed in more detail in Section IV - The Science and in
Appendix E).
These recent changes in the chemistry, and continuing
discrepancies between models and measurements, provide evidence
that the theory of depletion of stratospheric ozone by CFCs has
not been proved. The changes and discrepancies also indicate
that there is substantial uncertainity surrounding the whole
issue of the reliability of computer models as predictive tools.
A further problem is that EPA has not founded its
regulation upon actual measurements of the stratosphere. It is
clear that Congress intended that any regulation promulgated be
designed to protect the over-all stratospheric ozone, and that
the regulation be based upon actual measurements of the ozone
layer. in fact, it directed the Administrator to:
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rely upon reputable scientific and medical data and
measurements from both the laboratory and the field (see
H. Rep. No. 94-575, 94th Cong., 2nd Sess., part 1 at 14)
before proposing regulations.
Industry and its contractors have for some time been
analyzing the measurements of stratospheric ozone taken over the
past twenty years. This statistical and analytical technique is
commonly known as "ozone time-trend analysis" or "ozone trend
analysis". This technique, sensitive to an approximate change
of + 1 to + 1.5 percent ozone concentration over a period of a
decade, has detected no ozone depletion. EPA's rejection of
these results, while failing to provide any countering analysis
of its own, is in direct conflict with Congress1 intent that the
scientific basis for CFC regulation be predicated on reputable
measurements from the field.
The above arguments illustrate the uncertain scientific
basis of EPA's regulatory decision-making. As will be shown, it
is clear that substantial uncertainties remain in the scientific
theory. The computer models used by EPA have too much uncer-
tainty associated with their calculations to make them reliable
predictors of actual ozone depletion. (A more detailed discus-
sion of the scientific uncertainties surrounding ozone and the
1 Time-trend analyses of ozone measurements are being per-
formed by a number of independent groups. The studies and their
results are discussed in detail in Section IV and Appendix E.
These results show that there has been a slight increase in
average ozone levels over the last ten years. The 95 percent
confidence limits of these analyses are approximately + 1
percent to + 1.5 percent. In other words, with 95 percent
confidence, a decrease or increase in ozone of 1 to 1.5 percent
over a decade can be detected by these analyses. The range of
sensitivity, i.e., the limits of the ability to detect a change
in ozone, reflect the slightly different results from the
applicable individual studies.
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impact of CFCs on stratospheric ozone is presented in Section IV
and Appendices E and F).
Moreover, CFCs are extremely useful chemicals. They
are noncorrosive, nonflammable, virtually nontoxic and they have
a unique combination of properties which make them ideally
suited for use in a wide variety of products and processes. For
these reasons, they touch the life of every American. They are
used in food freezing, food transportation and storage, home,
commercial and vehicle cooling, furniture, packaging, insula-
tion, cleaning of precision components and fire retarding.
It is apparent, therefore, that the findings necessary
to support regulation under Section 157(b) of the Clean Air Act
or Section 6 of TSCA, may not be made. A summary of the
evidence shows that:
a. The computer models used by EPA to predict
depletion have too many uncertainties associated with them to be
reliable predictors. Recent developments in many scientific
areas throw into question the computer models' data base and
conclusions drawn from it. There is simply too much uncertainty
for the requisite finding of Section 157 or Section 6 to be made.
b. The availability of analysis of actual strato-
spheric ozone measurements (ozone trend analysis) provides an
early warning system which would, if the results so indicated,
give EPA the information necessary to proceed with regulation.
EPA has not considered the ozone trend analysis results, in
direct contravention with its statutory mandate to consider
ozone measurements. (See Section IV and Appendix E for a more
detailed discussion of ozone trend analysis and its
significance.)
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c. The evidence that increased solar ultraviolet
radiation should ozone depletion occur as predicted -- would
cause harm to human health or the environment is too uncertain
to make conclusive inferences. (See Section V and Appendix F
for a more detailed discussion of the effects of solar ultra-
violet radiation). Again, there is too much uncertainity to
declare conclusively that CFCs may reasonably be anticipated to
endanger public health or welfare, or that CFCs present an
unreasonable risk to health or the environment.
Thus, EPA is without statutory authority to proceed
with this rulemaking.
2. International Concerns
EPA's expressed intent witn respect to exports is that
exports will be subject to the conditions of regulation under
the proposed rule. Under Section 12(a) of TSCA, EPA may not
regulate chemicals which are manufactured for export from the
United States. The only exception to this rule is if the EPA
can find that the chemical will present an unreasonable risk of
injury to health within the United States, or to the environment
of the United States. Accordingly, before EPA may regulate CFC
exports it must take an affirmative finding that these exports
present an unreasonable risk of injury to health or the environ-
ment in the United States.
The issue of exports cannot be considered in a
vacuum. It bears more broadly on the overall issue of the
international concern surrounding ozone depletion and CFC
regulation. Ozone depletion, if it occurs, is truly an inter-
national problem. CFC emissions anywhere around the world
contribute equally to the potential for ozone depletion. This
ozone depletion in turn would affect all areas of the globe. As
a result, to be effective in reducing potential ozone depletion,
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CFC regulation must be international in scope. For reasons
outlined below, EPA's unilateral action in the United States is
unlawful under the Clean Air Act, TSCA and general principles of
administrative law. (Non-legal aspects of the international
character of this issue are taken up in Section VI).
Congress recognized the international significance of
the stratosphere and ozone when it passed the Clean Air Act
amendments. Section 156 of the Amendments reflects this
Congressional concern and provides that EPA and the President
must "develop [international] standards and regulations
which protect the stratosphere." It is thus apparent that EPA
should regulate CFCs in this country only when the international
consensus and basis for regulation is established. The
requirement that regulation to limit ozone depletion be
internationally based is corroborated in the legislative history
of the Clean Air Act:
In view of the worldwide impact of any ozone depletion
and the fact that half of the world's halocarbon use is
outside the United States, research efforts must be
established and a base established for international or
regional regulation, if it becomes necessary. (emphasis
added) Sen. Rep. No. 95-127, 95th Cong., 1st Sess. at 64
(1975).
In addition, it is questionable whether the Agency has
the authority to promulgate regulations which have as much, if
not more, benefit abroad as they do in the United States, yet at
the same time force the United States industry to shoulder the
entire burden of regulation. That is, it is questionable
whether, in the absence of international consensus and agreement
on regulatory steps, TSCA or the Clean Air Act gives EPA the
authority to promulgate a regulation whose potential benefit is
only minimally aimed at protecting U.S. citizens but whose
burden will fall entirely on U.S. citizens.
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Furthermore, promulgating regulations in this country
(under the pertinent sections of TSCA or the Clean Air Act)
which are designed to stimulate action by other nations is not
valid regulatory action. The regulations must have as their
purpose and effect the protection of humans and the environment
against unreasonable risk. This is required by the legislative
history of the Clean Air Act:
[CFC regulation must] be necessary to assure protec-
tion for health and the environment and to protect the
stratosphere. H. Rep. No. 95-29, 95th Cong., 1st Sess. at
102, n. 2.
Courts construing other environmental and health
statutes have come to similar conclusions regarding an admini-
strative agency's authority to regulate absent a showing of
substantial or significant risk, and absent a showing tnat the
proposed regulation is reasonably necessary to protect against
the risk. In Industrial Union Department, AFL-CIO, et. al. , v.
American Petroleum Institute, et. al. 48 U.S.L.W. 5022, US
, (June 24, 1980) (hereinafter cited as the Benzene case), the
Supreme Court held that the Occupational Safety and Health
Administration (OSHA) is required to find that a significant
risk to worker health exists before promulgating a standard
seeking to reduce the risk, and that the standard will indeed
reduce the risk to acceptable levels. At issue in Benzene was
the interpretation of Section 3(8) and 6(b)(5) of the Occupa-
tional Safety and Health Act. Section 3(8) permitted OSHA to
promulgate standards that are "reasonably necessary or appro-
priate to provide safe or healthful employment." OSHA attempted,
under Section 3(8), to lower the workplace exposure threshold
limit value (TLV) for benzene from 10 ppm to 1 ppm. Nowhere in
the rule-making record was there an explicit finding that expo-
sure to 10 ppm benzene presented a significant risk to human
healtn, and likewise there was not a finding that a new standard
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at 1 ppm was reasonably necessary to protect against a signifi-
cant risk. In striking down OSHA's standard, the Court said:
We agree ... that [Section] 3(8) requires [OSHA]
to find, as a threshold matter, that the toxic substance
in question poses a significant risk in the workplace and
that a new, lower standard is therefore 'reasonably
necessary or appropriate to provide safe or healthful
employment and places of employment' ... Congress in-
tended, at a bare minimum, that [OSHA] find a
significant risk of harm and therefore a probability of
significant benefits before establishing a new standard.
48 U.S.L.W. at 5024 (1980).
In Aqua Slide 'n' Dive v. Consumer Product Safety
Commission, 569 F.2d 831 (5th Cir. 1978), the Fifth Circuit
Court of Appeals held that the Consumer Product Safety
Commission (the Commission) was required to show substantial
risk and protection against the risk before regulating under
Section 9 of the Consumer Product Safety Act (CPSA). Section 9
of the CPSA requires a finding that a new standard or regulation
be "reasonably necessary to eliminate or reduce an unreasonable
risk of injury" before the Commission may promulgate a new
regulatory standard. The Commission had sought to require
manufacturers of swimming pool sliding boards to post signs
around the boards warning of possible harm from improper sliding
into pools. Plaintiff sued, claiming that the warning signs
were not, under Section 9 of the CPSA, reasonably necessary to
protect against an ostensible unreasonable risk. The court
agreed with the plaintiff, holding:
In evaluating the 'reasonable necessity1 for a
standard, the Commission has a duty to take a hard look,
not only at the nature and severity of the risk, but also
at the potential the standard has for reducing the
severity or frequency of the injury....
569 F. 2d at 844.
'Of course, no standard would be expected to impose
added costs or inconvenience to the consumer unless there
is reasonable assurance that the frequency or severity of
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injuries or illnesses will be reduced.1 Id., at 839
(citing H.R. Rep. No. 1153, 92nd Cong., 2nd Sess., 33
(1972)).
As with the Aqua Slide situation, the EPA admits that the
proposed CFC regulations will have little or no environmental
benefit (45 Federal Register 66729).
3. Scope of Proposed Regulation
The ANPR states that the regulation will cover all
chemicals with the following general formula:
CnC1xFyH2n + 2-x-y
where x and y are each greater than zero (0) . (45 Federal
Register 66728) . Under this general formula, EPA plans to
include all alkanes that contain at least one chlorine and one
fluorine atom. The proposed formula is too broad for three
reasons: (1) it includes many CFCs which, were ozone depletion
to occur as predicted, are considered part of the solution and
not the problem; (2) it excludes some non-CFC compounds which,
were ozone depletion to occur as predicted, are greater con-
tributors to stratospheric chlorine than many CFCs; and (3) it
includes even high molecular weight polymeric compounds with no
potential for CFC emissions.
The NAS report on the science of the ozone depletion
theory [NAS, 1979a] was limited to the study of CFC-11 and
CFC-12 and reached no supportable conclusions on the potential
effect on the ozone of other CFCs. In fact, none of the
assessments of potential future stratospheric ozone depletion
has included any CFCs except CFC-11 and CFC-12. Furthermore,
CFC-113, CFC-114, and CFC-115, all included under the Agency's
proposed regulatory formula, have never been studied thoroughly
opposite their potential for stratospheric ozone depletion. And
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CFC-22 has been given only a cursory examination. This was
acknowledged by EPA in the ANPR (45 Federal Register 66728) .
The Agency stated:
"NAS also briefly considered CFC-22 (chlorodifluoro-
methane) but excluded it from analysis because as a par-
tially halogenated compound, its likelihood of reaching
the stratosphere before dissociating is much less than
that of fully halogenated compounds." (emphasis added).
45 Federal Register 66728.
Not only is there little or no evidence to support
including all CFCs in a regulatory formula, but by so attempt-
ing, the Agency will hinder and possibly stop altogether the
development of potential alternatives to those commercial CFCs
theorized to create the greatest risk. For example, CFC-22,
CFC-141b and CFC-142b all show promise as replacements for
CFC-11 and CFC-12 in refrigeration equipment and blowing agent
applications. Due to a different chemical structure, these
three compounds all show less calculated potential than CFC-11
and CFC-12 for stratospheric ozone depletion. However, by
including these in the regulatory scheme, EPA will severely
reduce incentives for conducting the design and development
necessary to make those chemicals viable alternatives to CFC-11
and CFC-12. So long as the potential alternatives are included
in the cap proposal, users will be extremely reluctant to
convert to their use lest those chemicals be more severely
restricted in the future. (See Section VIII and Appendix B for
a more detailed discussion of the research and development of
CFC alternatives).
The second problem with EPA's regulatory formula is
that it excludes some non-CFC compounds which, were ozone
depletion to occur as predicted, are greater contributors to
stratospheric chlorine, and hence potential ozone depletion,
than many CFCs. A good example of this is methyl chloroform.
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With the molecular formula, CH3 CC1, (1,1,1-trichloro-
ethane), methyl chloroform does not fit within EPA's proposed
formula. Yet under a true application of the permit pound
concept (see Appendix G for a detailed discussion of the
relative ranking of compounds by their potential for strato-
spheric ozone depletion the permit pound concept), methyl
chloroform is a greater potential ozone depletor than CFC-22.
The NAS recognized this:
"Atmospheric measurements indicate that methyl chloro-
form is contributing between a quarter and a half as many
chlorine atoms to the stratosphere as are CFC-11 and
CFC-12. If it gains increased usage as a substitute for
other solvents in degreasing and coating operations, it
may well become the largest source of stratospheric
chlorine." [NAS, 1979b, p. 45]
Moreover, information on the potential effect of
methyl chloroform on stratospheric ozone is available from an
EPA sponsored conference [EPA, 1980b] specifically on this
subject.
The third problem with EPA's regulatory formula is
that it includes even high molecular weight polymeric compounds
if they contain any trace of chlorine (as defined, x >0 and n
is unlimited), e.g., fluoropolymers. This is true even though
such materials have no potential for CFC emissions.
Accordingly, the formula proposed by EPA for this
regulation is so broad that its proposal would exceed the
Agency's statutory authority. (The question of regulatory scope
is taken up in more detail in Appendix H).
4. Regulatory Focus
In the ANPR EPA states that the problem associated
with CFCs results from their emissions into the lower atmosphere
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which eventually make their way to the stratosphere (45 Federal
Register 66726). As such, any control features implemented by
the Agency must be designed to eliminate or reduce in some way
CFC emissions. However, lacking from the ANPR's discussion is
any consideration of those CFCs which, although manufactured,
are never emitted into the atmosphere. The most notable example
of this is that portion of CFC-22 production used as a monomer
intermediate in the manufacture of fluoropolymers. These
polymers have a variety of beneficial uses. (See Section
II-J). Because the monomeric CFC used in their manufacture does
not result in any emission, EPA is without authority to include
this use of CFC-22 in any regulation.
By including CFCs used as monomers in a proposed rule,
EPA will have greatly magnified the impact of the regulation.
Not only will the CFC using and producing industries be im-
pacted, but also the fluoropolymers industries manufacturers
and users. Thus, the Agency's regulation will impact the paint
industry (where fluoropolymers are used as dispersants) , the
coating industry (where fluoropolymers are used as coating
insulation for wire and for plumber's tape), the cookware
industry, the hardware and tools industry, the industrial
fabrics industry, and a host of other industries where the
unique characterisitics of fluoropolymers provide excellent
products. Hence, EPA must exclude from regulation those CFCs
which are used as monomers in the manufacture of fluoropolymers.
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C. ECONOMIC DISINCENTIVES REGULATION
In the ANPR, EPA discusses several control options
available to it for regulating CFCs. Several are traditional
"mandatory control" options which include technology-based
controls, as for example, the recovery and recycle of CFCs from
flexible urethane or rigid non-urethane foam production using
carbon absorption techniques, performance standards on solvent
degreasing equipment, conversion to CFC-502 in retail food store
refrigeration and the use of CFC-22 or helium as a test gas in
refrigeration equipment manufacture. Other control options
considered are selected product bans and a use ceiling combined
with a significant new use rule (SNUR).
The Agency also discussed what it calls "economic
incentives regulation". And it is clear from the ANPR and from
subsequent discussions with Agency personnel that some form of
economic incentives regulation is the preferred mode for further
CFC regulation.
Economic incentives regulation, or more appropriately,
economic disincentives regulation, would function by directly
restricting CFC production. The restriction of production would
come via some sort of "cap" on manufacture or on use. As demand
for CFCs outstrips the available supply, the price of CFCs will
rise. As the price rises, firms must decide whether to pay the
higher price of CFCs, to switch to a less attractive alternative,
to better conserve CFCs during use, or, barring ability to do
any of these, to go out of business. According to the Agency,
it is the forced use of these control options which may be avail-
able to companies which makes economic disincentives regulation
so attractive. (45 Federal Register 66730).
However, there are very serious problems attendant to
using economic disincentives regulation. (These problems are
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discussed in detail in Section VII and Appendix I) . Below we
discuss legal concerns with economic disincentives regulation:
1. There is questionable authority under TSCA for EPA to
implement such regulations; and the authority under
the Clean Air Act is not at all clear or unambiguous;
2. EPA has not provided direction as to how it would
implement such a program or how such a program would
operate once implemented. We foresee significant
equitable and implementation issues which must be
addressed in such a program;
3. There are very complicated questions relating to the
economic and competitive impacts of the proposals
which must be resolved before EPA proposes a final
rule.
1. Authority
Section 157 (b) of the Clean Air Act authorizes EPA to
promulgate "regulations for the control" of any chemical which
ostensibly may harm the ozone. It would appear, therefore, that
an economic disincentives approach would be authorized under the
Clean Air Act if it could be considered a "regulation for the
control" of CFCs. However, no cases have been decided under
Section 157(b) and therefore we have no judicial interpretation
which would shed any light on this issue. The relevant legisla-
tive history, however, indicates that Congress did not intend to
limit EPA to traditional mandatory control technology when
implementing regulations to protect the stratosphere. See H.
Rep. No. 95-294, supra, at 102, n. 2.
Under Section 6 of TSCA, once the requisite finding of
unreasonable risk is made (which, as noted above, cannot be made
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in this case) , EPA may then choose among the following
regulatory options:
1. A ban on manufacturing;
2. A limitation on the amount manufactured;
3. A ban or limitation on manufacture of the chemical for
a particular use;
4. A requirement to label the chemical and instruct
customers of possible health hazards;
5. A requirement that manufacturers maintain records of
manufacture and process;
6. A prohibition on any method of use of the chemical;
7. A prohibition on any method of disposal; and
8. A requirement that manufacturers give notice to
distributors and to the public of unreasonable risk
associated with the chemical.
To be lawful, any economic disincentives regulation
must fall under one of the above eight categories. In addition,
any regulatory options under TSCA must be the least burdensome
of the above options, but the option shall nonetheless be
sufficient to "protect adequately against such [unreasonable
risk]".
Since economic disincentives regulation is essentially
a limitation on the amount manufactured or used, a "cap" could
conceivably fall under option No. 2 or No. 3 of the above
eight. However, the cap, as proposed in the ANPR, is also a
quota. Earlier draft bills of TSCA specifically authorized EPA
to set quotas for regulating chemicals. Significantly, these
provisions for a quota were deleted from the final bill. TSCA,
therefore, does not provide explicit authority for EPA to impose
quotas, and Congress1 deletion of the authorization for a quota
from the final bill could mean that they did not intend for EPA
to have the authority.
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It is interesting to note that the provision in the
Senate bill providing for the establishment of quotas was
removed at the recommendation of the EPA itself:
Another difficulty we have with [the Senate bill]
concerns the requirement that the Administrator provide
for the assignment of quotas in any regulation limiting
the amount of a substance which may be manufactured,
imported, or distributed. The mandatory requirement of a
quota system would make the regulatory process vastly more
cumbersome and difficult to administer. Thus, we recommend
that the quotaprovisionBedeleted. The act already
provides that when it is necessary to adopt a rule with
respect to a chemical substance to protect against an
unreasonable risk, the Administrator shall select the
least stringent requirement practicable, consistent with
protection of health and the environment. In our view,
restrictions limiting the amount of a substance that may
be manufactured would be the most stringent requirement,
other than a total ban, and the establishment of quotas
would seldom be necessary. Nevertheless, we strongly
recommend against becoming involved in the establishment
of quotas Tor various manufacturers, even in such limited
situations. (emphasis added).LetterfromJohnRT
Quarles, Jr., Acting Administrator of EPA, to Sen. Warren
G. Magnuson, Chairman of the Senate Committee on Commerce,
June 23, 1975, reprinted in BNA, The Legislative History
of the Toxic Substances Control Act, at 367.
Though this letter from Administrator Quarles was
referring to TSCA, its rationale and logic are equally appli-
cable to EPA's authority under the Clean Air Act. A quota would
make the regulatory process as cumbersome and difficult to ad-
minister under the Clean Air Act as it would under TSCA. And
the recommendation against becoming involved in the establish-
ment of quotas under TSCA is equally compelling to becoming
involved in the establishment of quotas under the Clean Air Act.
Aside from the legal questions of whether EPA has the
authority to implement economic disincentives regulation, there
are other very serious legal problems surrounding the whole
concept of this sort of regulation. One such problem is with
the "permit pound concept" as described in the ANPR.
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The permit pound concept involves a complex series of
calculations designed to establish a system which would allow
those CFCs considered by the Agency to have the greatest
potential for ozone depletion to be more heavily regulated than
those with less potential for depletion. EPA's calculations
allow that for every pound of one CFC (CFC-11) that can be
manufactured or used, up to 5.6 pounds of different CFCs may be
manufactured or used. The relative ranking advanced by EPA is
correct. However, the absolute values assigned by EPA are in-
correct and misleading as to the relative depletion potential of
the various CFCs, and reflect the Agency's basic lack of knowl-
edge about the ozone depletion potential of CFCs other than
those specifically studied by the NAS. (See Appendix G for a
more detailed discussion of the permit pound concept).
As noted earlier, EPA is without statutory authority
to regulate CFCs based on the current state of scientific
knowledge. And, if evidence validating the theory is obtained,
EPA is without authority to regulate any CFC other than CFC-11
and CFC-12. However, should EPA persist in this regulation and
should it persist in including in the regulation CFCs other than
CFC-11 or CFC-12, it must consider implementing some form of the
permit pound concept. But the Agency must use a more accurate
permit pound ranking. (See Appendix G for a more accurate
ranking).
2. Implementation and Operation
There are also legal questions surrounding the design,
implementation and operation of an economic disincentives
regulation as outlined in the ANPR.
According to the Agency's ANPR, economic disincentives
regulation would be implemented by means of a "cap", either
directly on CFC users or on CFC producers. That is, the Agency
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would place a ceiling on the total amount of chlorofluorocarbons
that may be used by an individual CFC user, or on a total amount
that may be produced by a producer.
The Agency outlined two different methods of distri-
buting the rights to available CFCs under a "cap". One is by
direct allocation to the users and producers. The second is by
means of an auction, whereby permits to produce or use CFCs are
auctioned by the government to the highest bidder. EPA will
encounter serious problems with both approaches.
a) Direct Allocation. Under a direct allocation
program, EPA would be required to promulgate a TSCA Section 8 (a)
rule or use some other information gathering tool to gain data
from the CFC producing and CFC using firms. This data would
then be used to establish a government allocation system. In
the ANPR, EPA discusses production as the benchmark by which
this allocation will be made. EPA must also consider whether it
would be more equitable to use another factor such as production
capacity, total investment in CFCs, or some other measure by
which to determine an allocation program.
A direct allocation program will essentially
freeze producers' or users' market shares to the historical base
used in the allocation program. How will the Agency justify the
freezing of market shares perhaps the most drastic form of
market interference available to the government?
Another problem with a direct allocation program
concerns new entrants into the market. How does the Agency
propose to deal with them? Will it take one company's produc-
tion or use rights from it and give them to the new entrant? On
what basis will this determination be made? Will the Agency
allow new production or use rights for the new entrant? Or, as
yet another alternative, will EPA merely allow the new entrant
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to purchase rights from existing companies? The Agency must
provide guidance to the industry on this issue.
EPA must also consider the problem of a company
dropping out of the market. What will happen to the drop-out's
production or use rights? Will they be redistributed among the
existing producers or users? On what basis will this be done?
Will the withdrawing company be permitted to sell its leftover
rights? If so, will that sale be binding on the government
during the next round of distributing CFC rights? Or suppose a
company has a major problem (such as a plant breakdown) and is
unable to produce all of its allocation. Will it be entitled to
carry over its production rights until the next permit period?
Finally, under a direct allocation program EPA
must consider the length of time a distributed production or use
right will be effective. To allow for rational planning,
businessmen will need a minimum of ten years. If it chooses a
shorter time span, EPA must explain why its choice is preferable,
legally and economically, over one which minimizes the impact on
business planning.
b) Auction. A second option to EPA is the auctioning
of available CFC production or use rights. Under such an
auction EPA would establish a limited quantity of CFC rights and
sell them to the highest bidder. At this auction, only producers
could be invited, only users, or both producers and users,
depending on the system EPA sets up. The price EPA would obtain
for the rights would be the highest price it could possibly
obtain. The price would therefore reflect what businesses
thought it was in their own economic interest to pay for the CFC
rights.
We note first of all that a true auction, where
the price paid for the CFC right is a reflection of the
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businessman's profit incentives, would be unlawful under the
Independent Office Appropriation Act (31 U.S.C. §483a (1970))
and cases decided under it.
There are other legal problems attendant to an
auction. How often would the auction be held? Will it include
foreign companies as well as U.S. companies? An auction would
create property rights in the permits auctioned off. A question
arises as to who owns these permits. Does the government own
them? Do the producers own them? Do the users own them? If
the government owns them, will this constitute a taking without
due compensation in violation of the Fifth Amendment? What will
EPA do with the money it receives in an auction? How will the
Agency monitor participation at the auction? As with a direct
allocation program, these questions on the auction must be
answered before EPA proposes a formal rule.
EPA must also consider that a futures market may
develop for auction permits. If such a market does develop, how
will EPA deal with it? Will it require registration with the
Securities and Exchange Commission? Will it be subject to
coverage under the 1933 and 1934 Securities Acts? What is the
nature of this coverage? If it is not subject to such coverage,
will it be subject to scrutiny under another securities law? Is
the creation of a futures market with the potential for attrac-
tion of non CFC-producer or user speculators consistent with the
premise that the auction will allow the more essential users to
obtain required amounts of CFCs? These are all questions which
EPA must answer in a proposed rule.
In addition, there is no guarantee that under a
cap those industries in which CFCs are essential will get all
the product they need. The Agency merely assumes that the
essential industries will be able to afford the higher prices
for CFCs. Yet, EPA provides no support for its assumption, nor
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has it analyzed the price elasticity for the various uses to
determine if the assumption is valid. For example, has EPA
considered the national security implications of CFC regula-
tion? CFCs are used in a variety of ways in our national
defense effort, for example, in cleaning of missile guidance
systems. Has the Agency considered a means of assuring con-
tinued availability of CFCs to the defense industries, parti-
cularly if it turns out that those industries cannot obtain what
they need, when it is needed?
3. Competitive Impacts
As the largest domestic producer of CFCs, Du Pont is
quite concerned about the potential for anticompetitive effects
from economic disincentives regulation. EPA may not dismiss
these concerns. Economic disincentives regulation on the scale
being proposed by EPA may force a disruption in the marketplace
in a way never seen before by American business.
As mentioned earlier, under a direct allocation system
there is a problem in distributing production or use rights to
any potential new market entrant. In its ANPR, EPA states that
it will handle this by allowing existing producers or users to
sell their shares to new entrants (45 Federal Register 66730).
Guidelines from EPA are needed to insure that such a system
would operate equitably. Further, under such a system a means
to adequately compensate producers who would be required to
decrease production would have to be established.
Under an auction system, would non-CFC producing or
using companies be allowed to purchase permits and thereby
disrupt the planning of the CFC industry? What factors will EPA
consider in balancing the benefits of competitive bidding, while
at the same time insuring that existing producers and users of
CFCs are able to obtain and utilize allowed CFC production most
efficiently?
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A further problem with a cap and its accompanying
artificial shortage is that spot shortages of CFCs are likely to
arise. Has the Agency considered a way to handle spot shortages,
especially if a critical industry is affected? Under a no
growth in demand market, businesses would not be likely to
maintain excess capacity. Thus, the problem of spot shortages
would become very real if no excess in capacity is maintained.
EPA should provide an incentive for the maintenance of suffi-
cient capacity and should establish procedures for any short-
term increase in CFC capacity needed to meet essential demands.
EPA must also be aware of the antitrust decree to
which the five producers are now subject. This decree provides,
among other things, that:
a. Each CFC manufacturer is required to sell to anyone
who is engaged in the business of reselling refri-
gerant gas and who satisfies the manufacturer's
customary credit requirements.
b. In the event a manufacturer has insufficient refri-
gerant to supply all resellers who seek to purchase
the refrigerant, the manufacturer "shall, in such
circumstances, determine unilaterally and without
consultation with any other [manufacturer] or any
groups of purchasers of refrigerant gas, in a manner
in which demand shall be met on a basis of any
allocation, reasonable and equitable under all the
circumstances ...."
This decree, of course, will have a very substantial impact upon
any governmentally-imposed allocation system. It directly
limits a producer's discretion in designing his own system to
allocate scarce refrigerant gas. This decree runs contrary to
any allocation system which would be designed by EPA to imple-
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ment an economic disincentives regulation. Has EPA consulted
with the Department of Justice on this issue and on other issues
raised in the comments to determine the scope of its authority
in regard to these sensitive areas of its regulatory proposals?
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D. RULEMAKING PROCEDURES
An ANPR is a relatively new procedure of administra-
tive law. It is designed to allow the Agency to solicit
comments in a forum where the Agency has not yet committed
itself to one particular regulatory action. Since an ANPR is
essentially an information-gathering tool, extensive rulemaking
procedures need not be followed before publishing one. However,
before EPA publishes a proposed rule, there are certain
procedural requirements it must follow. Many of these are
outlined below.
1. General - Clean Air Act
Section 307 (d) of the Clean Air Act, which applies to
subtitle B of subchapter I (relating to stratosphere and ozone
protection), as noted in Section 307(d) (1) (h) , requires publica-
tion of a notice of proposed rulemaking, accompanied by a
statement of basis and purpose. This statement of basis and
purpose must, at a minimum, include a summary of:
a. The factual data on which a proposed rule is based;
b. Methodology used in obtaining the data and in
analyzing the data; and
c. The major legal interpretations and policy
considerations underlying the proposed rule.
This statement must also contain a summary of the findings,
recommendations and comments of EPA's scientific review
committee and the National Academy of Sciences. If EPA's
proposed rule differs in any important respect from the
recommendations of these scientific bodies, an explanation of
the reason for such differences must be included in the
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statement. All data, information and documents referred to and
relied upon by the Agency shall be included in the docket as of
the date of publication of the proposed rule. The docket should
begin with the publication of the ANPR and should include all
documents underlying it. The docket should also include all
comments on the ANPR which the Agency receives as well as
letters from Congress and from other interested citizens
concerning EPA's proposed Phase II regulation.
During rulemaking, EPA must afford interested parties
the opportunity for the oral presentation of data, views and
arguments in accordance with Section 307(d)(5) and must keep
such oral record open for thirty (30) days after the hearing to
allow an opportunity for submission of rebuttal and supplementary
information. Implicit in this is the opportunity for any
interested party to cross-examine any witness.
2. General - Toxic Substances Control Act
Under Section 6(c) of the Toxic Substances Control Act
(TSCA), before EPA may issue a proposed rule, it must publish a
statement with respect to:
a. The effects of CFCs on health and the magnitude of
exposure of human beings to CFCs;
b. The effects of CFCs on the environment and the
magnitude of the exposure of the environment to
CFCs;
c. The benefits of CFCs for the various uses and the
availability of substitutes for such uses; and
d. The reasonably ascertainable economic consequences
of the rule, after consideration of the effect on
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the national economy, the environment, and public
health.
EPA's proposed rule must contain the following information:
a. A draft finding that there is a reasonable basis
to conclude that the manufacture, processing,
distribution in commerce, use or disposal of CFCs,
or any combination of such activities presents or
will present an unreasonable risk of injury to
health or the environment; and
b. A document which states with particularity the
reasons for the proposed rule, together with a
statement of why the proposed rule protects
adequately against the risk(s) involved using the
least burdensome requirements authorized by TSCA.
40 C.F.R. &750.2.
In light of the "international motivation" of EPA's
pending regulation, and the fact that unilateral action by the
United States will have little or no measurable environmental
benefit, EPA must explain why a cap or other regulation "ade-
quately protects against the risk" involved, and why adoption of
the Assessment and Surveillance strategy is not a viable alter-
native. The Agency must set forth its reasons for regulating,
and if the reason is stimulation of foreign regulation, EPA must
explain why stimulation of foreign regulation is a proper
motivation for regulation in this country.
And finally, the proposed rule must contain a state-
ment with respect to the four issues mentioned in Section 6(c)
of TSCA, i.e., the effects of CFCs on health, the effects of
CFCs on the environment, the benefits of CFCs for the various
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uses and the availability of substitutes for these uses, and the
reasonably ascertainable economic consequences of the rule after
considering the national economy, small business, innovation,
the environment and public health. The proposed rule must also
contain an analysis of the impacts of alternative courses of
regulatory action. 40 C.F.R. &750.2.
If the Administrator of EPA decides to proceed with
Phase II regulation under TSCA instead of the Clean Air Act, it
must in the proposed rule include a brief statement describing
such findings. This statement must discuss, at a minimum:
a. All relevant aspects of the risk;
b. A comparison of the estimated cost of complying
with actions taken under TSCA and under the Clean
Air Act; and
c. The relative efficiency of actions under TSCA and
the Clean Air Act to protect against the risk.
40 C.F.R. &750.2(5).
These statements may be combined in the same narrative
for efficiency of exposition, but they must contain a discussion
of the factual, analytical, policy and legal considerations
behind the Agency's decision to issue the proposed rule in the
form chosen. All factual materials and each analytical metho-
dology seriously considered shall be fully disclosed. Signifi-
cant areas of uncertainty known to the Agency under each heading
shall be identified and the manner in which the Agency intends
to deal with them shall be specified.
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In light of the substantial uncertainties surrounding
the ozone depletion theory, EPA must address in its proposed
rule the research projects it has undertaken to help resolve
some of the uncertainties. Compliance with the research
provisions of the Clean Air Act may suffice in this respect.
This is discussed in Section 3 on the next page.
Under TSCA, EPA must in its proposed rule provide for
an informational hearing at which any person may submit oral
comments. This hearing shall come not less than two weeks after
close of the public comment period. Under Section 6(c)(3) of
TSCA, if there are disputed issues of material fact which will
require resolution, as is certainly the case when dealing with
the highly uncertain ozone depletion theory, EPA is required to
allow cross-examination of witnesses. This is necessary for a
full and true disclosure with respect to the controversial ozone
depletion theory.
Finally, any rulemaking docket in any proposed rule
must contain the results of the additional research which EPA
must conduct in accordance with the Clean Air Act (discussed
below) and the results of the further economic and regulatory
impact studies which EPA must do (discussed below).
3. Research
A reading of part B, subchapter I, of the Clean Air
Act amendments leaves one deeply impressed with the Congres-
sional concern that the stratospheric ozone problem be researched
thoroughly. Both the statute itself and its legislative history
indicate quite clearly that EPA is commanded to look at the
stratospheric ozone problem more broadly than just the potential
effects of CFCs. For example, in Section 150 of the Act, the
Congressional Declaration of Purpose, Congress delineated four
purposes in passing the Clean Air Act amendments relative to the
stratosphere:
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a. To provide for a better understanding of the
effects of human actions on the stratosphere,
especially the ozone in the stratosphere;
b. To provide for a better understanding of the
effects of changes in the stratosphere, especially
the ozone in the stratosphere, on the public
health and welfare.
c. To provide information on the progress of regula-
tion of activities which may reasonably be antici-
pated to affect the ozone in the stratosphere in
such a way as to cause or contribute to endanger-
ment of the public health or welfare.
d. To provide information on the need for additional
legislation in this area, if any.
The legislative history echoes this general concern for the
stratosphere as a whole, and not just the effects CFCs may have
on it:
[It] should be pointed out that the strato-
spheric ozone layer is also threatened by other sub-
stances [than halocarbons]. Of course, the prob-
lem of emissions of pollutants from high flying air-
craft is well-known. There could also be ozone deple-
tion caused by: bromine compounds, other sources of
chlorine than halocarbons, or oxides of nitrogen from
fertilizers or combustion of fossil fuels. H. Rep.
No. 94-1175, 94th Cong., 2nd Sess., at 76.
While it is true that halocarbons (halocarbons is a
term which includes, but is not restricted to, CFCs) were in-
cluded in the potential problems listed by Congress, it is clear
that EPA was directed to study the issue broadly.
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Other sections of part B of the Clean Air Act amend-
ment confirm this Congressional concern. For example, in
Section 153(a), EPA is directed to study the effects not only of
fluorocarbons on the ozone, but also of:
a. The release into the ambient air of other sources
of chlorine;
b. The uses of bromine compounds; and
c. The emissions of aircraft and aircraft propulsion
systems employed by operational and experimental
aircraft.
Section 153(a) further directs EPA to study any
physical, chemical, atmospheric, biomedical or other research
and monitoring data which may be necessary to ascertain any
direct or indirect effects upon the public health and welfare of
changes in the stratosphere, especially ozone in the
stratosphere.
Under Section 153(b), EPA is required to undertake
research on:
a. Methods to recover and recycle substances which
directly or indirectly affect the stratosphere,
especially ozone in the stratosphere;
b. Methods of preventing the escape of such
substances;
c. Safe substitutes for such substances; and
d. Other methods to regulate substances, practices,
processes, and activities which may reasonably be
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anticipated to affect the stratosphere, especially
ozone in the stratosphere.
Section 153 (d) requires EPA to direct the National
Academy of Sciences to study, not just CFCs, but the effects of
all substances, practices, processes and activities which may
affect the stratosphere, especially ozone in the stratosphere.
Under Section 154, EPA is directed to receive infor-
mation from the National Oceanic and Atmospheric Administration
on detection of changes in the stratosphere and the climatic
effects of such changes. Section 154(b) requires EPA to obtain
from the National Aeronautics and Space Administration infor-
mation on the physics and chemistry of the stratosphere for
early detection of potentially harmful changes in the ozone in
the stratosphere. Section 154(c) directs EPA to ask the
National Science Foundation for information which will increase
scientific knowledge of the effects of changes in the ozone
layer in the stratosphere upon living organisms and ecosystems.
Section 154 (d) requires EPA to obtain information from the
Department of Agriculture which will increase scientific
knowledge of the effects of changes in the ozone in the
stratosphere upon animals, crops and other plant life. Section
154(e) requires EPA to obtain information from the Department of
Health and Human Services (formerly the Department of Health,
Education and Welfare) which will increase scientific knowledge
of the effects of changes in the ozone in the stratosphere upon
human health.
It would have been helpful for EPA to have discussed these
studies in the ANPR. At this time, it would be beneficial for
the Agency to publish a supplement to the ANPR discussing these
studies. This supplement could also explain how these reports
were used in EPA's decision-making process.
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And very importantly, Section 156 requires EPA, in
conjunction with the President, to undertake to enter into
international agreements to foster cooperative research which
will complement or augment studies or research done in this
country.
To date, EPA's compliance with these various sections
of the Clean Air Act has been notably inadequate. The Agency
has received studies only on CFCs and those studies have been
flawed, as discussed in Section IV and Appendices E and F.
There have been no thorough studies on the effects
other chlorine-containing compounds may have on the ozone. The
Agency has done insufficient research on methods of recovery and
recycling CFC emissions; they have done insufficient research on
methods of preventing the complete emission of CFCs; the
Agency's research on substitutes for CFCs has been woefully
inadequate. Indeed, if EPA had done adequate research on sub-
stitutes, it would have realized that many are harmful chemicals
and the harm resulting from them is more immediate to persons
potentially exposed than is the harm theorized to result from
CFCs.
The Agency's international activities have concen-
trated on proclaiming the issue resolved and underscoring the
need for regulation. There has been little or no effort by EPA
to obtain an international consensus on the science or an inter-
national resolution to conduct more research to more completely
resolve the scientific uncertainties, as required under Section
156. Accordingly, before EPA may publish a proposed rule, it
must undertake efforts to obtain international resolution of the
science so that it will have before it a more complete data base
upon which to make responsible regulatory decisions.
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4. Economic and Regulatory Impact Analyses
As noted earlier, EPA's preferred form of regulation
is an economic disincentives approach, i.e., an allocation or
auction of production or use rights in conjunction with a cap on
CFC production or a cap on CFC use. Because such a system is an
untested form of regulation, its effects upon the economy and
individual businesses are extremely difficult to predict at this
time. Therefore, EPA must conduct an extensive and detailed
economic analysis to help answer, among others, the questions
posed throughout these comments.
In particular, EPA must study how a cap would be
implemented and how a cap would operate under practice. Vague
generalities in the ANPR are insufficient. In addition, EPA
must also conduct an analysis of the long-range impacts of a
cap, both in terms of impacts upon the economy and in terms of
impact upon the affected industries. These requirements in
Sections 157 and 317 of the Clean Air Act, and in Section 6 of
TSCA, are discussed in more detail below.
a) Clean Air Act
Section 157 of the Clean Air Act requires EPA to "take
into account the feasibility and the costs" of regulations
promulgated under its authority. The legislative history
elaborates on this requirement:
By [requiring EPA to take into account the feas-
ibility and costs of regulation, Congress] intends
to assure that any such [regulation] is undertaken
only with adequate awareness of its costs and its
other economic impact and social impacts. This
informal awareness is necessary for [EPA] in
determining what combination of stratospheric pro-
tection measures are most appropriate. (emphasis
added) H. Rep. No. 94-1175, 94th Cong., 2nd Sess., at
81.
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The language of the bill which House Report No. 94-1175
accompanies, H.R. 10498, (referring to EPA's requirement to
consider the feasibility and costs of regulation) was adopted in
toto in the bill finally passed by Congress and signed by the
President.
Thus, Section 157 requires not only an economic impact
analysis designed to allow more informed decision-making on the
part of EPA and more informed participation by the public, but
also an analysis of the social impacts of CFC regulation. The
social impacts cannot be underestimated. CFCs touch the life of
every American. Despite the Agency's assertions to the con-
trary, regulation will affect some very basic elements of
American life, such as refrigeration and air-conditioning.
Given EPA's long-term goal to cut CFC production by 50-70%
[Jellinek, 1980a] , it is likely that in the near future U.S.
citizens may have to do without some of the luxuries and even
necessities we have come to enjoy in the twentieth century.
Hence, EPA's Section 157 "feasibility and costs" analysis must
include an analysis of the social impacts the regulation will
have upon American life. This requirement of a social impact
study is reinforced in other sections of the relevant laws.
(See e.g., Sections 2 (c) and 6 (c) (1) of TSCA.)
Section 317 of the Clean Air Act requires EPA to
conduct an economic impact assessment before publication of the
proposed rule, and this assessment must be made part of the
public record. Included in the assessment must be an analysis
of:
1. The cost of compliance, and the cost of
alternative regulations (one alternative is no
regulation at this time);
2. The inflationary or recessionary potential of
regulation;
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3. The effects on competition with respect to small
business;
4. The effects on consumer costs; and
5. The effects on energy use.
The importance of the Section 317 economic impact analysis
cannot be overstated. It strikes at the very heart of the
essential nature of CFCs and at the reasons CFCs present no
unreasonable risk to health or the environment. One does not
have to be an economist to recognize that as CFC prices rise,
inflationary pressures on the economy will result. The smaller
businesses which cannot afford the higher costs of CFCs will be
forced out of business. Consumers will have to pay higher
prices for those articles which contain CFCs. (These issues and
others are discussed in more detail in Section VII Economic
Considerations and Appendix I) . The economic impact studies
are important also because of the revolutionary, landmark form
of regulation EPA is planning to adopt. Were the economic
studies incompletely done and the impacts of the proposed
economic incentives regulation not fully appreciated, EPA could
cause a great deal of unintentional harm to the U.S. economy.
Finally, CFCs are great energy savers. Their
regulation will result in what at times may amount to drastic
energy penalties. (See Appendix C for details on the energy
penalty, and Section II Uses and Essentiality for a
discussion of the energy saving properties of CFCs).
It is pertinent to note that the recent Department of
Energy (DOE) energy saving guidelines [DOE, 1980] demand an
increase in the use of CFCs. Energy conservation is, of course,
a high priority national concern. The DOE's requirements
guidelines run contrary to EPA's proposed CFC regulation. The
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conflict between the two is very real. Given the Agency's
long-term strategy to cut CFC production by 50 to 70 percent,
there can be no denying that CFC regulation will result in a
substantial energy penalty. EPA merely assumes that those
industries with the most energy efficient use of CFCs will be
able to pay the higher price for CFCs. Yet without having done
a price elasticity study of the CFC-using industries, EPA cannot
support its assertion. EPA must, therefore, as part of its
social and economic impact analysis, quantify the energy penalty
from CFC regulation and must explain how this penalty is offset
by benefits of at least a comparable magnitude.
We again emphasize the importance of the Section 317
analysis containing an assessment of the social impacts of CFC
regulation. It must be made clear to the public exactly what
they are giving up in return for this ostensible protection of
health and the environment. Congress's purpose in adopting
Section 317 was:
to assure that the Administrator and the public
would have before them adequate analyses of the
economic impacts of alternative courses of action
or inaction under the Act. The availability of
such information is expected to help shape wiser
policy and to permit the public to participate in
rulemaking in a more informed and effective way.
H. Rep. No. 95-294, 95th Cong., 1st. Sess. at 51
(1977).
The American people must be made aware of the cost of CFC
regulation.
b) Toxic Substances Control Act
Section 6(c) and (d) of TSCA requires EPA to consider
the benefits of CFCs, the feasibility of substitutes, and the
economic impact of CFC regulation. In particular, EPA must
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study the feasibility and the consequenses of using substitutes
for CFCs. TSCA Section 6(c) and (d) also direct EPA to consider
the impacts CFC regulation will have on small business and on
technological innovation. Furthermore, Section 2(c) requires
that EPA consider the economic and social impact of any action
the Agency takes. Again, as in Section 317 of the Clean Air
Act, the requirement of a social impact analysis - of how
regulation will affect American life - is required.
There are other regulatory impact analyses which EPA
must conduct. Some of these are discussed below.
c) Executive Order 12044
Under Executive Order 12044, signed by the President
on March 23, 1978, and appearing in 43 Federal Register 12661,
EPA is required to conduct a regulatory impact analysis of CFC
regulation. Under 12044, CFC regulation must be designed in
such a way so as not to impose unnecessary burdens on the
economy, on individuals, on public or private organizations, or
on any state or local government. To comply with Executive
Order 12044, EPA must publish a statement which contains, at a
minimum, findings that:
1. The proposed regulation is needed;
2. The direct and indirect effects of the regulation
have been adequately considered;
3. Alternative approaches to the regulation have been
considered and the least burdensome of the
acceptable alternatives has been chosen; and
4. Public comments are being considered and an
adequate response has been prepared.
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In addition, the regulation must be written in plain
English and must be understandable to those who must comply with
it. It must contain an estimate of the new reporting burdens
necessary for compliance with the regulation and it must contain
a plan for evaluating the regulation after its issuance.
The statements must also include an analysis of the
effects regulation will have on competition, and a detailed
explanation of the reasons for choosing one method of regulation
over others. In conclusion, EPA must explain why CFC regulation
is necessary, in light of its negligible environmental impact,
and why stimulation of foreign regulation is an appropriate goal
of U.S. regulation.
d) Regulatory Flexibility Act
EPA must also conduct an impact analysis in compliance
with the recently passed Regulatory Flexibility Act, Public Law
96-354. The regulatory impact analysis required by this Act
must include, at a minimum:
1. A description of the reasons why action by the
Agency is being considered;
2. A succinct statement of the objectives of, and the
legal basis for, the proposed rule;
3. A description of, and an estimate of, the number
of small entities to which a proposed regulation
will apply;
4. A description of the proposed reporting, record-
keeping and other compliance requirements of the
proposed rule, including an estimate of classes of
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small entities which will be subject to the
requirement and type of professional skills
necessary for the preparation of the report or
record; and
5. An identification, to the extent practicable, of
all relevant Federal rules which may duplicate,
overlap or conflict with the proposed rule.
The regulatory impact analysis must also discuss any
significant alternatives to the proposed rule which would
accomplish the objectives of the underlying statute but which
would minimize any "significant economic impact" of the proposed
rule. This analysis of the alternatives must include, at a
minimum, whether the Agency should consider:
1. The establishment of differing compliance or
reporting requirements for small entities;
2. The clarification, consolidation and simplifica-
tion of compliance and reporting requirements for
small entities;
3. The use of performance rather than design stan-
dards ; and
4. The possible exemption from the rule of small
entities.
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E. CONCLUSION
It is clear from this section that further CFC regulation
at this time is neither appropriate nor supportable. Not only
has EPA failed to fulfill its legal responsibility before
regulating, but regulating such an essential chemical in the
face of uncertain science is unwise policy. Moreover, the type
of regulation EPA is contemplating has been neither well thought
out nor well conceived. Before any proposed rule can issue,
there must be substantial additional studies and research done
to support such an action.
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IV. THE SCIENCE
A. INTRODUCTION 2
B. THE CHLOROFLUOROCARBON/OZONE DEPLETION THEORY 7
C. OZONE MEASUREMENTS AND OZONE TREND ANALYSIS 15
D. EPA'S ANPR ASSESSMENT OF THE THEORY 22
E. PRESENT STATUS OF THE THEORY 32
F. RESOLUTION OF UNCERTAINTIES 51
G. SUMMARY 56
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A. INTRODUCTION
The Chlorofluorocarbon/Ozone Depletion Theory postulates
that CFCs, which are emitted to the atmosphere after use in a
variety of applications, are eventually transported to the upper
atmosphere (stratosphere). The high stability of the compounds
has been assumed to preclude reaction in the lower atmosphere
(troposphere). At higher altitudes, however, the intensity of
ultraviolet light increases and the compounds are broken down by
photolysis, presumably releasing chlorine atoms. Chlorine is
involved in the very complicated series of reactions comprising
stratospheric chemistry. Those reactions include one pair which
constitutes a cycle by which chlorine can catalyze the
destruction of ozone (a form of oxygen). Ozone shields the
surface of the earth from ultraviolet radiation which might lead
to deleterious effects if the amount reaching the earth's surface
were significantly increased (see Section V). Other chemical
reactions lead to temporary "holding tanks" for chlorine and to
removal from the stratosphere.
Scientists have developed computer programs to model the
processes involved in order to estimate the net effect of CFCs.
The models are used to calculate the time-varying chemical com-
position of the atmosphere. The results are then often compared
with actual measurements of the concentration of various chemical
species at different vertical and horizontal locations. The use
of models to "predict" the effect of CFCs on ozone has been
accepted widely because ozone depletion, if it occurs, is a slow,
gradual process extending decades into the future. Accordingly,
any change or trend in ozone over the near-term would be small
and, presumably, difficult to detect.
Most models used to calculate or simulate the atmosphere
are one-dimensional (1-D). In such a model, the earth's atmo-
sphere is averaged and the only movement of chemical species in
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the model is in the vertical direction. 1-D models are limited
inherently by their treatment of atmospheric dynamics, their
inability to deal with seasonal atmospheric variations, and other
simplifications of the atmosphere during their construction.
Accordingly, it is essential to verify that measured and
calculated profiles of chemical species agree in the present-day
atmosphere to give assurance that any assumptions and simplifi-
cations incorporated into the model do not distort reality.
By its very nature, the theory is a rapidly changing
compilation of state-of-the-art science. The relatively young
field of atmospheric science is hard-pressed to eliminate the
many large uncertainties involved. Nonetheless, the potential
for significant changes in the amount of ozone has prompted the
Environmental Protection Agency to consider further regulation of
CFCs in addition to the 1978 ban on the use of CFCs as aerosol
propellents. Justification is cited as the 1979 assessment of
the science by the National Academy of Sciences [NAS, 1979a].
Unfortunately, this assessment came during a period of rapid
changes in the science, which continues to develop at a very fast
pace. Current assessments indicate a large decrease in calcu-
lated potential effects, and continue to emphasize the many
uncertainties underlying the issue.
In the following discussion of the science, we first
provide an historical review of the theory and the several
scientific assessments which have been done. Next, we present a
detailed discussion of an area which has been consistently
overlooked by EPA and which argues strongly and convincingly
against the need for immediate regulatory action-the real-world
experimental information provided by over 20 years of ozone mea-
surements.
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Unlike the theoretical treatment provided by models,
available measurements provide a record of 'actual ozone concen-
tration. Statistical analysis of this record is capable of iden-
tifying even very small (increases or decreases) in the average
ozone concentration. The use of these analyses as an early
warning of actual changes in ozone provides the ideal complement
to the theoretical treatment in the models, and permits continued
investigation of the theory in the absence of detectable change
in ozone concentrations. The sensitivity of the technique
provides confidence that changes, if they occur, will be detected
sufficiently early to allow for effective responses by the
appropriate governmental bodies. Even allowing for the
calculated "overshoot", before any potential ozone changes were
reversed, potential effects of ozone change can (even if the
theory proves to be correct) be limited to very small levels.
The importance of such an early warning system cannot and should
not be underestimated.
As noted above, the science of the atmosphere is rapidly
evolving, and contains major uncertainties. Therefore, following
the discussion of ozone measurements, we present an analysis of
the approach to the science chosen by EPA in its Advance Notice
of Proposed Rulemaking. The theory is inadequately and often
inaccurately discussed. Uncertainties and caveats concerning
these uncertainties are downplayed or ignored. The progress of
"Overshoot" is the term applied to the theoretical maximum ozone
depletion calculated by the models to occur after CFC emissions
cease. The theory assumes that CFCs already present in the
lower atmosphere at the time emissions were to cease would still
be transported to the stratosphere, causing ozone depletion to
increase to a peak value before slowly returning to normal
levels. This peak value is calculated to be about 1.5 times any
existing ozone depletion at the time CFC emissions cease.
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the science beyond that included in the NAS report is entirely
neglected, treating one of the most active years of recent
research as if it were unimportant.
The EPA view is then contrasted, with a discussion of
recent developments and the remaining key uncertainties in the
theory. These uncertainties were consistently deemphasized or
underestimated by the NAS, and virtually ignored by the EPA.
A variety of recent evidence suggests that CFCs may not,
in fact, be completely transported to the stratosphere with no
destruction in the lower atmosphere. Any destruction represents
a decrease in ozone depletion from that currently calculated by
atmospheric models. The transport mechanisms themselves are not
well understood and are treated only in an empirical fashion in
atmospheric models. Yet calculated ozone depletion is sensitive
to the rate and mechanism of transport.
Stratospheric chemistry is also critical to the theory.
As an example, recent reaction rate changes alone reduce esti-
mates of calculated depletion to about half that reported by the
NAS. Those changes represent large advances in our knowledge,
but at the same time have greatly magnified perceptions of the
inherent uncertainty in model results.
Finally, we show that the models themselves are sources
of uncertainty. Previous assessments have relied almost
exclusively on one-dimensional models which neglect known
atmospheric variations with latitude and season of the year.
Further, the models have been largely restricted to consider the
CFC effect in isolation from other current changes, such as
increases in carbon dioxide (C02) When tested against other
known perturbations, such as volcanic eruptions, the models fail
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to duplicate measured effects. Furthermore, the models do not
calculate an accurate picture of the present stratosphere. Major
discrepancies remain even in the most up-to-date treatments, and
these discrepancies involve the chlorine species which are of so
much current concern.
Even in the extensive discussions below, many points may
not be discussed in sufficient scientific detail for the
well-informed reader. Appendix E will provide a useful reference
source with a much more detailed discussion of the scientific
evidence.
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B. THE CHLOROFLUOROCARBON/OZONE DEPLETION THEORY
1. General Description of the Theory
The earth's atmosphere to an altitude of about 50 km is
divided into two regions the troposphere or lower atmosphere
and the stratosphere or upper atmosphere. The two regions are
separated by the tropopause, which varies in altitude from about
8 km at the poles to about 16 km at tropical latitudes. In
contrast to the troposphere, where turbulence and rapid vertical
mixing occurs, the stratosphere is relatively quiescent.
Ozone (03) is the most important trace constituent of
the stratosphere. It is formed predominately at altitudes
between 25 km and 35 km in the tropics, where short wavelength
solar radiation dissociates molecular oxygen atoms which combine
with molecular oxygen to form ozone [Chapman, 1930] .
°2 + nv (solar radiation) *0 + 0 (1)
2 [0 + 02 + M*-*03 + M] (2)
Net: 3 02~>2 03
*M is any other molecule
Although ozone is produced in the tropics, highest ozone
concentrations are found in polar regions at altitudes of about
15 km, as a result of air motions in the stratosphere. The
production of ozone is currently assumed to- be relatively
insensitive to man's activities.
Ozone strongly absorbs solar radiation in the longer
wavelength radiation region 240-320 nm.
°3 + hv * °2 + °
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It is this absorption that shields the earth from ultraviolet
radiation. In this process, ozone is not destroyed since nearly
all the oxygen atoms produced recombine with molecular oxygen to
produce ozone (Reaction 2).
Although the reactions just described are the
predominant stratospheric production process for ozone, several
competitive destruction processes exist. The amount of ozone in
the stratosphere is maintained by a dynamic balance between
production and destruction processes. The most important
destruction process, one that destroys nearly 70 percent of the
ozone produced, is a catalytic cycle involving nitric oxide (NO
and nitrogen dioxide (NO-).
NO + 03> N02 + 02 (4)
N02 + 0» NO + 02 (5)
Net: 0 + 03 * 2 02
Because jet aircraft engines exhaust oxides of nitrogen, the
N0-N02 catalytic cycle formed the basis for concern in the early
1970s that supersonic transports flying in the stratsophere would
deplete the ozone layer [Johnston, 1971].
Stolarski and Cicerone [1974] and Wofsy and McElroy
[1974] suggested that the chlorine cycle may be a destruction
process for stratospheric ozone,
Cl + 03 » CIO + 02 (6)
CIO + 0 » Cl + 02 (7)
0 + 03 * 2 02
but only natural sources of chlorine, e.g., volcanoes, were
considered. The same year, Molina and Rowland [1974] published
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their suggestion that chlorofluorocarbons (CFCs) provide a
significant chlorine input to the stratosphere. In its simplest
elements, the suggestion was that:
CFC have a long atmospheric lifetime,
CFCs diffuse to the stratosphere,
CFCs are decomposed by ultraviolet radiation to
produce chlorine atoms, and
Chlorine atoms gradually reduce the concentration of
ozone in a catalytic cycle (Reactions 6 & 7).
The authors did not make an estimate of the amount of ozone
depletion by CFCs.
2. Model Calculations - What They Are; Why They are Needed
If Molina and Rowland's suggestion the ozone
depletion theory were true, significant effects of CFC on the
ozone layer only would occur decades into the future. As a
result, scientists have tried to estimate the magnitude of the
effects by use of time-dependent, one-dimensional (1-D) diffusion
models of the atmosphere, which are really complicated computer
programs that attempt to represent mathmatically the atmosphere
of the earth. These use chemical and photochemical reactions as
input data and largely ignore detailed atmospheric dynamics.
Some important points to note in reference to computer
model calculations are:
Ozone depletion has not been measured.
All estimates of ozone depletion are computer model
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calculations which depend on the model methodology
and assumptions, and the accuracy and completeness
of the input data.
High estimates of ozone depletion, e.g., 16 percent,
are calculated to occur over a hundred years in the
future and are based on working assumptions
described blow which are not likely to occur, even
if the theory were true.
Computer models do not yet represent or simulate
adequately the present atmosphere.
The predictive reliability of computer models is
unknown.
These points and others will be discussed more fully in section
E, "Present Status of the Theory".
3. Previous Scientific Assessments of the Theory
A number of scientific reports by both U.S. and European
scientific bodies have appeared which reviewed the status of the
Chlorofluorocarbon/Ozone Depletion Theory. The most striking
aspects of the reports is that they do not agree as to the
validity of the theory, i.e., a scientific consensus that the
theory is valid does not exist. On the contrary, they emphasize
the dynamic and uncertain nature of the science as viewed at
different times by different people.
1976
The first in-depth scientific assessment of the possible
effects of CFCs on the ozone layer was the National Academy of
Sciences (NAS) report, "Halocarbons: Effects on Stratospheric
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Ozone" [NAS, 1976]. The report concluded that continued release
of CFCs to the atmosphere at 1973 levels would produce gradual
ozone depletion in the range of 2 percent to 20 percent about 100
years in the future with a most probable value of about 6 percent
to 7.5 percent. However, the report acknowledged a substantial
lack of information, and concluded:
"Additional improvements in our knowledge of the atmo-
sphere and of stratospheric chemistry are essential to
permit more accurate assessments to be made of the
extent of potential reductions in the stratospheric
ozone." (emphasis in the original) [NAS, 1976, p. 20].
It should be emphasized that these values of ozone depletion were
calculated with a 1-D model. They were not measured values.
1977
A subsequent report by the National Aeronautics and
Space Administration [NASA, 1977] was published the following
year. One significant finding of the report was that a
preliminary (now confirmed) fast rate for the reaction H02 + NO
increased calculated ozone depletion by CFCs from about 7.5
percent to 15.0 percent (Lawrence Livermore Laboratory model)
.[NASA, 1977, p. 192]. The report emphasized the need for
additional research to better understand stratospheric science.
1979
Two important reports were published in 1979 within one
month of each other the NAS report, "Stratospheric Ozone
Depletion by Halocarbons: Chemistry and Transport", [NAS, 1979a]
and the United Kingdom Department of the Environment report,
"Chlorofluorocarbons and Their Effect on Stratospheric Ozone"
[UK DOE, 1979]. Although the two reports used similar models,
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similar input data, and stated very similar values of calculated
ozone depletion, they reached opposite conclusions with regard to
the validity and rejLjLa^bjLjLj.t.yo^tjigc^a^jL£Lil.^^ted depletion
vis-a-vis actual, real-world ozone depletion.
The United Kingdom report placed low confidence in the
reliability of the calculations, while the NAS report expressed
high confidence in them. A brief quotation from each report is
illustrative and representative:
U.K. Report [UK DOE, 1979, p. 194 and p. 6]
"It is not, therefore, realistic to assign overall
uncertainty limits to our calculated ozone pertur-
bations; deficiencies in our basic knowledge of the
processes establishing the composition of the
stratosphere and in the modelling technology cast doubts
on their validity.... The report concludes that present
understanding of ozone depletion is limited and is based
on model assumptions which have not been adequately
validated."
NAS Report [NAS, 1979a, p. 1]
"The uncertainty range means that for the case of
continued release of CFMs [chlorofluoromethanes, e.g.,
CFC-11 and CFC-12] at the 1977 level there is a 1 chance
in 40 that the ozone depletion will be less than 5
percent and 1 chance in 40 that it will be greater than
28 percent.... Although there are a few exceptions the
comparisons between the models and measurements of
substances in the present stratosphere is considered to
be satisfactory within the uncertainties of the
measurements. We, therefore, believe that the
projections for ozone depletion are valid within the
stated uncertainty ranges."
A more detailed comparison of quotations from the NAS
and U.K. reports appears as Appendix D.
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1979
A report published in 1979, "The Stratosphere: Present
and Future", [NASA, 1979] is a detailed review of stratospheric
science. Two items in that report bear comment.
First, the results of a modeling exercise conducted by
NASA are given in this report. Ten modeling groups were asked to
perform several calculations using standard input data. Although
the models differed in some respects, "most models employed
similar values for many of these parameters, and this [was]
reflected in the agreement between the different model results."
Not surprisingly, the different groups all calculated about the
same amount of ozone depletion at steady state [NASA, 1979, p.
340], It must be emphasized that this agreement among the
several modeling groups does not enhance or increase the validity
of the calculations as claimed often by EPA. All the models are
constructed basically the same way, and all used very similar
input data. That the results are similar was an expected result,
and demonstrates primarily the absence of computational errors.
Consensus on the model output does not imply consensus on either
model completeness, correctness of the input data, or validity of
the results.
The second key item in the report is the discussion on
the potential for the detection of ozone changes or trends in the
record of ozone measurements. The report states [NASA, 1979, p.
325] that the "percent thresholds for detecting changes in ozone
globally in 10 years using the best statistical methods and
Dobson network data" are:
"+3.6 For detecting a true change in global average
total ozone after allowing for uncertainty due to
statistical error, instrument drifts and spatial
sampling biases."
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"+5.7 For detecting a CFM effect after allowing for
errors above plus possible variations due to
other anthropogenic changes."
However, the above thresholds were obtained by subjective esti-
mate of the likely size of the uncertainty. It is important to
be aware of the subjectivity of these estimates when one compares
them with more recent results based on acutal ozone measurements.
NASA acknowledges the very high uncertainty of the estimates with
the statement [NASA, 1979, p. 321] (original emphasis retained),
"It should be emphasized that the values given for the
individual standard errors in estimating the threshold
for trend detection are, for the most part, quite soft."
1980
The most recent scientific assessment of the ozone
depletion theory is the report of the Commission of the European
Communities to the Council of the European Communities,
"Chlorofluorocarbons on the Environment" [EEC, 1980]. This
report was based, in part, on the analysis of the NAS and U.K.
reports by Brasseur [1980], The main conclusion of the
Commission report [EEC, 1980, p. 7] is noteworthy:
"The foregoing analysis shows the need for further
research. But if the requisite decision is delayed, the
likely effect of CFCs may be greater and the con-
sequences more serious. The British report shows that
by extending the date of an assumed total cessation of
CFC emissions from 1 January 1979 to 1 January 1983, the
maximum amount by which the total quantity of ozone
would be depleted would increase from 0.5 percent to 0.6
percent since, according to the model, the interval
between the cessation of emissions and the maximum 0.,
depletion lies in the range 7 to 15 years. Con-
sequently, a delay of 5 years before any decision is
taken on CFCs can be reasonably accepted."
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C. OZONE MEASUREMENTS AND OZONE TREND ANALYSIS
1. Overview
Ozone concentration has been measured regularly at a
number of locations (Dobson stations) around the world for
varying lengths of time. Several stations have been in operation
for over 20 years. Most estimates up to and including the 1979
NAS report concluded that although the system of measuring
stations provided useful information regarding ozone concen-
tration, the natural and experimental fluctuations precluded
detection of small trends, unless the accuracy, precision, and
internal consistency of the system of stations were improved.
Such improvements were expected to require several years.
o
The statistical method of time series analysis had been
applied to the measurements, but historically lacked the scope
and treatment necessary to verify and reduce the sensitivity of
the method. Nonetheless, the work was very promising, requiring
only the development time necessary for any new application.
This development has been pursued with fruitful results --
only now receiving the attention they merit as an important
contribution to the science concerning ozone depletion. The
current status of the technique is summarized below:
2
A time series is a set of measurements in time such that each
measurement may be related to the previous or several previous
measurements, e.g., daily temperatures. Time series analysis is
a statistical technique to analyze the time series for patterns,
cycles, or trends and to evaluate them quantitatively.
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Time series analyses of ozone measurements
(varyingly called time-trend analysis, ozone trend
analyses, or OTA) completed after publication of
NASA [1979] and the NAS [1979a] reports conclude
that ozone increased by a small, but statistically
insignificant amount over the period 1970-1978.
The very high ozone concentrations measured in 1979
raise that increase to a statistically significant
level, at the same time demonstrating the sensi-
tivity of the technique to the trend in the data.
The studies establish 95 percent confidence limits
of +_ 1.0 percent to 4; 1.5 percent on the trend
estimate.
The 95 percent confidence limits will narrow with
each subsequent year of data.
The studies imply ozone trend analysis can serve as
an early warning system.
It is important to understand exactly what is meant by
these results. Clearly they could be explained if the ozone
depletion theory is erroneous. The absence of a trend can also
be explained if the net ozone trend from all recent effects is
less than the threshold of detection, a situation in which two or
more effects partially offset each other. Statistical trend ana-
lysis, therefore, does not unequivocally contradict the ozone
depletion theory. For example, increases in atmospheric carbon
dioxide may cause increases in ozone levels.
The rapidly increasing sensitivity of ozone trend
analyses must be included in the regulatory decision-making
process. The results of trend analysis should be given as much
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importance as the model predictions of ozone depletion them-_
selves. Ultimately, the regulatory issue is whether ozone is
being depleted or not, not what is predicted by computer models
programmed around numerous assumptions.
Throughout the Chlorofluorocarbon/Ozone Depletion Issue,
scientists and regulators have focused attention on calculated
theoretical steady-state ozone depletion rather than experimental
ozone measurements themselves. The reasons for this unusual
situation are:
a). If the theory is correct, significant ozone
depletion will occur only gradually decades in the
future. Accordingly, it was considered necessary
to use computer models to estimate the magnitude of
the depletion that might occur.
b) . The theoretical depletion calculated to have
occurred already was thought to be about 2 percent
(recently revised to about 1 percent). The
scientific community virtually assumed that such a
change could not be detected by the Dobson network.
2. Detail
Hill and Sheldon [1975] first applied time series
analysis to Dobson measurements taken from 1932-1970 at Arosa,
Switzerland, and used this technique to predict ozone values at
Arosa in the period 1971 to 1974, and make qualitative estimates
of ozone levels later in the decade. Subsequently, Hill _et al.
[1977] and Pagano and Parzen [1975] applied ozone trend analysis
(time series analysis applied to ozone records) to a larger ozone
data record. In their most recent work, Hill et al. [1977] and
Tiede et al. [1979] pointed out that no evidence of ozone
depletion exists, and concluded that a trend of 1.5 percent per
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decade could be detected by this technique. The trend could be
due to "one or a combination of man-related activities, long-term
natural trends, or instrument drifts."
More recent work, since the publication of the NAS
report, also agrees that no ozone depletion has occurred.
Reinsel ejt al. [1980] analyzed Dobson ozone measurements from 36
stations worldwide. Statistical, instrumental, and geograpical
errors were considered. They found that the global trend
estimate for total ozone change was (0.28 _+ 1.4) percent for the
period 1970-1978. The uncertainty limits of this analysis (+ 1.4
percent) are much smaller than those given in NASA [1979].
St. John [1980a; 1980b] used a somewhat different
approach and obtained results very similar .to those of Reinsel
et al. St. John reports that his analysis of 14 Dobson stations
with records from 1958 through 1978 show a change of (0.3 + 1.2)
percent through 1978. More recently, St. John e_t al. , [1980]
have extended the analysis of 14 Dobson stations to include 1979
data. An average trend of (+ 1.5 + 1.0) percent is found for the
period 1959-1979, with the method responding as it should to the
high 1979 values. (See below).
Neither the Reinsel et al. nor the St. John study
identifies the cause of the observed effect, i.e., no ozone
depletion. At this time, any trend -- up or down detected by
the method could be caused by natural forces, man-made
perturbations, or a combination of the two.
In addition, Angell and Korshover's [1980] studies have
also shown the lack of ozone depletion.
"The 1979 data suggest the highest global total-ozone
value since 1970, or a value a significant 2 percent
above average."
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Angell [1978] has reported on the analysis of ozone measurements
in the 32 km - 46 km region, a part of the so-called Umkehr
data, where the greatest percent change in ozone is calculated to
occur. His analysis showed a 12 percent increase in ozone from
1964-1972. Photochemical theory at the time suggested about a 5_
percent decrease should have occurred. More recently, Angell and
Korshover [1980] updated the report saying:
"Thus, there is still no evidence of an anthropogeni-
cally-induced decrease ^n ozone in t,his sens^t^ve
layer." (emphasis added).
In effect, the Dobson total column ozone measurements
and the Umkehr stratospheric layer ozone measurements indicate
that ozone has increased in concentration. An important
difference is that the Dobson data have been subjected to time
series analysis while the Umkehr data have not. It is important
to note that the statistical analyses of Dobson measurements have
uncertainty limits (95 percent confidence) for detection of any
trend in the range of + 1.0 percent to + 1.5 percent. For
example, St. John £t al. , [1980; St. John, 1980a; 1980b] shows
that above the 14 stations used in the analysis, the best trend
estimate for ozone from 1958-1979 is + 1.5 percent. The 95
percent confidence limits of +_ 1.0 percent mean there is only 1
chance in 40 the increasing trend is less than + 0.5 percent(+1.5
-1.0), and 1 chance in 40 it is greater than 2.5 percent(+1.5
+1.0).
Umkehr measurements record ozone concentration in several
distinct altitude layers of the stratosphere rather than the
more common total column ozone measurements which measure the
ozone in a column of air extending from the surface of the earth
to the upper limits of the earth's atmosphere.
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The sensitivity of the method suggests it appropriately
may be used as an early warning system. If a small ozone
depletion can be detected, e.g., -1.5 percent +_ 1.0 percent (a
range of -0.5 to -2.5 percent change in ozone), steps can be
taken quickly to reduce emissions so that, in this example,
maximum depletion would not exceed 2.25 percent to 3.75 percent,
largely below the 3.6 percent detection threshold value suggested
in NASA [1979]. (These values follow from the "overshoot"
concept. The 1.5 "overshoot" factor times -1.5 percent and -2.5
percent gives -2.25 percent and -3.75 percent, respectively).
Finally, Tiao [1980] has reported on preliminary studies
to show that the Dobson network does represent a true global
average of ozone measurements. The study involves analysis of
the 1970-1977 Nimbus 4 satellite ozone data. The global average
ozone measurements from the satellite show a negative trend of
0.5 percent per year which has been attributed to drift in the
satellite's instrumentation [Cunnold, 1980; Stolarski, 1980].
The known but unquantified drift in the instrument prevents
derivation of a trend in actual ozone from the satellite data.
However, Tiao also shows that the average trend in ozone measured
by Nimbus 4 for the specific geographical regions near the 36
Dobson stations used in his ozone trend analysis is also -0.5
percent per year. Therefore, the trend in average ozone levels
above the 36 Dobson stations is identical to the trend in average
global ozone levels as measured by Nimbus 4 during an 8-year
period, which leads one to conclude reasonably that the Dobson
network measures true global average ozone.
To summarize, ozone trend analysis is a sensitive method
to monitor ozone levels in the stratosphere. Ozone depletion has
not occurred. It is unreasonable to suggest that highly uncer-
tain computer model calculations are more reliable than time
series analyses of actual ozone measurements, when the latter;
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Show increase in ozone of more than 1 percent,
rather than depletion,
Are sensitive enough (+_ 1 percent to +_ 1.5 percent)
to detect quickly any excursion of ozone outside
normal levels,
Become more sensitive with time.
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D. EPA's ASSESSMENT OF THE THEORY
The justification for proposed rulemaking on CFCs by EPA
is stated in the opening sentence of the ANPR:
"Because of the destructive effect of chlorofluoro-
carbons (CFCs) on stratospheric ozone, EPA is
considering restricting their production such that the
potential for ozone depletion does not increase over
present levels."
Clearly, the assumption is that ozone is decreasing. Just as
clearly, the tacit assumption is that CFCs, in and of themselves
and regardless of other natural and man-made long-term changes,
will cause such a decrease unless emissions are controlled. For
a number of reasons, the analysis which has led to these
assumptions is inadequate.
A very serious problem appears in defining the scope of
the problem. Unlike most regulatory issues facing the Agency, in
which a single chemical species might produce a deleterious
effect .regardless of other circumstances (e.g., certain toxic
substances), changes in ozone are controlled by a variety of
coupled chemical reactions. In order to understand changes in
ozone, it is necessary to understand all such effects
simultaneously. EPA acknowledges in the ANPR that it "has relied
primarily on the scientific analysis of the National Academy of
Sciences [NAS, 1979a; 1979b] for support of this theory as well
as for an assessment of the potential hazards posed by continued
world emissions of CFCs." The now already outdated report of the
Panel on Stratospheric Chemistry and Transport [NAS, 1979a, p.
14] notes that it is "difficult to project accurately the effect
of increased halocarbon release when the release of other
man-made pollutants may also be increasing in a undetermined
way." However, the Panel does not consider other perturbations
in either the scenarios for calculations into the future or in
the error analysis of their results. The entire approach treats
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CFCs as if they were the only chemical substances which might
produce effects on ozone, i.e., as if the CFC perturbation were
separable from other effects occurring simultaneously. With
regard to ozone and protection of the environment, the problem is
not that simple. The possibility of CFC effects combined with
C02 or N20 changes is well documented by NASA in another of EPA's
cited references [NASA, 1979], Numerous technical papers [e.g.,
Miller e_t al., 1980c; Penner, 1980a] further document this
situation. The narrow view implicitly ignores the real world
issue in favor of one which seems more tractable. As discussed
below and in Appendix E, serious problems remain even in this
narrower approach.
Lack of attention to the real world is also evident in
the treatment afforded to ozone measurements themselves.
Scientifically, it is undoubtedly important to understand causes
of ozone changes, and furthermore to detect such changes with
sufficient sensi'tivity to assign a cause. However, this very
strong demand is not immediately applicable to the regulatory
problem. Given a theory about possible changes in ozone, any
changes which might be demonstrations of that theory are cause
for concern. This remains true even if such changes are not
unambiguously related to the theory. Thus, the important
regulatory question becomes: "How large must a trend in ozone be
to be detected, regardless of its cause?" In the ANPR EPA states
it has been motivated to take action now rather than to wait for
better information since "validation of the ozone depletion
theory through environmental monitoring is limited because a
minimum ozone change of approximately 5 percent over a period of
ten years would be required before a depletion could be observed
with statistical confidence." The analysis is incorrect for
several reasons.
First, the figures quoted represent "best guesses" [NAS,
1979a, p. 93] and "estimates" [NASA, 1979, p. 286] made without
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analysis to determine actual statistical significance of the
data. Furthermore, the quoted numbers referred to the specific
scientific question of demonstrating cause and effect, rather
than to the immediate regulatory question of identifying changes.
The EPA analysis is misdirected; it also ignores available
information. Statistical analyses of the actual ozone
measurements have been made, and were available to EPA [CMA,
1980a]. A small trend would be detectable, but it is not present
[St. John e_t al. , 1980; Reinsel jit al. , 1980; Watson, R. T.,
1980]. Rather than 5 percent, a trend of only 1 to 1.5 percent
would be detectable over 10 years. Any "overshoot" would
similarly be reduced. Calculations based on current theory imply
an overshoot of no more than half the amount of depletion
existing at the end of emissions. Thus, even if the theory
proves correct, responsible action is capable of limiting
ultimate depletion to and below EPA's 5 percent [EPA, 1980a,
Jellinek, 1980a]. The fact is that depletion which is calculated
to have occurred already has not been observed. On the contrary,
in several recent sophisticated analyses of ozone data, slight
increases in ozone have been noted, as discussed immediately
preceding this section. This fact has been ignored. (Still more
details are presented in Appendix E).
EPA's inattention to the capabilities of ozone
measurements and analysis has allowed many other misleading
points to be made in the ANPR. Large steady-state ozone
depletion is simply not a viable possibility. Even the largest
estimates of trend detectability would allow for early action if
it becomes necessary. Large calculated numbers based on
unrealistic future situations do not justify immediate action.
Concern over growth in production is likewise misplaced.
In the first place, large-scale growth of 7 percent or 9
percent per year is not reasonable because of its requirements
for new production capacity. Furthermore, capacity has already
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been limited for European producers by actions of the European
Economic Community, and significant production capacity has been
dismantled in the U.S. To describe 9 percent future growth based
on the recent historical record of production [CMA, 1980b] is
equally unsupportable. In addition, a point which is neglected
in the EPA statement regarding such growth is the effectiveness
of mere concern as a deterrent to increased production (see
Section VII-Economics). A sensible businessman simply would not
risk a large amount of investment capital in a threatened
industry for what could be a very short-term return. In short,
the projected growth represents a naive view of business
sensibilities, and concerns over such growth are misdirected as
are the ANPR arguments which depend on growth. (For further
discussion on this point, see Appendix J).
Realistic considerations are equally missing from the
EPA discussion of atmospheric modeling. To quote a basic text,
"An Introduction to Scientific Research" [Wilson, 1952]:
"A successful scientist knows that all models are
somewhat defective and that certain aspects of his
visualization do not apply to the problem in hand."
One must realize that atmospheric models do not predict a
realistic future. Models may, however, be used to calculate the
consequences of a set of assumptions about the future. Thus, a
modeler honestly describing his work on the CFC problem must
qualify his "predictions" (a more appropriate word is
"calculations") with a number of caveats. The results will
obtain only, if 1) the model is complete, 2) input data are
accurate, and 3) approximations are justified. Furthermore, the
"future" as calculated in atmospheric models bears little resem-
blance to the future as we expect it to be. Models assume that
all inputs to the stratosphere remain constant except the varia-
ble(s) under consideration. Simple examples of expected depart-
ure from the CFC scenarios abound: CO- is increasing; N20 is
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thought to be increasing; other chlorine-containing compounds are
possibly increasing; natural events may have unpredictable long-
term effects; aircraft and space shuttle fleets are likely to
continue injecting increasing amounts of nitrogen oxides, etc. In
short, models "predict" only what would happen in a simplified
idealized atmosphere with a number of qualifications. The
limitations of models do not imply that they are unimportant or
useless, but merely that they are imperfect research tools. (The
imperfections are described in considerable detail in Appendix
E).
The continued emphasis in the ANPR on "predicted
effects", without acknowledgement of the many serious actual and
potential differences between the model "future" and reality, is
particularly dangerous in that the political decisions will
ultimately be made not by the scientists who take such restric-
tions for granted but by layment who may not be properly
informed.
Along with the capabilities of the models themselves,
the input information necessary for such calculations is
inaccurately discussed in the ANPR. As an example:
"The chemical reaction rate coefficients and the
photolysis rate coefficients (measures of the speed with
which reactions occur), the vertical diffusion
coefficients .(a measure of the speed of the vertical
transport), and other parameters needed to produce a
numerical solution have generally been measured either
in the field or in the laboratory. A few are
estimates."
The chemical reaction and photolysis rate coefficients have
indeed in most cases been measured, but only under laboratory
conditions. A number of them have been measured at more than one
temperature and a smaller number at more than one pressure, yet
both temperature and pressure often influence the rates of
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reactions. However, only a very small number have been measured
over the full range of temperature and pressure conditions
occurring in the stratosphere.
In the absence of appropriate measurements, modelers use
extrapolations where limited data are available. But in the case
of measurement at a single set of conditions, 'temperature or
pressure dependencies generally are assumed to be nonexistent.
Such extrapolations and assumptions are sometimes justified, but
almost equally often wrong. (Specific examples will be discussed
below). In many cases, the values chosen for models represent a
compromise between disagreeing measurements, again contributing
to overall uncertainty.
Diffusion coefficients are another matter entirely.
Representation of vertical transport by diffusion coefficients is
itself an unproven hypothesis a simplification of the
three-dimensional circulation patterns of the atmosphere to
"model" vertical transport. Such coefficients are derived,
rather than measured, by fitting an assumed mathematical
expression to measured species concentrations. They are a
mathematical representation of a much more complex phenomenon,
and are chosen to produce reasonable agreement between calculated
and measured results for atmospheric species which appear to be
well understood. The applicability to other chemical species
again involves an assumption. (A discussion of eddy diffusion
theory and its use limitations in modeling is included in
Appendix E).
The implied satisfaction with these input parameters in
the ANPR belies the dynamic nature of atmospheric science. New
information (much of which is discussed in detail in Appendix E)
continues to arise from ongoing research, modifying earlier model
inputs and demonstrating that, in effect, far more than "a few"
of the input parameters "are estimates". As the parameters
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change, so will the calculated depletion. As our understanding
of atmospheric processes evolves, so will the models used to
simulate them. The ANPR acknowledges that "simplifications" have
been introduced into these models, but cites only the limitation
to one-dimensional (1-D) models. Other simplifications are
numerous and potentially at least as significant. Despite
apparent concern over the 1-D approximation, no reference
whatsoever is made to the two-dimensional modeling now being
developed, or to the results of 2-D models made available during
the past year since the NAS report.
In the ANPR, EPA has chosen to rely on a 1979 report on
possible ozone depletion, its conclusions, and its discussion of
uncertainties. The above-mentioned rapid pace of the science
makes the construction of such a report a difficult task, and
furthermore quickly outdates a summary assessment made at any
given time. The year since the issuance of the report has been
marked with a number of new developments, some of which have
dramatic impacts on the perceived severity of potential CFC
effects. Those developments have arisen from the many ongoing
research programs in academia, industry, and government. Each
such development is discussed thoroughly in the review which
follows in this section and in Appendix E.
An additonal risk in reliance on any single review is
the possibility of false indications of scientific consensus.
Several documents made available to the EPA before and after the
issuance of the NAS reports, and before the publication of the
ANPR, point out the variety of opinion which exists [UK DOE,
1979; Du Pont, 1980a; 1980b; CMA, 1980a; EEC, 1980]. That these
are rejected summarily and without explanation is puzzling.
One cannot overestimate the importance of understanding
the uncertainties involved. The NAS attempted to quantify these
uncertainties [NAS, 1980a] , and their efforts have been
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criticized [Du Pont, 1980a; 1980b]. But throughout the exercise,
the NAS made clear that the uncertainty estimates were, in
general, subjective a "best professional judgment". Such
caveats cannot be ignored. To report such confidence limits as
objectively derived science without qualification is to ignore
something basic to the scientific process. In referring to the
role of human bias in science, Wilson [1952] wrote:
"No human being is even approximately free from these
subjective influences; the honest and enlightened
investigator devises the experiment so that this own
prejudices cannot influence the results. Only the naive
or dishonest claim that their own objectivity is a
sufficient safeguard."
The NAS panel, of course, was careful to point out the
subjectivity surrounding many of its estimates. However, in
spite of additional cautions on that point [Du Pont, 1980a] ,
summary statements which neglect to mention such restrictions
have now been taken by EPA to provide the basis for regulation.
The detailed discussions in the next section and Appendices E and
F reiterate the claim that those estimates of an uncertainty
range were far too narrow, and that the year-old assessment of
the issue is an overstatement of its severity.
Overstatement of severity extends also to the second of
the NAS reports which have provided the basis for EPA's proposed
actions [NAS, 1979b] . The primary danger of ozone depletion is
cited as risk of greater exposure to ultraviolet radiation at the
earth's' surface. It is well known both that different
wavelengths of ultraviolet radiation are attenuated in varying
amounts by ozone and that any biological effects are also likely
to be wavelength dependent. In combining these variations to
discuss the effective change, the NAS Committee on Impacts of
Stratospheric Change [1979b] chose to gauge effectiveness at each
wavelength by the potential for DNA damage, which is, perhaps
coincidentally, the procedure which results in the greatest
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increase in "damaging ultraviolet" (DUV) for any given decrease
in ozone. While the report makes clear the hazards of assuming a
given spectrum (i.e., a particular gauge of effectiveness for
different wavelengths of UV) without examining each individual
effect, it is the defined DUV change which is cited by EPA as
posing a danger to humans, other animals, and plants.
To summarize briefly, the scientific rationale advanced
by EPA as the basis for proposed rulemaking suffers from many
shortcomings, each of which may impact an ultimate regulatory
decision:
The chosen scope of the problem is too narrow.
The scientific basis for results discussed is not
understood.
New information is ignored.
Uncertainties and weaknesses in science are not
clearly stated or acknowledged.
Scientific consensus is gauged by a single document
in the face of several others with disparate
conclusions.
Little attention is paid to the distinction between
scientific exercises and the real world.
Conclusions are overstated.
It is essential to clarify the actual state of the
science at the time of regultory decisions. In the face of
uncertainty, such decisions are extremely difficult; in the face
of inadequate, incorrect or misleading information, they will
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often be wrong. In the section which follows and in more detail
in Appendix E, each aspect of the atmospheric science involved in
potential ozone depletion is reviewed thoroughly, with reference
both to earlier reviews and to more recent information. This
review also advances what is felt to be both a more realistic and
a more complete assessment of the current state of science
surrounding the Chlorofluorocarbon/Ozone Theory.
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E. PRESENT STATUS OF THE THEORY
This section discusses key uncertainties in the science
of the ozone depletion theory and new information which became
available after the NAS [1979a] and NASA [1979] reports were
published. Each step of the theory is assessed and its current
status is summarized. In paticular, the differences with respect
to the expressed view of EPA are noted.
1. Production and Release of CFCs
The historical CFC production and emissions data used
for input to models are well established, and are discussed more
thoroughly elsewhere in this document (Appendix J). However, CFC
releases for the future are in all cases merely scenarios. There
is not, nor can there be, any general consensus of what releases
might be more than a few years from now, due to the very high
connection between business decisions and the regulatory
decisions which might be made during those years. Thus, the
major uncertainty here lies in the interpretation of model
results for a given scenario and in the likelihood of that
scenario ever occurring.
2. Lower Atmospheric (Tropospheric) Processes
The primary role the troposphere may play in the ozone
depletion theory is in the possible destruction of CFCs-11 and
12. Research has so far failed to demonstrate the significance
of any possible mechanism, but several efforts continue. The
emphasis of recent research results has been in the use of
tropospheric trace species measurements to provide indication of
sink processes for the CFCs.
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a. CFC-11 and CFC-12 Lifetimes
The atmospheric lifetimes of CFC-11 and CFC-12 have been
believed generally to be long, e.g., 50-100 years. The reasons
are:
Systematic analysis of known tropospheric destruc-
tion processes indicated none are likely to remove
any significant fraction of CFCs from the tropo-
sphere.
Measured values of CFCs in the troposphere are
consistent with the conclusion that CFC-11 and
CFC-12 have long atmospheric lifetimes.
Clearly, unknown processes which destroy CFCs have not
been evaluated, if they exist. The first item above says the
processes that have been evaluated do not destroy significant
amounts of CFCs. It does not establish that CFCs are not
destroyed in the troposphere.
The second item ignores errors in the measurements and
calculations of the total amount of CFCs in the atmosphere. Even
a slow removal process of 2 percent per year, would be important
to the theory, and would not yet be detected by the measurements.
Nonetheless, the model calculations assume all CFC-11
and CFC-12 released to the atmosphere reaches the stratosphere,
and all the chlorine content of these CFCs participates in the
ozone destruction cycle. Obviously, any fraction of chlorine
which does not reach the stratosphere reduces calculated ozone
depletion proportionately.
An experiment called the Atmospheric Lifetime Experiment
(ALE) has been in progress since 1978 to measure the atmospheric
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lifetime of CFC-11 and CFC-12. The methodology of the experiment
appears in the scientific literature [Cunnold et. al. , 1978], The
objective of the experiment is to measure CFC-11 and CFC-12
concentrations for 3 years or longer, several times each day, at
4 or more remote sites throughout the world. The measured
increase in concentration of CFCs versus time, i.e., the trend in
CFC concentrations, is compared to that calculated from known
.releases of CFCs over the same time period. The lifetimes of
'CFC-11 and CFC-12 then are calculated by comparing the two trend
estimates.
Preliminary results from 18 months of measurements
indicate the lifetime of CFC-11 is about one-half that assumed in
the NAS report [1979a] and elsewhere, i.e., about one-half the
calculated 50-year lifetime from stratospheric destruction alone.
At this time the value still has large uncertainty limits which
Include the longer lifetimes, but the limits will become rapidly
smaller as more measurements are recorded. If this lifetime is
confirmed, the effects of CFC-11 on ozone, if any, will be
halved. Similarly, any process that removes CFC-11 is likely to
remove CFC-12 but at a slower rate. It, therefore, is reasonable
to expect that some significant fraction of CFC-12 may also be
removed in the troposphere, with a proportional reduction in
calculated ozone depletion.
b. CFC-21
CFC-21 has been detected in the troposphere by several
research groups [Rasmussen ^t al., 1977; Penkett et al., 1980;
Crescentini and Bruner, 1979; 1980; Singh _et al., 1977; Cronn
and Harsch, 1979] at concentrations ranging from 1 to 15 parts
per trillion by volume, (pptv.). An early suggestion that it is
an artifact of the analysis (absorption of the CFC-21 standard
onto "Teflon" parts of the analytical apparatus and desorption
during analysis of air samples) has not been supported [NASA,
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1979, p. 92]. At these measured levels, the amount of CFC-21
exceeds that produced globally by about a factor of 100-1000.
That being the case, it has been suggested that CFC-21 is formed
in the atmosphere from CFC-11.
CFC13 ^ CHFC112 (12)
If that is the case, the production of CFC-21 . from
CFC-11 must, in fact, be occurring at a faster rate than the
destruction of CFC-21 by reaction with OH radical, a relatively
fast process. In short, process (12) would be a significant
tropospheric sink for CFC-11.
The destruction of CFC-11 and CFC-12 on sand surfaces
has been studied [Ausloss e_t al. , 1977; Ausloss and Rebbert,
1980], In one experiment, in the absence of air, CFC-21 was
formed from CFC-11 in the presence of sand, but not when air
(oxygen) was present. More recently, two research groups have
obtained widely different results from the analysis of air
samples collected at different times and places. One group
[Penkett et al. , 1980] consistently found CFC-21 in the 1-3 pptv
concentration range, while the other [Crescentini and Bruner,
1979; 1980] found low values (1-3 pptv) both in rural and
industrialized areas (in one case, no CFC-21 was found near a CFC
production plant) , but very high amounts (up to 100 pptv) of
CFC-21 in air masses that passed over the Saraha Desert.
In summary:
The ALE research suggests an unknown tropospheric
sink exists for CFC-11, and possibly CFC-12.
CFC-21 may be a degradation product of CFC-11,
presumably formed on sand surfaces.
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Background levels of CFC-21 are low but may be high
in air masses that pass over desert areas.
c. CFC-22
CFC-22 is a commercial product and is released to the
atmosphere. Recent analyses [Rasmussen et at., 1980] suggest
that the quantity of CFC-22 in the atmosphere is much larger than
that from estimated releases. Several possible explanations are:
The measurements are in error.
The release estimates are in error.
A production process for CFC-22 exists in the
atmosphere.
If the latter were true, CFC-12 would be a likely source of
CFC-22
CF2C12 ^ CHC1F2 (13)
by analogy with the discussion for CFC-ll/CFC-21. If so, reduced
quantities of CFC-12 would reach the stratosphere, with a
resultant reduction in calculated ozone depletion.
3. Transport to the Upper Atmosphere
In an atmospheric model, transport is the movement of
chemical species. In a 1-D model, transport describes the
movement of species in the vertical direction; in a 2-D model,
movement is described in the vertical and latitudinal
(north-south) directions. The diffusive movement of species is
described mathematically, and the altitude-dependent rate of
transport is defined by an eddy-diffusion coefficient. These
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coefficients are chosen to produce agreement with measurements of
long-lived species. Two-dimensional models also contain an
average air circulation in addition to diffusion.
The NAS report [1979a, p.11] states, "It is felt that
the uncertainty in the eddy-diffusion coefficent at a given
altitude is about a factor of 2, although it is admitted that
this uncertainty estimate is somewhat subjective." Other studies
show calculated ozone depletion is very sensitive to the choice
of transport. Derwent [UK DOE, 1979, p.158] made several ozone
depletion calculations, changing only the transport from one run
to the next. He used transport parameters reported by five
well-recognized modeling groups throughout the world. The
calculated ozone depletion in this study ranged over nearly a
factor of 4 depending on the transport description used.
Based on this study, calculated ozone depletion is
uncertain by as much as a factor of 4, whereas NAS limited its
uncertainty estimate to a factor of 2. It is just this sort of
underestimation which can lead to overconfidence in model
results.
4. Chemistry in the Lower and Upper Atmosphere
The year since the release of the NAS [1979a] report has
brought several major changes in the accepted set of reaction
rates [Chang, 1980], Also included in the most recent revisions
are many minor changes. The net effect has been a reduction in
calculated steady-state ozone depletion to roughly 7 to 10
percent rather than the much higher numbers calculated by most
modelers in 1979 [NASA, 1979; NAS, 1979a] .
At least as important as the changes in ozone depletion
calculations is the increased awareness of uncertainty in the
reaction rate data used to derive those results. Many of the new
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rate results have come as a surprise to kineticists. The
importance of accurate temperature and pressure dependence
measurements has surfaced as a major issue, particularly for the
chemistry of the hydroperoxyl (HO-) radical. This radical reacts
with most of the major stratospheric chemical species, and
strongly influences their concentrations. Reaction product
identification, likewise, has been a major issue, with the
realization that assumed products may not always be correct and
that alternative products (i.e., different reaction "channels")
may lead to very different calculated ozone depletion.
The uncertainty, of course, extends in both directions.
Resolution of the uncertainties may lead to either increases or
decreases in calculated ozone depletion. However, they reinforce
the contention that stratospheric chemistry is simply not well
enough understood to permit confidence in current model calcula-
tions.
The major developments may be summarized briefly as
follows:
Recent studies have shown several reactions of the
hydroxyl (OH) radical may be faster than thought
previously. The faster rates substantially reduce
calculated ozone depletion.
Several other changes in kinetic and photochemical
data contribute to further reductions in calculated
depletion. They reflect the major uncertainties
still present in the model input data set,
particularly with respect to temperature and
pressure dependencies.
For several important chemical reactions, alter-
native products to those assumed are possible. The
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alternative products, if formed, would reduce
substantially calculated ozone depeltion.
The rate of formation of chlorine nitrate and its
fate in the stratosphere, are not well defined.
Since this species has a large influence on
calculated ozone depletion, the calculations remain
highly uncertain,, and could vary in either
di rection.
a. Hydroxyl Radical Reactions
i. Hydroxyl Radical and Nitric Acid
In a recent study [Wine et al., 1980], the rate of the
OH + HN03 reaction has been found to be significantly faster at
stratospheric temperatures than that measured previously. The
effect is to increase the rate of removal lower the calculated
average concentration of OH in the lower stratosphere. This,
in turn, slows the conversion of "inactive" HC1 to "active" Cl
OH + HC1 ^ H20 + Cl
which may participate in the ozone depletion cycle (Reactions 6
and 7) on p. IV-8, which, in turn, lowers the predicted ozone
depletion calculations. These results agree with several
atmospheric measurements (discussed in section 6 below) which
suggest indirectly that calculated stratospheric OH
concentrations are too high. No direct measurement of OH in the
stratosphere is available. The effect of the new reaction rate
depends on the reaction products
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OH + HN03 - » H20 + N03 (8a)
- ^ H0 + N0 (8b)
The Lawrence Livermore Laboratory model calculated steady-state
ozone depletion of 9.5 percent if Reaction 8a occurs and 12.3
percent if Reaction 8b occurs [Wine ^t al. , 1980] . Products (8a)
seem more likely to form since the reaction path is simplier and
these products are more stable. The reactions are under study.
Kurylo [1980] has recent preliminary data confirming the rate,
although new values [Marinella ert al. , 1980] are somewhat lower.
Marinella ^t al. , [1980] also identify the major product channel
as (8a) .
ii. Hydroxyl Radical and Peroxynitric Acid
Recently, the photolytic lifetime of peroxynitric acid,
H02NC>2, in the stratosphere was shown to be much longer than
thought previously [Molina and Molina, 1980a; 1980b] . As a
result, other destruction processes, e.g., reaction with OH, have
become important. Two new measurements [Littlejohn and Johnston,
1980; Barker _et al. , 1980] of the OH reaction indicate a
relatively fast rate, which might be expected, by analogy to the
OH + HNO-, and OH + H202 reactions. The effect of a fast rate is
similar to that for the nitric acid reaction -- reduced
stratospheric OH concentration and reduced calculated ozone
depletion. Use of the average of the new rates with that of Wine
et al. , for OH + HN03 reduces calculated depletion still further
to about 6.0 percent.
iii. Hydroxyl Radical and Hydroperoxyl Radical
Several measured values [Hack ejt al_. , 1978; Burrows
£t_ al. , 1978a; 1978b; Chang and Kaufman, 1978; Demore, 1979; and
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Hochanadel e_t al., 1972] of the rate of the OH + H02 reaction
vary over a range of a factor of 10. However, a slow rate for
the reaction is used in computer models. If the fast rate is
correct instead, or a pressure dependence exists, the effect is
similar to that of nitric acid and peroxynitric acid reduced
stratospheric OH concentration and reduced calculated ozone
depletion.
It should be noted that reduced calculated ozone deple-
tion is more nearly consistent with the results of ozone trend
analyses.
b. Pressure and Temperature Dependencies
Several minor revisions have contributed to the recent
reductions in calculated ozone depletion, and reflect the
continuing uncertainty involved in model input data. Much of
this uncertainty lies in the lack of adequate data concerning the
dependencies of rate constants on pressure and temperature. Even
where data are available, as in this example of H02 + H02,
individual studies are often incomplete. An attempt will be made
in the new NASA recommendations [Chang, 1980] to gather this rate
data for H02 + H02 into an altitude-dependent form. For most
reactions, pressure dependence has not been measured or has been
measured over a very limited range. Temperature dependence data
are considerably more satisfactory, but are far from complete.
The necessary assumptions made (usually that the reaction rate
does not vary with pressure or temperature) to permit modeling of
a reaction with incomplete data confound attempts to adequately
estimate uncertainty.
Other dependencies noted for some reactions, such as the
variation of the H02 + H02 rate with water vapor concentration
[e.g., Lii et al, 1979] have not been investigated for most
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reactions, and add to the caution necessary in viewing model
results.
c. Alternative Reaction Products
For each of the following reactions, the assumed
products (reaction a) and alternative products (reaction b) are
given.
H02 + CIO
HO + CIO
HOC1 + h
HOC1 + 0,
HC1 + 0
HO
3
+ Cl
HC1 + 0.
HO + Cl
HC1 + 0
(9a)
(9b)
(10a)
(10b)
(Ha)
(lib)
If reaction b occurred to the extent of 10 percent for any of
the above reactions, the increased production of HC1 removes
chlorine from the catalytic cycle and calculated ozone depletion
would be reduced significantly [Howard, 1980],
Multiple reaction possibilities (channels) for the
reactions are theoretically possible and experimental obser-
vations have been explained in terms of alternative reaction
pathways at stratospheric temperatures. Stimpfle et al. , [1979]
mentioned channel 9b as a possible explanation for the unusual
curvature of the rate-versus-temperature data they measured for
the H02 + CIO reaction.
Until the products of these reactions have been
determined quantitatively at stratospheric temperatures and
pressures, the uncertainty exists that ozone depletion is vastly
overestimated because HC1 channels are not included in model
calculations.
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d. Chlorine Nitrate
Chlorine nitrate is a very important species in the
stratosphere. It is formed by the reaction
CIO + N02 > C10N02
The reactants, CIO and N02, are both part of ozone destruction
cycles (Reactions 6 and 7, Reactions 4 and 5 - p. IV-8), while
chlorine nitrate is inactive. The rate of formation of chlorine
nitrate in the stratosphere and its subsequent fate can have
direct effects on calculated ozone depletion.
To evaluate the effects, the following must be known:
The rate of formation of C10N02.
The destruction (photolysis) rate of C10N02.
The subsequent reactions of the photolysis products.
All the above for any isomers, e.g., OC10NO or
C100NO of C1N03.
Since this information is not available, the effects of ClON02
and/or its isomers are estimated only with a high degree of
uncertainty. Recently, Molina e_t al. , [1980] suggested that
other isomers are important. Should they be formed and be less
stable than C10N02, calculated depletion could be increased.
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5. Atmospheric Models
As in the area of chemistry, research in modeling has
continued at a rapid pace during 1980. The models represent an
attempt to synthesize the mass of experimental and theoretical
information into interpretable results. As such, use of state-
of-the-art calculations is imperative. All information must be
considered, and the prognostic capabilities of models must be
tested whenever possible.
The key research of the past year has produced several
results:
Two-dimensional (2-D) models (including both
latitude and altitude variation) permit more
detailed calculations of the atmosphere than
one-dimensional calculations (which consider only
altitude) and allow more realistic comparisons of
calculated values with actual measurements.
A 2-D model has shown that calculated ozone
depletion occurs mainly at polar regions in winter,
and the absolute ratio of the percentage increase in
ultraviolet radiation to the percentage decrease in
global average ozone concentration is closer to 1
rather than the commonly accepted value of 2. In
other words, even if ozone is being depleted, the
projected effects will not be as deleterious as
previously predicted by the 1-D models. The most
recent chemistry reduces the latitudinal variation
somewhat, but the effect remains.
Increased concentrations of carbon dioxide and nit-
rous oxide in the atmosphere reduce calculated ozone
depletion. Accordingly, these chemicals must be
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considered in any realistic assessment of anthro-
pogenic effects on ozone.
It has been suggested recently [Johnston, 1980] that
volcanoes inject large quantities of chlorine into
the stratosphere, which should decrease ozone
severly near the point of injection. These effects
are not evident in ozone measurements.
a. 2-D Calculations
The principal advantage of 2-D model calculations is
that they more accurately represent the real world. A complete
2-D model would include a full description of chemistry,
latitudinal transport with its seasonal changes, seasonal and
latitudinal variations in solar flux and atmospheric temperature
profiles. Profiles for chemical species are calculated as a
function of latitude, altitude, season, and day or night. By way
of comparison, 1-D models include only average values of chemical
species concentrations as a function of altitude and do not
include seasonal variations.
As an example, the Oxford University 2-D model has been
used to examine variations in ozone depletion with latitude and
season [Pyle and Derwent, 1980]. The maximum depletion is
calculated to occur at polar regions in winter. This is the time
and location of lowest population, lowest biological activity,
and minimum incident ultraviolet solar flux. The Oxford modelers
find the global average "physical amplification factor", i.e.,
the percent increase in erythemally-weighted (i.e., weighted
based on its effectiveness in inducing sunburn) UV-B dose
associated with a one percent decrease in global average ozone
concentrations, is closer to 1 rather than 2. This, in turn,
reduces by that same factor any estimates of biological effects
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related to a given change in ozone (provided they are related by
the chosen weighting).
Another example is that of N2°' The biosphere produces
this gas naturally, but the source strength (the amount of N^O
produced with time) varies with latitude by about a factor of 10
from the equator to 40 degrees N. A 2-D model can deal with this
real-world situation, while a 1-D model cannot, since latitude
does not exist in a 1-D model.
It is the assumptions, uncertain input data, and simpli-
fications -- perhaps over-simplifications of 1-D models that
bring their calculated values into question -- that and the
serious discrepancy between measured and calculated profiles for
important chemical species.
b. Carbon Dioxide/Nitrous Oxide Effects
i. Carbon Dioxide
It is well-documented that the amount of atmospheric
carbon dioxide is increasing. This is projected to warm the
troposphere and cool the stratosphere the greenhouse effect.
Since the rate of ozone destruction decreases in the stratosphere
with decreasing temperature, the expected doubling of atmospheric
CO- concentration [NAS, 1979c] will increase ozone levels several
percent. A group in England recently reported [Groves and Tuck,
1979] that the calculated combined effect of C02 and CFCs on the
ozone layer is less than the calculated CFC effect alone.
Although the two separate effects are not additive, calculated
ozone depletion from CFCs is reduced by about 3-5 percent in a
model scenario in which the atmospheric CC>2 concentration is
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doubled by about the year 2030 [Penner, 1980b]. As an example,
if CFCs alone produce calculated depletion of 13.9 percent,
including CCU increases in the model would reduce this value to
8.9 to 10.9 percent.
ii. Nitrous Oxide
Agricultural fertilizer has been suggested as an
addditonal source of N-O to the stratosphere. Using 1979
chemistry, doubling atmospheric N~0 concentration by itself has
little calculated effect on ozone concentrations. However, the
combined ^0 and CFC effect reduces calculated ozone depletion by
about a factor of 2 compared to the CFC effect alone [NAS, 1979a,
p. 181]. The reduced calculated depletion results primarily from
increased chlorine nitrate formation as calculated by the models.
Updated chemistry complicates the situation by introducing a
significant effect from N-O alone. However, the calculated
combined effect of N-O and CFCs is still less than the sum of the
individual calculated effects.
c. Volcanoes
Johnston [1980] recently suggested that volcanoes
annually inject directly into the stratosphere amounts of
chlorine equivalent to 15 to 35 percent of the chlorine content
of 1975 global CFC production. If the ozone depletion theory is
correct, such massive injections of chlorine over a short period
of time would be expected to produce severe local depletion of
ozone. Long-term effects would not induce a trend, although the
model calculated "normal" ozone concentrations might be somewhat
reduced. Du Font's 2-D model calculations [Steed et al. , 1980]
show that even for low estimates of chlorine from the Mt. Agung
eruption in 1963, ozone near the equator should have been
depleted by as much as 10%, with the effect gradually spreading
over the entire globe. However, no evidence is found in actual
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ozone measurements for such a decrease. One conclusion that
could be drawn from this information is that the models
overestimate the effects of chlorine on stratospheric ozone.
6. Stratospheric Measurements
One test of the reliability of computer models is to
compare calculated altitude profiles of key chemical species with
measured profiles for the present-day atmosphere. Agreement
between the two would lend some support to the reliability of
model calculations. Conversely, disagreement must indicate error
in the model calculations. An analysis of this type is
particularly important in the case of chlorine species, which are
central to the ozone depletion theory.
a. Chlorine Species
i. Hydrogen Chloride
The amount of hydrogen chloride (HC1) calculated by the
models to be present in the stratosphere is less than that
measured in the upper stratosphere and greater than that measured
in the lower stratosphere. The difference suggests that the
model improperly distributes chlorine among the various
atmospheric chlorine species. The NAS report expressed a belief
that the problem was an artifact of latitudinal transport not
accounted for in 1-D models, and that two-dimensional (2-D)
calculations would remove the discrepancy [NAS, 1979a, p. 161].
However, the 2-D model calculated profile at the latitude (30
degrees N) where these measurements were made is similar to the
1-D calculated profile and its slope continues to disagree with
the measurements [Miller e_t al. , 1980a] . Recent revisions in
chemistry exacerbate the problem.
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i i. Chlorine Monoxide (CIO) Radical
Although calculated and measured CIO values using NASA
[1979] chemistry agree reasonably well at about 38 km, the
average measured values below 30 km in the lower stratosphere
are about one-fourth calculated values [NASA, 1979, p. 177],
Some measurements are one-tenth the calculated value. Since the
amount of CIO in the stratosphere governs calculated ozone
depletion, the latter has been clearly overestimated. The
measurements also suggest indirectly that the stratospheric
concentration of the OH radical calculated by the model is too
high. As in the case of HC1, the NAS report suggested that 2-D
model calculations might remove this discrepancy. Two-dimensional
calculations show, the discrepancy persists [Miller et a_l. ,
1980a]. Recent revisions in chemistry improve the agreement in
the amount of CIO, but a significant discrepancy in slope remains
which still leads to overestimates of CIO in the lower
stratosphere, and points to problems in partitioning of chlorine.
On July 14, 1977, J. G. Anderson [Anderson et al. ,
1980a] measured exceptionally high values of CIO in the
stratosphere, and simultaneously measured normal values of ozone.
The results are inconsistent with the ozone depletion theory.
Even though high CIO values were not recorded in subsequent
measurements, there can be little doubt the 1977 measurements
were correct, i.e., the measured amounts of CIO and ozone were
present in the stratosphere. The results can be explained in
several ways, including the possible existence of an ozone
generating cycle catalyzed by chlorine, which would imply the
ozone depletion theory is wrong.
Other measurements of CIO also differ from calculated
values [Parrish e_t £l. , 1980; Menzies, 1979]. One feature of CIO
measurements is great atmospheric variability. For example,
Anderson has recorded CIO concentrations that differ by a factor
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of 2 over an altitude difference of only 400 meters. Computer
models are incapable of dealing with this experimental reality.
b. Nitrogen Oxides
Relative to actual measurements, models calculate too
much odd nitrogen in the stratosphere including very high
concentrations of NO and HNO, in the upper and lower
stratosphere, respectively [NASA, 1979, p. 171]. The
discrepancies have not been explained. The calculated HN03/N02
ratio is also higher than the measured ratio [Miller £t al. ,
1980c]. Using the faster rates for several OH reactions narrows
this discrepancy somewhat.
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F. RESOLUTION OF UNCERTAINTIES
This section describes a number of scientific studies
4
either in progress or planned for the near future . The results
of these studies will increase our knowledge of stratospheric
science and should reduce the degree of uncertainty associated
with the effects of chlorine, if any, on the stratospheric ozone
layer.
1. Atmospheric Measurements
An important series of atmospheric measurements is
planned for 1981 which may constitute a direct test of the
validity of the Ozone Depletion Theory. Whether CFCs produce a
net decrease in stratospheric ozone can be determined by
measuring the concentrations of the postulated ozone-destroying
species and ozone at the same time and place in the stratosphere.
This simultaneous measurement of the key species 0-j, 0, C10,H02
and N02 takes into account the interactions of these radicals
with one another.
It can be demonstrated in the laboratory that CIO reacts
with 0 and Cl reacts with 0-,. The rate constants for the reac-
tions have been measured. However, in the earth's stratosphere,
there are other radicals, e.g., certain NOV and HO species,
A A
which also react with ozone and atomic oxygen. The critical
question is this: "When chlorine is added to the real strato-
sphere, does it increase, decrease, or not affect the net concen-
tration of 0-,? Due to the coupling of the chlorine, nitrogen and
4
Many of these studies are being funded by the CFC producer's
research program under management of the Chemical Manufacturers
Association (CMA) Fluorocarbon Project Panel (FPP). A summary
of this program appears as Appendix K.
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hydrogen cycles, the presence of chlorine can actually increase
the concentration of ozone in the stratosphere if it reacts
preferentially with NOV or HOV to reduce their effectiveness in
A X
destroying ozone.
An analogous situation demonstrated the effect of
interacting active species. Prior to 1977, models calculated
that the injection of NO exhaust from the jet engines of
supersonic aircraft would result in net ozone depletion.
However, when the rate constant for the reaction of NO and H02
was remeasured and used as input data, the model calculated that
in the lower stratosphere, where the ozone concentration is
greatest, the added oxides of nitrogen resulted in a net increase
in ozone.
Two experiments which are designed to measure the effect
of chlorine on stratospheric ozone are in progress and should
produce data in 1981.
J.G. Anderson (Harvard) will simultaneously measure
CIO and other species which react with ozone (H02f
N02, OH and 0) and, also, 03 itself. It will be
done in the so-called "reel-down" experiment. This
equipment is a variation of Anderson's proven CIO
measurement technique. The probability of success-
ful operation is high. These "in situ" measure-
ments, taken in a single balloon flight, will
produce several concentration profiles for key
species over 10 km altitude intervals in the
stratosphere. Between 28 and 38 km, where transport
is slow compared with the chemical interactions, the
measurements can be interpreted unequivocally.
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Below 28 km, the measurements may require a
correction for transport. A valid method of
accomplishing this is being established.
P. Solomon (State University of New York) has
developed and tested a ground-based ultrasensitive
millimeter-wave detector for measurement of CIO and
03 [Parrish e_t al., 1980]. The total vertical
column amounts of CIO and 0, are measured with it.
A concentration profile of these species with
altitude can be calculated from the shape of the
measured absorption lines. This unit has already
been used to make over 30 CIO measurements which are
consistent with the rapid falloff of CIO in the
lower stratosphere, observed repeatedly by Anderson
using a different measurement technique. This
equipment, which can simultaneously measure CIO and
0-j, will be moved to a location in New Mexico where
clear skies will allow almost daily measurements. A
significant body of data will be generated in 1981.
The Atmospheric Lifetime Experiment (ALE) to measure the
lifetime of CFC-11 and CFC-12 in the atmosphere is still in
progress. A preliminary estimate is that the atmospheric
lifetime of CFC-11 is about half that assumed to be the case from
solely stratospheric destruction processes. The estimate was
made with only 18 months of data and, accordingly, the error bars
are very wide, i.e., 7 years to infinity. In 1981, 24 months and
30 months of data will become available which should better
define the CFC-11 lifetime and reduce the error bar range
substantially. The CFC-11 lifetime should be defined in 1982 and
a preliminary estimate of the CFC-12 lifetime should also be
available. If the preliminary lifetime for CFC-11 is confirmed,
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and CFC-12 behaves similarly, i.e., its lifetime is about half
that assumed to be the case from solely stratospheric destruction
processes, calculated ozone depletion would be halved.
In relation to the ALE program and the question of
tropospheric sinks for CFC-11 and CFC-12, a program is in
progress to measure the concentrations of CFC-21 in the
atmosphere at several sites and to correlate them with CFC-11
concentrations. These studies may establish a mechanism for the
conversion of CFC-11 to CFC-21 in the troposphere.
The fluorocarbon industry program is actively seeking
[Upper Atm. Programs Bull., 1980] to fund experiments to measure
total chlorine in the stratosphere. Such measurements would
undoubtedly provide increased understanding of stratospheric
chlorine chemistry since the chlorine content of the stratosphere
is an assumed value. Two methods are under development. The
first involves collecting samples on activated charcoal filters
followed by neutron activation analysis [Berg, 1980] . The second
technique, which is funded by the industry research program,
involves decomposition of the sample by plasma or microwave
discharge, followed by measurement of the chlorine atomic
emission lines [Howard, 1977]. Initial results from at least one
method should be forthcoming in 1981 or early 1982.
2. Modeling
Ozone trend analysis studies continue, and will include
recent ozone measurements from the Dobson stations and
satellites, Umkehr measurements, attempts to correlate ozone
trends with other meterological variables, and methods to
establish that the Dobson stations do measure average global
ozone, as suggested by preliminary studies. An important part of
the program will be to calculate the trend in ozone with the most
recent ozone measurements from the Dobson station network.
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Another important aspect of modeling is to refine and
use 2-D modeling capability along with atmospheric measurements
to validate model simulations of the present atmosphere. Other
2-D model studies will be directed to better understanding of the
latitudinal distribution of effects induced by atmospheric
perturbations, e.g., volcanoes, anthropogenic pollutants, etc.
The 2-D studies will complement 1-D calculations and will help to
quantify some of the averaging assumptions necessary in 1-D
models.
The effects of increasing concentrations of C02, and
possibly N20, in the atmosphere are of concern, and these effects
must be better defined. A number of modeling groups are studying
this important question as it relates to the greenhouse effect
and its effect on calculated ozone depletion.
3. Chemistry
Major uncertainties to be addressed in chemistry include
the products of important chemical reactions, and the pressure
and temperature dependence of reaction rates. These three items
are obviously related since it is necessary to measure reaction
products and rates over the range of temperature and pressure
encountered in the stratosphere. This significant undertaking is
in progress for several important reactions, e.g., OH + CIO, OH +
HN03, and results should be forthcoming over the period
1981-1983. .Most of the reaction product studies have the
potential to reduce calculated ozone depletion, or to leave the
value unchanged, rather than to increase ozone depletion
estimates.
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G. SUMMARY
In the preceding discussions, a number of major
scientific aspects of the CFC/Ozone Issue have been addressed,
and conclusions drawn should impact directly on the need for
possible regulation. Each of these issues has been inadequately
dealt with by the EPA in the ANPR. Briefly, we have shown:
Statistical analyses of real-world ozone measure-
ments (ozone trend analysis) from the worldwide
Dobson measuring network show a slight increase in
ozone has occurred during 1970-1979. The analyses
are sufficiently sensitive to detect an increasing
or decreasing trend in ozone concentration of +_ 1.0
to + 1.5 percent over this period. In contrast, NAS
[1979a] stated 2.1 percent depletion should have
occurred according to model calculations. The
results suggest some combination of the- following
possibilities:
1. Computer model calculations significantly
overestimate ozone depletion by CFCs, or
2. An opposite trend natural or man-made -- is
offsetting any ozone depletion caused by CFCs.
Recent results in chemistry and modeling support the
former option.
The Lawrence Livermore Laboratory (LLL) recently
reported that their central value for calculated
future potential ozone depletion has been reduced
from 18.6 percent to 13.9 percent through revisions
in model input data. This change has been made
since publication of the NAS report, which reported
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the 18.6 percent value. The 18.6 percent calculated
value was "adjusted" in the report to 16.5 percent
the value cited by the ANPR. As the NAS panel
relied on the LLL model for its analyses, the 13.9
percent value should now be taken as the NAS base
case, not 18.6 percent. To provide a clear relation
between new results and the NAS report, we employ
13.9 percent as the base case in the discussion that
follows.
One-dimensional computer model calculated concen-
trations of CIO (the critical chemical intermediate
in the ozone depletion theory) in the lower strato-
sphere (made using NASA [1979] recommended chemis-
try) exceed the "normal" range of measured values by
about a factor of 4. This discrepancy remains in
two-dimensional model calculations, suggesting basic
errors in understanding of stratospheric processes.
If calculated values of CIO concentrations are arti-
fically reduced in the model to agree with the
measured values, calculated ozone depletion is
reduced from 13.9 percent by more than a factor of
2^. New chemical data have led to some improvement
of CIO agreement, and a concomitant reduction in
calculated ozone depletion.
The rates of chemical reactions used in model
calculations are of major importance. For example,
several reactions of OH radical, e.g., with HNOj,
have been recently reported to have rate constants
larger than those recommended by NASA [1979] . The
effect on model results is a reduction in calculated
OH radical and CIO in the lower stratosphere. The
larger rate constants reduce calculated ozone deple-
tion to about 6 percent - 9 percent. These figures
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represent the model result for tentative 1980 NASA
recommended chemistry along with the recent first
measurement of a rate for OH + HCUNCU.
Preliminary results from the Atmospheric Lifetime
Experiment indicate (although with large uncer-
tainty) that only about half of the CFC-11 released
at ground level is transported to the stratosphere.
Presumably, CFC-12 would behave similarly. Since
calculated ozone depletion is proportional to the
amount of chlorine injected into the stratosphere,
these results would further reduce all calculated
depletion values by up to a factor of 2.
Unexpectedly high measured values of CFC-21 and
CFC-22 in the troposphere suggest they may be
degradation products of CFC-11 and CFC-12,
respectively. High levels of CFC-21 seem to
correlate with the movement of air masses over the
Sahara Desert. This could indicate a destruction
process for CFC-11 and CFC-12 before they reach the
stratosphere, and thus lead to a like reduction in
the amount of calculated stratospheric ozone
depletion.
Significant discrepancies exist between measured and
calculated values of several species in the
atmosphere, in addition to CIO, among which are the
HCl/HF ratio, and the HN03/N02 ratio. These
discrepancies remain in recent model calculations
and lend further support to the suggestion that
basic errors exist in our understanding of strato-
spheric processes.
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One-dimensional models, such as used by NAS,
average, and hence ignore, the known latitudinal
(north to south) and seasonal variations in
stratospheric ozone concentrations. For this and
other reasons, one-dimensional models are useful
only diagnostically. Alone, they are not adequate
for prognosis. Since models provide only global
averages, actual measurements, taken at specific
locations, cannot be compared with model
calculations. Two-dimensional models are being
actively developed to reduce such uncertainties.
A two-dimensional model at Oxford University shows
that calculated ozone depletion is greatest at high
latitudes (the polar regions) and in the winter
season. Since ozone is at its maximum, and
ultraviolet flux at its minimum, at that time and
location, any possible biological effects of ozone
depletion are minimized.
In at least three important chemical reactions,
alternative products to those now assumed have been
suggested. In every case, HC1 is an alternative
product. This is very important because the
formation of HC1 removes active chlorine from the
theoretical catalytic ozone depletion cycle. (Even a
10 percent channel to HCl in the reaction of OH +
CIO would reduce calculated ozone depletion signifi-
cantly) . Studies are in progress to identify
quantitatively any HCl production channels from the
reactions.
Other isomers of ClNO^ may be produced along with
ClONOj. Less stable isomers could reduce the
effectiveness of this holding tank (a reservoir of
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inactive chemical species which may be converted to
an active ozone depleting form), and increase
calculated depletion. Likewise, more stable isomers
could reduce calculated depletion, but the situation
is very uncertain.
General uncertainty in reaction rates, solar flux,
transport, etc., could easily vary the calculations
over a wide range of values.
When the effects of increased concentrations of CC^
and/or ^0 in the atmosphere are considered
simultaneously with those of CFCs, calculated ozone
depletion by CFCs is reduced.
Volcanoes may annually inject chlorine into the
stratosphere equivalent to 35 percent of that in a
year's global production of CFC-11 and CFC-12. The
local effects of these injections would be extremely
large according to theory, but have not been
observed.
The major conclusions one may draw from these points
are:
Ozone depletion has not been detected.
Calculated ozone depletion is now about one-half or
less that stated in the NAS report.
Preliminary scientific developments, if confirmed,
will substantially further reduce calculated ozone
depletion.
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It is useful to summarize the changes in the theory as
demonstrated by model calculations of steady-state depletion. We
present below several of the developments and the corresponding
theoretical depletion taking each effect into account:
Calculated
Ozone
Depletion
1979, NAS calculated steady-
state depletion (from LLL
Model). (This number was ad-
justed downward by NAS to 16.5%
to account for possible tropo-
spheric sinks and feedbacks. That
adjustment will not be made below).
18.6%
(16.5%)
Summer 1980, LLL model results were
revised to include several minor
changes in rate constants.
13.9%
Summer 1980, results revised to
include Wine et al., [1980] rate
for OH + HN03 -* H20 + N03.
Fall 1980, results revised to
include all tentative NASA
recommendations.
9.5%
7.5%
Fall 1980, results revised to
include new measurement of OH +
H02N02 [Littlejohn and Johnston, 1980].
6.0%
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Other preliminary results may be considered
with respect to their individual effects on
this last result:
Calculated
Ozone
Depletion
If C1N03 isomers are very unstable
photolytically
If atmospheric lifetimes of CFC-11
and CFC-12 are reduced by a factor
of 2.
6%-> 7-8!
6% -» 3%
If
effects are considered
6%-» 1-3%
and finally,
If all three of the above effects
are considered together (in the
above order) 6%
4%
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Stated simply and directly, the potential for ozone
depletion is currently perceived to be far less than it was only
one year ago. While major remaining uncertainties could easily
affect that conclusion in either direction, most of the movement
is expected to be in the direction of reduced calculated ozone
depletion. But regardless of how the calculated depletion
numbers are affected by resolution of some of the uncertainties^
the bottom line or "fail-safe" is the ability of ozone trend
analysis to detect even small trends in actual ozone concen-
tration. This ability, coupled with the slower calculated rate
of depletion implied by current models, provides a sophisticated,
capable early warning system, with greatly reduced numerical
overshoot values if and when depletion is detected. The
insistence of EPA on ignoring all these developments and rushing
into regulation justified with an out-of-date science assessment
is unwarranted.
IV-63
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V. THE QUESTION OF RISK
Page
A. INTRODUCTION 2
B. IMPACT OF UNCERTAINTIES IN THE UNDERLYING SCIENCE
OF THE OZONE DEPLETION THEORY ON RISK
C. IMPACT OF UNCERTAINTIES IN THE POTENTIAL
EFFECTS OF OZONE DEPLETION ON RISK 14
D. PROBABILITY AND TIMING OF REDUCING UNCERTAINTIES 27
E. RISK IN WAITING - RISK VERSUS TIME 32
F. IS THE RISK DEVELOPING AS PREDICTED.-> 39
G. AVAILABILITY AND SIGNIFICANCE OF AN EARLY
WARNING SYSTEM 43
H. THE RELATIONSHIP OF THE INTERNATIONAL ASPECTS
OF THE ISSUE TO RISK 46
I. RISK CREATED BY REGULATION AND THE NEED FOR
RISK - RISK COMPARISON 48
J. APPROACHES WHICH ARE INAPPROPRIATE FOR ASSESSMENT
OF RISK ON THE CFC/OZONE ISSUE 53
K. SUMMARY AND CONCLUSIONS 60
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A. INTRODUCTION
The key underlying issue in the CFC/Ozone controversy
is risk how to assess it; how to manage it. This is a com-
plex issue because it is made up of so many interlocking
questions, for example:
What is the current or future risk to human health
and the environment from continuing release of
CFCs?
How certain is the risk?
Does the projected risk necessitate acting
immediately?
If not, what is the risk in waiting?
Will the benefits from waiting, e.g., better
information, be worth the risk in waiting?
What is the risk associated with acting
immediately?
What is the balance between the risk associated
with waiting and the risk associated with
immediate action?
Although the risk question is complex, the objective
of risk assessment and management may be stated simply: to
determine the course of action which will be recognized as wise
at a future time.
EPA has stated that:
"If [EPA waits] until better data are in on
whether chlorof luorocarbons deplete the earth's
ozone layer, either the theory will be wrong and
there will be no harm done or the theory will be
right and it will be too late to do anything about
it". [Jellinek, 1980b]
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We believe that this approach to the complex issue of
ozone depletion risk is not supportable by the available facts.
On the one hand, based on currently available information, EPA
greatly overstates the risk from not acting immediately; and, on
the other hand, EPA ignores the substantial potential risk which
could be incurred from premature or unnecessary regulation.
In order for a risk assessment to be of use to the
policy maker, and credible to all participants in a rule-making
process designed to manage the risk, it must be accurate and
thorough. All important elements of the issue which bear on
risk must be addressed and integrated into the whole. A risk
assessment which ignores critical components, for example, the
question of uncertainty or the relationship of projected deve-
loping risk versus time, will not provide an accurate view of
the true situation. Regulation based on incomplete or inaccu-
rate risk assessment may be bad regulation and subject to legal
challenge.
In this section of our ANPR response, we discuss
important risk components which must be included in a properly
balanced analysis of the CFC/Ozone Issuecomponents which to
date have not been adequately addressed. These include:
The impact of uncertainties both in the underlying
science and in estimates of the potential effects
of ozone depletion.
The importance, probability and timing of reduc-
tions in these uncertainties.
The relationship of these uncertainties to the U.S.
versus world regulatory status and potential
actions.
The question of risk versus time, which encompasses
questions such as, "Is the risk developing as pro-
jected?", "What is the risk in waiting?", and "Is
there any way to provide an early warning system?"
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The need to develop an assessment of the risks
created by regulating CFCs and to balance these
risks with the risks from not regulating.
The last part of this section is a discussion of a
number of approaches to the question of risk which we have
identified in the ANPR and in previous Agency statements and
documents approaches to the question of risk which we believe
are not conducive to the obtaining of the thorough and proper
risk determination needed for the CFC/Ozone Issue.
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B. IMPACT OF UNCERTAINTIES IN THE UNDERLYING SCIENCE OF THE
OZONE DEPLETION THEORY ON RISK
1. Introduction
In an ideal rule-making situation, the risk from a
chemical under assessment is known from experimentation and
testing, its benefits are also known, and a determination can be
made as to what extent it is reasonable to give up the benefits
in order to lower the risk from its continued use. When the
degree of risk is not well-known or when the accuracy or vali-
dity of the stated risk is highly uncertain, this determination
becomes significantly more complex and subject to major error.
Such is the situation with CFCs and the theory of stratospheric
ozone depletion.
In this instance, there are predictions and estimates
of risk from continued use of CFCs, but there is substantial
debate over how accurate or "certain" these estimates really are.
The underlying importance of these risk uncertainties
is their impact on the regulatory decision processAre estimates
of risk likely to prove to be sufficiently accurate or "certain"
that supportable decisions based on them may be made? The more
uncertain the data base on which risk assessments are made, the
less certain the accuracy of the risk assessments and, thus, the
less certain it is that regulatory decisions will prove to be
correct.
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Consequently, we believe the question of uncertainty
as it applies to the underlying science and data base of the
Chlorofluorocarbon/Ozone Issue is critical. Therefore, we
review below in section 2 the major existing uncertainties and
their significance to risk assessment.
In section 3 we discuss errors made by EPA in its
treatment of uncertainties in the ANPR. These deficiencies in
EPA's treatment of uncertainties are critical. Their existence
throws into question the validity of the risk assessment being
used by the Agency to support its regulatory decision.
The uncertainties in atmospheric science are discussed
in detail in Section IV and Appendix E; uncertainties in effects
of ozone depletion are discussed in Appendix F.
2. Major Current Uncertainty Sources in the Atmospheric
Science
To review from Section IV, the major existing uncer-
tainties in atmospheric science are:
Quantification of CFC emissions actual
spheric removal rates.
tropo-
"Scientif ic uncertainties are introduced both in estimates of
ozone depletion and in estimates of the effects of ozone deple-
tion. The importance of the former to risk determination is
discussed in this section; the importance of the latter in sec-
tion V-C. The effects of these uncertainties are cumulative.
At each successive step, it is difficult to intelligently discuss
a given step and its uncertainties without tacitly or explicitly
assuming "best guess" conclusions of each preceding step. As an
example, the preface of the NAS/CISC report, on effects of ozone
depletion [NAS,1979b], acknowledges dependence on the
preceding NAS/PSCT report on the underlying science
[NAS,1979a]. The cumulative nature of the uncertainties
must be kept prominently in mind.
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Quantification of actual transport rates of impor-
tant species in the troposphere and stratosphere,
vertically and laterally.
Lack of determination that relevant atmospheric
chemistry is either accurately or completely
understood.
Lack of demonstration that the computer simulations
("models") used can provide accurate predictions
of future atmospheric conditions.
Interpretation of model results and their relation-
ship to the present and future atmosphere.
Quantification of ozone changes into changes in
UV-B and then into changes in damaging UV (DUV)
using appropriate action spectra. (An uncertainty
that bridges the atmospheric science and the
effects of ozone change.)
Discrepancy between calculated ozone depletion and
observed trends in ozone.
It is commonly argued about the nature of uncertainty
that the high range is as likely as the low range and since the
high range, if correct, implies greater risk, it should figure
disproportionately in risk assessments. However, this should
not be true if the predicted risk occurs gradually over time,
and methods exist for detecting the effect. Under these condi-
tions, the larger predicted environmental effects in the uncer-
tainty range clearly should be detected fairly early. If they
are not detected, one may conclude that the high range can be
adjusted downward. The CFC/Ozone Issue is just such a case.
In the CFC/Ozone Depletion Issue, ozone trend analysis
already provides an early warning technique for changes in ozone.
The absence to date of any detectable downward trend in ozone
concentrations indicates that the greater risks associated with
the high range of ozone depletion estimates may be discounted.
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In addition, a monitoring system for gathering and reporting CFC
production and emissions has been in place for several years, so
a high range of ozone depletion as a result of unknown
2
emissions is not a concern.
The uncertainties which exist surrounding the detection
of ozone depletion (about +1 to + 1.5 percent depletion) and
quantification of CFC emissions (about + 5 percent) are subject
to further reduction but are already small in proportion to the
uncertainties surrounding our understanding of atmospheric pro-
cesses and our ability to model those processes.
Ideally, the uncertainties are reducible to the point
where measurements and modeling are consistent with each other.
As discussed in Section IV, the opportunity for major progress
in this direction exists in the coming years. (Meanwhile it
would be folly to reject that which is measured with relatively
great certainty in favor of that which is calculated with rela-
tively little certainty). In fact, already there is evidence
that the uncertainty ranges assigned for the modeling of some
atmospheric processes have been underestimated (See Appendix E);
more recent values of certain factors lie outside the correspond-
ing "confidence limits" adopted by NAS [NAS, 1979a].
Introduction of recent revisions into modeling has
reduced the calculations or estimates of future ozone depletion.
Other current research and better model simulation are expected
to reduce depletion estimates further. Therefore, the most
This is separate from growth. Growth in emissions, should
current trends be reversed, would be known and not an addi-
tional uncertainty. Uncertainty develops if emission levels
are not known.
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likely scenario is a progressive reduction of ozone depletion
estimates towards the shrinking uncertainty range, which is
being established through continuing improvements in the ozone
data base and in the technique of ozone trend analysis. And the
combination of no measurable ozone depletion and model calcula-
tions of declining theoretical ozone depletion reduces the risk
associated with a regulatory postponement while the research
.progresses.
The following section discusses EPA's treatment of
uncertainties in the ANPR. Because of the cited deficiencies,
EPA's risk assessment substantially overstates the risk relative
to a risk assessment based on an up-to-date treatment of uncer-
tainties (as highlighted above).
3. Errors Made by EPA in Treatment of Uncertainties
a) EPA Over Relies on the "Key Findings" Section of
the NAS Report [NAS, 1979a]
The first major error in EPA's treatment of uncertain-
ties is that the Agency overestimates and misrepresents the cer-
tainty of future ozone depletion calculations, apparently due to
overreliance on the "Key Findings" Section of the NAS Report
[NAS, 1979a], while ignoring qualifying statements in the
.body of the report. It is clear from a careful reading of the
full NAS Report that the panel was hazarding a rough estimate of
the probability of stratospheric ozone depletion by CFCs based
on information available to them at the time of writing (summer
1979) .
As examples, the NAS Report acknowledges (p. 17):
"There are two possible sources of error that, inherently,
cannot be quantified." and,
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"It is obviously impossible to estimate the unknown with
any precision."
Such qualifications do not appear in EPA's ANPR discussion of
uncertainties in ozone depletion estimates.
b) EPA Places Sole Reliance on the NAS Report [NAS,
1979a]
A more basic error on the part of EPA is its exclusive
reliance on a report which, even at the time of issuance, did
not treat adequately the question of uncertainty and which was
in conflict with other assessments available at that time.
The adequacy of the NAS treatment of uncertainties
itself is discussed in greater detail in Du Font's submission
[Du Pont, 1980a] , where it is noted that the NAS Report's
conclusions:
* Conflict strongly with considered viewpoints of
much of the world's scientific community, for
example, the October 1979 report by the United
Kingdom's Department of the Environment [UK DOE,
1979] .
* Are not substantiated by the data used in the NAS
Report.
Are based, in part, upon serious inconsistencies
and omissions in the body of the NAS Report.
Attempt to quantify fully the uncertainties in the
calculated predictions by including subjective and
unsupported assignments of precise uncertainty
ranges due to factors which the body of the NAS
Report itself describes as "unquantifiable."
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A comparison of the treatment of uncertainty by the
NAS and the UK reports is attached as Appendix L, but two
quotations from each will serve to illustrate the differences:
NAS, 1979a
UK DOE, 1979
"The uncertainties in the
chemical rate coefficients,
in atmospheric transport,
and in the use of one-di-
mensional models have been
combined to give an overall
uncertainty range of a fac-
tor of 6 within a 95 per-
cent confidence level."
"There have been consider-
able improvements in the
computer model and in the
laboratory and atmospheric
measurements which have
reduced the uncertainty
range."
"It is not therefore
realistic to assign over-
all uncertainty limits to
our calculated ozone per-
turbations; deficiencies
in our basic knowledge of
the processes establishing
the composition of the
stratosphere and in the
modeling technology cast
doubts on their validity."
"The STRAC [The UK Strat-
ospheric Research Advisory
Committee] report deals
extensively with the uncer-
tainties in the model re-
sults. Not all of them
could be assessed quanti-
tatively and it is not
possible to assign error
ranges to these estimates
that allow for all the un-
certainties. These have,
however, widened rather
than narrowed since Pollu-
tion Paper 5 was published
[1976]."
c) EPA does not Acknowledge Conflict Between the NAS
Report and More Recent Reports
A related error in EPA's presentation of uncertainty
in the ANPR is in not weighing the NAS Report's treatment of
uncertainties against reports which have become available since
issuance of the NAS Report, for example, the European Economic
Community, June, 1980 analysis of the science [EEC, 1980].
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The key findings of the EEC report, detailed below, provide
sharp contrast with the NAS assessment:
There is now much more information available about
the photochemical theory of ozone in the strato-
sphere than there was ten years ago.
There are still more uncertainties, however;
The models have helped to improve knowledge of the
stratosphere;
As they [models] are simplified, they cannot
fully describe the behavior of the atmosphere and
its minority constituent parts;
In the next few years more sophisticated models
must be developed which can take into account
simultaneously the chemical, thermal and dynamic
aspects of atmospheric processes;
This is a task which cannot be completed within
five years but steady efforts must be made in this
direction;
Permanent observation and monitoring of ozone are
therefore particularly important;
At present there is nothing to indicate that CFCs
have had a genuine effect on the ozone layer
(emphasis added);
Observation facilities should therefore be deve-
loped i.e., both satellite measurements, which
supply a large number of observations, and ground
measurements, which are easier to calibrate;
The examination of the balance sheets of the
minority constituent parts should be continued in
order to detect natural and artificial sources or
sinks of these compounds in the atmosphere;
It is vital to study simultaneously all the
effects of human activities on atmospheric ozone.
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The problem of ozone and its vulnerability to
compounds of human origin has now become a per-
manent problem. The figures now advanced will
have to be revised frequently to take into account
the development of knowledge, the degree of
sophistication of the models and the observations
of the minority constituent parts.
d) EPA Relies on an Out-of-Date Report While Ignoring
Recent Critical Developments in the Science
A last failing by EPA is in not weighing the accuracy
of the NAS [1979a] treatment of uncertainty against recent
developments in the science. As an example, the NAS rather
confidently assessed that it was quite unlikely there would be
any major changes forthcoming in the area of reaction kinetics.
Yet, work within the last year has produced results which sig-
nificantly change a number of reaction rate constants, with the
consequence that the depletion prediction made by the NAS of
16.5 percent now is reduced by approximately half.
Refinements in chemistry and atmospheric modeling
could lead one to conclude the uncertainties are being narrowed
and therefore the ability to make a proper regulatory decision
has been enhanced. However, to the contrary, the refinements
have led to an increased awareness of the large existing uncer-
tainty. Moreover, the results of ozone trend analysis further
throw into question the utility of the NAS1 assessment. These
critical actual measurements (which have been available to the
policy maker) are the only measurements which reflect what
actually is happening to stratospheric ozone. They indicate that
no problem is developing. As more measurements become available,
the certainty of what actually is occurring increases, and the
measurement series can better test the validity of calculations
of ozone depletion based on the theory.
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C. IMPACT OF UNCERTAINTIES IN THE POTENTIAL EFFECTS OF OZONE
DEPLETION ON RISK
1. Introduction
The underlying risk issue actually is not whether, or
to what extent, CFCs may deplete stratospheric ozone, but
rather, what would be the consequences to human health and the
environment should such depletion occur. More attention needs
to be given to these possibilities and to the likelihood of
their occurring. Too often, discussion has focused on a numbers
game between various computer calculations of a hypothetical,
far in the future, depletion of ozone (which assumes continuing
emissions at current levels ad infinitum). A more realistic
assessment would be: "If ozone depletion were to occur at x%
per year, what would be the unavoidable future consequences for
each ongoing year of emissions at current levels, and to what
extent would these consequences justify curtailing CFCs now from
their current uses?" Critical factors in this evaluation are
the confidence with which these projections for the future are
made and the time it will take to improve the confidence level.
In other words, what is the incremental risk of delay? A
related question has to be: "How much depletion could occur
before the attendant increase in UV caused a problem, i.e., what
is the danger threshold of ozone change?"
Our observations here are almost in parallel to those
presented in the previous section: a) the more uncertainty
surrounding these estimates, the less likely a correct regula-
tory decision can be made, and b) EPA's assessment of these
uncertainties is grossly out of phase with the best currently
available information. In fact, the uncertainties associated
with.the predicted effects of ozone depletion out-weigh even the
very significant uncertainties associated with the issue of
whether ozone depletion is occurring as predicted. This is
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because the data are more sparse and the relationships more
tenuous. Yet a regulatory decision should be based more on
whether any harm is developing, or is likely to develop, than on
whether certain chemical or physical changes may occur in the
stratosphere. Thus, the question of uncertainties in the area
of potential effects of ozone depletion are of paramount
importance.
Because EPA again bases its assessment almost ex-
clusively on the NAS Report, we begin our discussion with a
critique of the NAS Report by the Committee on impacts of
Stratospheric Change (CISC) [NAS, 1979b] . In Du Font's
earlier critique [Du Pont, 1980b] of the CISC report we
commented:
"The CISC Report shows that there has been a di-
verse, but neitner extensive nor definitive, research
effort into the possible impacts of increased damaging
ultraviolet light (DUV) on the world's plant and animal
(including human) eco-systems. That effort has demon-
strated a number of potential interactions between in-
creased DUV flux to the earth's surface and those eco-
systems. However, the significance to the real world
of those potential interactions (with the possible ex-
ception of nonmelanoma skin cancer) has not been
adequately demonstrated. Virtually all of the exper-
iments have been exploratory or preliminary in nature.
The body of the CISC Report and its associated
appendices generally provide a rational discussion of
all relevant experimental work to date, taking parti-
cular care to point out a variety of experimental
uncertainties and failings that may affect any conclu-
sions to be drawn. Most conclusions found in the body
of the report also include relevant qualifications.
However, at least three of the "Key Findings" (concern-
ing melanoma, damage to crops, and damage to aquatic
organisms) go beyond the evidence presented in the
report. Each describes as fact something which is
explicitly stated in the report as an unverified
possibility. Since this report describes a portion of
the evidence on which EPA will make its regulatory
decisions, it is imperative that the Agency consider
the whole report, avoiding reliance 'on the overly
conclusive "Key Findings."
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And we indicated in the letter of transmittal to EPA
[Halter, 1980] that we considered:
"...the subject matter of the CISC Report
necessitates the assistance of outside consultants in
order to prepare more complete comments. Should we be
successful in obtaining more in-depth critiques, these
will be forwarded to you."
The critiques have been obtained and are listed below:
Predicted Effect/Concern
from Ozone Depletion
Human Skin Cancer
(Appendix F-l)
Measurement and
Instrumentation
(Appendix F-2)
Agricultural Crops
(Appendix F-3)
Aquatic Ecosystems
(Appendix F-4)
Author/Affiliation
Professor Frederick Urbach, M.D,
Center for Photobiology
Temple University School of
Medicine
Philadelphia, PA
Dr. Wilj.iam H. Klein, Director
Smithsonian Radiation Biology
Laboratory
Rockville, MD
Professor R. Hilton Biggs
Institute of Food and Agricul-
tural Science
University of Florida
Gainesville, FL
Dr. David M. Damkaer
University of Washington
Seattle, WA
There is striking unanimity in the appended reviews.
Each reviewer acknowledges that the body of the NAS report and
its appendices provide a reasonably good status report, as of
1979, of the several areas of knowledge, and point to the
numerous caveats and acknowledgements of inadequate data bases
for conclusions contained therein. The reviewers differentiate
this status report, which is what it was intended to be, from
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any form of final report, which it was not intended to be. The
reviewers express substantial concern over the summary and Key
Findings sections where the state of knowledge is oversimplified
and where the multitude of necessary qualifications are largely
omitted. We note that it is these very sections of the report
which seem to predominate EPA's statements.
There is further unanimity that in all effects areas
there is no data base to predict quantitatively the effects of
ultimate depletion and no basis to predict an imminent catas-
trophe . The need for research is emphasized strongly, and fre-
quently specifically. The consultants conclude that the data
base identifies possibilities which should be the basis for such
further research. And it is acknowledged that there is time for
research and that the hazard in waiting for research results for
a limited period is negligible. Specifically, Dr. Urbach
comments:
"Finally, calculations, using worst case
assumptions based on NAS data, strongly suggest that a
5 year delay in regulation of CFC will not have a dis-
cernable effect on increases in incidence of [nonme-
lanoma skin cancer] or [malignant melanoma]."
And Dr. Biggs concludes:
"...the degree of uncertainty that is associated
with the possibilities would seem to indicate that the
best course of action would be to proceed for a
limited period of time to mount a good research effort
to reduce (a) the uncertainties associated with
knowing the degree of stratospheric changes expected
in relation to time, say five years when some verifi-
cation of whether stratospheric ozone changes predicted
by atmospheric scientists is actually occurring, and
(b) those uncertainties associated with biological
effects of UV-B radiation on plants."
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Highspot summaries of the consultants' findings follow
in sections 2-6. The full reports appear in Appendix F.
2. Human Skin Cancer Effects
In the ANPR, EPA quotes NAS' [1979b] estimates of
increased skin cancer incidence without mention of the cautionary
statements in the NAS reports or the many conflicting conclusions
on the causes of skin cancer, melanoma in particular. In this
section, we will very briefly present some qualifications which
should be made on EPA's and the NAS/CISC Report's statements on
skin cancer. These statements are based on the review recently
performed by Dr. Frederick Urbach for the Du Pont Company.
The most important conclusion by Dr. Urbach, from the
point of view of the regulatory decision-maker, is that no dis-
cernable effect on the incidence of malignant melanoma or non-
melanoma skin cancer is to be expected due to a 5-year postpone-
ment of regulatory action by the United States. (Dr. Urbach's
full review appears in Appendix F-l).
a. Melanoma Skin Cancer
For most forms of malignant melanoma (the rare but
often fatal type of skin cancer), medical data show that inci-
dence is not related to chronic repeated damage from accumulated
doses of UV-B. There is, thus, no possibility of assuming any
reasonable dose-response relationship between UV-B dose and
changes in malignant melanoma incidence.
The use by CISC of essentially the same "model" used
to calculate changes in nonmelanoma skin cancer incidence from
projected ozone depletion is unsupportable.
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What can be said about malignant melanoma is that a
real worldwide increase in incidence has occurred in the absence
of any ozone depletion and that it is middle class males and
females who show this increase, not those habitually or
occupationally exposed to UV-B.
No discernable effect on malignant melanoma incidence
is to be expected from a 5-year postponement of any regulatory
action on CFCs.
The above conclusions should be contrasted with EPA's
ANPR statements:
"Assuming continuation of present patterns of sun-
light exposure, NAS predicts a 16 percent ozone deple-
tion would result in several hundred thousand addi-
tional cases of nonmelanoma skin cancer annually, and,
with somewhat less certainty, in several thousand addi-
tional cases of melanoma skin cancer (often fatal)
annually in the United States alone."
and:
"For melanoma, this statistical relationship
[between increased incidence and increased ozone
depletion] is less certain but appears to be about
two to one."
The semiquantitative estimates of malignant melanoma
referred to in the ANPR are speculative.
b. Nonmelanoma Skin Cancer
Nonmelanoma skin cancer is the common but rarely fatal
skin cancer. It has the best prognosis of any cancer. While a
correlation between most, but not all, nonmelanoma skin cancer
incidence and solar UV-B exposure can be reasonably inferred,
existing "models" for quantifying the dose-response relationship
need considerable refinement.
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Present methods for estimating changes in nonmelanoma
skin cancer incidence following a calculated change in UV-B
clearly overestimate effects. Present methods, for instance,
uncritically use the worst relationship between calculated
changes in UV-B and the presumed damage that such changes could
produce, and they make no allowance for attenuation of UV-B in
the outer skin cells. These outer skin cells are not capable of
being transformed into cancer cells since they typically are not
capable of division.
Dr. Urbach's review concludes that the NAS/CISC
[NAS, 1979b] projections of increased skin cancer are based
on all nonmelanoma skin cancer, while in fact about one-third of
basal cell carcinoma occurs on sites and under conditions which
suggest this subset has no relationship to UV exposure.
Further conclusions are that: Existing models, in-
cluding the calculations made by CISC, need considerable refine-
ment before realistic estimates of changes in nonmelanoma skin
cancer incidence can be made for projected depletions of ozone.
Present models, including the techniques used by CISC, clearly
overestimate the risk.
No discernable effect on nonmelanoma skin cancer
incidence is to be expected from a 5-year postponement of any
regulatory action of CFCs.
These conclusions should be contrasted with EPA's
emphatic statements in the ANPR that:
"A relationship has been epidemiologically estab-
lished between increased DUV exposure and incidence of
nonmelanoma skin cancer. For nonmelanoma skin cancer
approximately a four percent increase in incidence can
be expected for every one percent increase in ozone
depletion on average."
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3. Natural Variations in Normal Background Solar Radia-
its Simulation and its Measurement
Comparison of data between Rockville, MD (39 N) and
Panama (9°N) shows approximately a 340 percent natural
increase in ultraviolet radiation across this 30° latitude
band, or approximately 0.16 percent average increase per mile
(see Appendix F-2). The variation is almost 8 times larger than
the 44 percent ultraviolet increase which NAS/CISC [NAS,
1_9 7_9_b_j ca 1 cu 1 ated J:o_ result from an ultimate ozone depletion
of 16.5 percent.
This observation provides some needed perspective. It
is illuminating to compare these numbers to the 0.2 percent
potential maximum incremental ozone depletion difference, corre-
sponding to a 0.6 percent increase in damaging ultraviolet
radiation, between a U.S. ban in 1980 versus a ban in 1985
[Du Pont, 1980b] (Details of this calculation appear in
Appendix E) . The 0.6 percent difference may be compared to
existing ultraviolet increments over a north-south movement of 4
miles. However, more importantly, it indicates the existing
environment provides ultraviolet differentials much in excess of
our current concerns. It also suggests that the natural envir-
onment readily could be used for experiments on the effects of
varied amounts of ultraviolet radiation on representative crops.
Such experiments would avoid the need for growth chamber exper-
iments. This is important because there are critical physical
deficiencies in our ability to simulate changes in ultraviolet
radiation using experimental growth chambers. Yet, it is these
growth chambers on which most data are presently based and on
which EPA reaches its conclusions. This is discussed in more
340 percent * 30° * 69 miles/0 latitude = 0.16 per-
cent/mile
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Risk
detail in the following section. (The above points are deve-
loped more fully in the review by Dr. William H. Klein, which
appears in its entirety in Appendix F-2).
4. Crop Effects
With regard to the effect on crops from a 16 percent
depletion of the ozone, EPA states in the ANPR:
"Other significant effects of increased DUV may
include reduced crop yields from many important
agricultural species, including tomatoes, sugar beets
and corn..."
This statement exaggerates the NAS conclusion, which was:
"Key Finding 12 - Crop yields from several kinds
of agricultural plants are likely to be reduced as a
result of a 16 percent to 30 percent ozone depletion.
Present data does not permit a quantitative estimation
of the expected production losses but do show
differences in the ultraviolet sensitivities of
different plants cultivated in the United States.
Since non-agricultural plants show ultraviolet sensi-
tivities in the same range as do agricultural plants,
effects of ozone depletion on wild and cultivated
plants should be similar."
The Key point here is that the NAS limited itself to con-
cluding effects may occur from depletion in the range of 16-30
percent, a depletion range in excess of the calculated ultimate
potential depletion of 16 percent associated with 1977 pro-
duction.
Additionally, the body of the NAS report strongly
emphasizes the paucity of good data and the numerous uncer-
tainties. These factors have been ignored by EPA in its summary
position in the ANPR.
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Specific to the findings of the NAS/CISC report
[NAS, 1979b] , Dr. R. Hilton Biggs (See Appendix F-3 for his
full review) reports that "No studies of plant responses per se^
[in controlled environmental growth chambers] have ever been
used successfully to quantitatively predict crop yield under
field conditions." and "[controlled] environment growth
chamber studies cannot be used to extrapolate to field condi-
4
tions." Yet, almost all the evidence cited in the ANPR for
predicting adverse effects of increased ultraviolet radiation on
crops is based on growth chamber studies.
The discrepancy between growth chamber and field
experimental results may be illustrated by comparing two
findings which appear in the NAS Report:
* From growth chamber studies:
"...soybeans tend to be generally sensitive to
UV-B radiation..." [NAS, 1979b, p. 284]
But from field studies, a contradictory conclusion
is offered:
"Several crop species such as....soybeans...
exhibited no detectable response to UV-B
radiation supplements as large as two to three
times the present solar DUV for summer
conditions at 30°N under field conditions."
[NAS, 1979b, p. 285]
Dr. Biggs' review discusses in some detail the pertinent
physical and biological reasons why growth chambers are
unsuccessful models for quantitative predictions of crop
yield under field conditions.
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The misleading high sensitivity of soybeans grown in
growth chambers has been prominently and prolifically featured
in EPA statements [EPA, 1980a; 1980c; 1980d; 1980e; 1980f;
1980g; Jellinek, 1980a; 1980c; Wellford, 1980] while the
results from field experiments have been ignored. One can
conclude that EPA does not appreciate the relative significance
of the differing results.
5. Marine Effects
EPA's key statements in the ANPR on the effect of a 16
percent ozone depletion on marine life are:
"Other significant effects of increased DUV may
include...; significant larval and juvenile killings
of certain seafood species including anchovies,
mackeral, shrimp and crab; and adverse effects on the
microorganisms constituting the base of the marine
food chain."
This should be contrasted to the full NAS Conclusion which was:
"Key Finding 13 - Larval forms of several
important seafood species, as well as microorganisms
at the base of the marine food chain, would suffer
appreciable killing as a result of a 16 to 30 percent
ozone depletion. Present ignorance of ultraviolet
penetration into the waters that they inhabit and of
the depth distribution of the organisms precludes an
estimate of actual losses." [NAS, 1979b, p. 7]
Again it is pertinent that the NAS limited itself to
concluding effects may occur from depletion in the range of
16-30 percent, a depletion range iji excess of the calculated
ultimate potential depletion of 16 percent cited by EPA.
Additionally, the body of the NAS/CISC Report strongly
emphasizes the paucity of good data and the numerous uncertain-
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ties. These factors have been ignored by EPA in its summary
position in the ANPR.
In many of the experiments cited by the NAS Reports,
and subsequently by EPA in the ANPR, the experimental conditions,
such as ultraviolet radiation dose-rates, temperature and water
depth were not realistic simulations of natural conditions. For
some studies cited, the radiation dosimetry and calculations of
the radiation level are open to substantial question. (These and
other points are discussed in detail in Dr. David M. Damkaer's
review which appears in its entirety in Appendix F-4).
The bottom line to the uncertainties surrounding the
results from these experiments is somewhat analagous to the
situation with regard to crops (discussed in the previous
section)the data represent the necessary first step of ex-
ploratory research, but are not suitable as a final base on
which future quantitative predictions can be made.
6. Climatological Effects
EPA states in the ANPR:
"In addition, continued accumulation of CFCs in
the lower atmosphere (troposphere) may induce a slight
warming of the mean global surface temperature, but
this is less than the warming predicted for a doubling
of atmospheric carbon dioxide caused by fossil fuel
combustion."
The text infers these are part of the NAS
conclusions.
What the NAS does say about potential temperature
change is that:
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i. "...the warming due to...CFMs is expected to
be an order of magnitude smaller than that
expected from the increased CO?." [NAS,
1979b, p. 118]
ii. The [uncertainty] is so large, in fact,
that the net warming due to... [CFMs] has
an uncertainty equal to the expected mean."
[NAS, 1979b, p. 118]
iii. ...a change between successive nonoverlapping
20-year averages of surface temperature at
60°N must exceed 0.4° to be statistically
significant..." [NAS, 1979b, p. 106]
One could equally well state that the potential
temperature change from CFC release is so uncertain that it may
not occur at all. But even if a temperature change from CFC
release were to occur it would be an insignificant increase
relative to that possible from C02-
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D. PROBABILITY AND TIMING OF REDUCING UNCERTAINTIES
1. Introduction
As discussed in section B, Section IV and Appendix E,
the science underlying the CFC/Ozone Issue is developing rapidly.
In the year since the NAS reports, there has been a substantial
increase in knowledge in a number or critical areas, which, in
turn, has served to narrow several of the key remaining uncer-
tainties. The narrowing of uncertainties is a continuous pro-
cess. If research continues as expected, the reduction of
uncertainties likely will extend into the foreseeable future as
the data base increases and understanding of atmospheric pro-
cesses improves. However, one cannot confidently predict
exactly to what extent, over time, this will happen.
Yet the very question often asked is: "When will the
uncertainties be reduced sufficiently to confidently make a
determination as to the validity of the theory?" Consequently,
attempts have been made to assign to the key uncertainties time
estimates for their resolution. We review two of them [Ward,
1979; SRI, 1980] in the following sections. We end with a
discussion on why it does not matter how long it will take to
resolve the uncertainties so long as an early warning system for
any developing problem is available.
2. Du Pont/Fluorocarbon Project Panel Estimates
At the request of EPA, Du Pont prepared, in coopera-
tion with the Chemical Manufacturers Association (CMA) Fluoro-
carbon Project Panel (FPP) a submission reviewing uncertainties
in the ozone depletion theory [Ward, 1979] The submission's
summary included the comment:
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"This submission identifies several important
uncertainties in the ozone depletion theory, explains
the significance of the uncertainties/ reviews the
industry-supported research targeted to the uncertain-
ties, and gives the results expected and anticipated
timing.
The program is consistent with the recommendations
of the National Academy of Sciences and cooperative
with government agency and academic research.
The industry believes that there is time to verify
or disprove the theory experimentally without undue
risk. The issue should be decided on such scientific
measurements and evaluations, not just upon unverified
theory."
The estimates of timing were arrived at in consultation
with the investigators funded by FPP and with the FPP project
coordinators. A copy of the tabulated contents from the
submission appears on the following page.
In reviewing this estimated, timetable however, it is
important to recognize that, although in each case the expected
results are anticipated in 5 years or less, the anticipated time
required to obtain results can change as research progresses.
3. SRI Workshop Conclusions
Subsequently and independently, EPA sponsored a "work-
shop" at SRI International in March, 1980. None of the FPP/CMA
coordinators, and no CFC-producing industries were invited to
attend the workshop. The conclusions of the workshop partici-
pants, as reported in the report on the proceedings [SRI,
1980] seem to have been that:
i) There are many key uncertainties remaining which
are critical to making a correct regulatory
decision,
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Uncertainty
Significance
Research
Estimated Time Required
Are there trope-spheric
sinks?
Is all pertinent
chemistry known
and quantitatively
included?
Are 1-D models adequate?
Ozone Trend Analysis
10 year sink, not currently
excludable, would reduce
ozone depletion 10-fold.
Uncertainties associated
with reaction rates,
photolysis, and reaction
products could together
reduce ozone depletion 13-
fold.
Missing chemistry could
reverse sign of ozone
depletion (ozone augmen-
tation) .
Transport uncertainties
could reduce ozone depletion
by a factor of 0.7.
Latitude and seasonal dis-
tribution for comparison of
measurements and calculations.
Latitude distribution of
calculated depletion reduces
impact.
Atmospheric Lifetime Experiment
Research on silica-catalysed
decomposition and PC-21.
Studies on reaction rates and
temperature dependence.
Absorption cross-section measure-
ments.
Studies on reaction pathways.
Studies on hypothetical missing
chemistry suggested by discre-
pancies between measurements
and calculations.
Anderson's "reel-down" experiment
Methods for, and measurements of,
total stratospheric chlorine.
Not included
2-D modeling studies.
2-D model development and
utili.zation.
Basic test of whether CPCs Statistical Trend Analysis
deplete ozone. (Mote that Establishment of Detection
this is not the same as Threshold
whether ozone is being depleted
from any sourcea detection
ability already in hand.)
3-5 years
1 year for measurements
3 years
3 years
3 years
5 years
2 years
2 years
Not applicable
2-3 years
2-3 years
2 years or more depending
on actual detection
threshold.
<
VD
P.
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ii) These uncertainties generally are "researchable",
and
iii) Most are researchable within 1-5 years, depending
on the uncertainty.
The summary tables on uncertainties from this report
appear as Appendix L. The full report is attached as part of
our submission.
It is noteworthy that of a broad range of 37 issues
classified as "high" or "moderate" in importance and identified
as "researchable", 28 were listed as requiring 5 years or less
and an additional 4 were expected to require 5-10 years. Of the
remaining 5 researchable issues requiring 10 years, and the 6
"unresearchable" issues, none involved CFC releases and none
involved transport or atmospheric chemistry and modeling.
4. Conclusion
The research needs described in the two reports above
are completely compatible with research recommendations made by
the NAS [NAS, 1979a; 1979b] and NASA [NASA, 1979],
although these later reviews did not make specific estimates of
the time required. However, the NASA report did conclude:
"The uncertainties associated with estimating the
long-term impact of several perturbing influences to
the stratospheric ozone layer continue to be large.
However, prospects appear good for improving the
situation in the near future." (Emphasis added.)
[NASA, 1979, p. 362]
The conclusion is clear and inescapable. The uncer-
tainties concerning the effects of CFC on stratospheric ozone,
and the effects of ozone changes should they occur, are so large
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that a reasoned and logical decision-making process for further
CFC regulation cannot presently be mounted.
There has been a tendency on the part of EPA and
others to acknowledge the uncertainties, but, understandably
lacking confidence in their very near-term resolution, to con-
clude that an indefinite wait for the needed resolution will
incur unreasonable risk. Therefore, it is argued that regulation
must occur now. What this analysis neglects, however, is the
existence of an early warning systemozone time-trend analy-
sis. From a regulatory standpoint, it should not matter whether
the underlying scientific uncertainties will be resolved in 1, 5
or even 20 years, so long as it is apparent that an unreasonable
risk to human health or the environment is not developing during
the period. Trend analysis provides such an ability. Under the
umbrella of an early warning system based on actual ozone obser-
vations, the time it will take to resolve the uncertainties
becomes of academic interest. Research to ultimately resolve
all the discrepancies and unanswered questions can proceed with
confidence, no matter how long it might take, so long as no risk
is developing. The trigger for regulation should be "developing
risk", not concern that it may take x years to get the final
answers, and that if these answers are negative it will be too
late to act. These points are discussed in more detail in the
ensuing sections E-G.
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E. RISK IN WAITING-RISK VS. TIME
1. Introduction
In the United States many of the studies [NAS,
1979a; 1979b] have concentrated on calculations of ultimate or
long-term depletion and on attempts to predict the effects of
such long-term depletion should it in fact occur. The reports
note that such effects occur gradually over a period of about a
hundred years. However, exclusive consideration of the long-
term calculations and estimates is largely inappropriate for
decisions as to what action should be taken now. Such long-
range estimates are mainly relevant to a decision as to whether
action on the issue should be postponed for a long period, say
50 years. The relevant decision that is facing us now is
whether regulation of the remaining nonaerosol uses of CFCs in
the United States has to be decided upon and initiated now
(1981). The alternative to immediate regulation is postponement
for limited sequential periods. We are not recommending that
postponement or deferral be for a single pre-set specific
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period. Rather, we believe deferral should be on a sliding
scale, say a year at a time, in conjunction with periodic formal
assessments of whether the theorized risk is developing ("Assess-
ment and Surveillance"). As discussed elsewhere, ozone trend
analysis permits this to be done. The deferral should not be
just to postpone regulation but rather, in order to:
a) continue to work to reduce uncertainties in the
ability to make stratospheric predictions,
b) reduce uncertainties in our ability to estimate
the effects of ozone depletion,
c) insure the list of available regulatory options is
complete, and
A pre-set period of 5 years has been often mentioned.
Several analyses [Ward, 1979; SRI, 1980] of the work
required to reduce the critical uncertainties suggest that
most can be materially reduced during periods varying
between one and 10 years, with a period of about 5 years
being most often stated. Reduction of uncertainties is a
continuous process but the period of 5 years is selected as
one within which major improvements in knowledge and re-
ductions in uncertainties are expected (see previous
section).
More recently, the EEC reviewed the state of the science
[EEC, 1980] and the need for further CFC controls and
concluded:
"...a delay of 5 years before any decision is taken on
CFCs can be reasonably accepted."
The key point underlying all these assessments is not that a
5 years deferral in regulation has some special significance
but rather, given the current state of knowledge, studies in
reducing the uncertainties probably can be made within this
period of time, and the risk in waiting is acceptable.
With the recent improvement in ozone trend analysis, we have
the ability to assess developing risk on a yearly basis and
to rethink the wisdom of continuing the deferral according-
ly. No committment is required that deferral be for any
pre-set period.
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d) complete and quantify the economic impacts of such
regulatory actions.
We stress that the relevant choice should be between
regulating now or waiting for limited sequential periods while
monitoring on an ongoing basis whether any risk is developing.
It should be kept in mind that as our knowledge improves and
more trend analysis of actual ozone concentrations becomes
available, the decision to continue to wait may be altered at
any time. The decision is not, as EPA tries to paint it, a
simple choice of regulating now or having to wait until it is
too late to head off major deleterious efforts should the theory
prove to be correct.
The risk basis for such a decision is not long-term or
ultimate ozone depletion estimates but estimates made for incre-
mental depletion and corresponding estimates of effects for the
postponement period under consideration. Such analyses are
conspicuously absent in the NAS Reports [NAS, 1979a; 1979b],
although not from all the reports EPA has received or spon-
sored. Fortunately, it is relatively simple to make the
calculations, and the anticipated effects can be prorated.
Below we review conclusions reached in a Du Pont sub-
mission [Du Pont, 1980b], a study from the University of
Maryland [Bailey, 1980] and a study by Systems Control, Inc.
[SCI, 1979] which are pertinent to the question of risk from
limited periods of delaydelay taken in order to reduce the
uncertainties.
2. Conclusions from 1980 Du Pont Submission
The Du Pont submission [Du Pont, 1980b] examined
the calculated environmental difference between two extreme
hypothetical regulatory scenarios:
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A ban on all CFC production in the U.S. in 1980.
A ban on all CFC production in the U.S. postponed
until 1985.
The difference in potential ozone depletion between
these two scenarios would reach a maximum of 0.2 percent in the
year 2010 and subsequently decline. The scenarios assume con-
tinued use at 1978 rates by the rest of the world. The 0.2
percent maximum incremental depletion corresponds to a 0.6
percent maximum incremental increase in ultraviolet reduction,
also occurring in 2010 and subsequently declining.
Such incremental changes in ozone and ultraviolet
radiation would be insignificant and undetectable (See
Appendix F). Similar calculations could be repeated for a
five-year postponement in any regulatory scenario. Any
regulatory scenario less severe than a production ban would
necessarily result in even smaller calculated incremental
effects. Although it is recognized that a total ban is not
being considered as a practical regulatory action in 1980 or
1985, the extreme regulatory scenario was chosen to emphasize
that the incremental effects from a 5-year U.S. postponement of
even extreme action were insignificant. Details appear in
Appendix E and [Du Pont, 1980b] (attached).
3 Conclusions ^f_rgm^University of Maryland Study
The University of Maryland Study for EPA by Professor
Martin J. Bailey [Bailey, 1980] is an in-depth evaluation of
the risks vs. the benefits of not regulating. The "centerline"
estimates are found to:
"give the surprising result that the unregulated
release of CFCs [if the theory of ozone depletion
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proves to be valid] would produce benefits ranging
from equal to almost double the costs." [Bailey,
1980, p.ij
An important part of the report is a section on "Immed-
iate Decision versus Deferral", which discusses the value of
reducing the existing uncertainties before making a regulatory
decision. It is also pointed out that, if the U.S. prefers
prompt regulation of CFC emissions, it can only present a mixed
and inconclusive case to other countries (a key point, because
one of EPA's stated objectives for regulating now is to obtain
international cooperation on regulation of CFCs worldwide.)
The report notes:
"Because the growth path of CFC emissions is
exponential, the next 10 years of production and use
will commit the economy to only about 13 to 14% of the
eventual risk of damage from CFCs if the supplies of
Fl [fluoride] ores are exhausted, as expected
within the next 10 years or so. During the next 10
years, scientific knowledge of all aspects of the
problems should improve markedly. Hence, even if
worldwide restriction of CFCs production and use fails
to develop quickly, nearly all the risk can be
avoidedthe risk that the case for restriction may
become conclusion, as a result of new knowledge, after
several years." [Bailey, 1980, Abstract of report]
"All these perspectives on the problem, combined
with the long time periods involved, imply a high
value to improvements in knowledge, which can reduce
the choice of a damaging or needless regulatory
strategy." [Bailey, 1980, p.4]
"Clearly, there is a high payoff to improving our
knowledge and narrowing the uncertainties."
[Bailey, 1980, p. 80]
"...further regulation can safely be deferred
until more knowledge accumulates." [Bailey, 1980,
A-31
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and concludes:
...the need is for a narrowing down of the major
uncertainties within the next 10 to 15 years. The
emphasis should be on well-verified projections and
predictions not on quick [regulatory] responses.
The rush to regulate has outgrown our knowledge in
this area, apparently quite needlessly; there is ample
time to reach reliable findings on whether an
environmental hazard exists in the use of CFCs or
whether instead they are beneficial." [Bailey,
1980, C-3]
We find it noteworthy that the report has been omitted
from EPA's ANPR discussion.
4. Conclusions from Systems Control Inc. Study
The SCI study, [SCI, 1978] prepared for the
National Science Foundation, evaluated internal and external
costs associated with several alternative strategies for
controlling CFC emissions. Among its conclusions was that, in
most of the cases examined, the minimum cost alternative is to
wait until ozone depletion is detected. It should be noted that
at the time of the study (late 1978) the lowest detection
"threshold" considered was 2.5 percent, while in 1980 the
threshold is already down to approximately 1.5 percent or less
(See Section IV and Appendix E).
In the SCI study the cost advantage of the "Wait and
See" approach increases as the detection threshold is lowered.
Consequently this advantage of the Wait and See approach has
increased as a result of improvements in ozone trend analysis.
5. Summary
The conclusion to be reached from the above analyses
is that the most appropriate regulatory policy is a cautious
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approach of "Assessment and Surveillance" for an ongoing series
of limited periods, with suitable scientific review during each
period, so that the wisdom of that policy is frequently
reassessed.
There are two further factors which support limited
postponement of action:
* The economic and other risks of unnecessary or
premature regulation are sufficient to warrant
great regulatory caution. (This is discussed in
greater detail in section I.)
There is an independent techniqueozone trend
analysiswhich, apart from periodic scientific
reviews, permits us to monitor our environment and
which provides an early warning system. Ozone
trend analysis provides a desirable redundancy in
environmental monitoring. (This is discussed in
greater detail in section F, Section IV - Science
and Appendix E).
We believe the factors discussed above are the factors
which should be considered in reaching regulatory decisions on
the need for short-term or immediate actions. They have been a
major part of the reasoned approach adopted by the United
Kingdom and the EEC.
The reasoning followed by EPA (as described in the
ANPR) in reaching its conclusions on regulatory action ignores
these factors, concentrating instead on arguments which are
inappropriate for reaching prudent and unemotional short-term
regulatory decisions. (Section J discusses these arguments and
approaches being used by EPA).
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F. IS THE RISK DEVELOPING AS PREDICTED?
1. Introduction
Statistical analyses of ozone measurement data con-
sistently point to recent increases in both total column ozone
and upper Umkehr layer ozone concentrations. The uncertainties
imply detestability of a long term trend at or below the 1.5
percent level. In contrast, 1979 models calculated current de-
pletion to be 2.1 percent, with approximately 1.5 percent to have
occurred in the seventies from CFC-11 and CFC-12. Other steadily
increasing chlorocarbon emissions (e.g. methyl chloroform) would
increase those numbers by approximately half (2.1^3 percent).
Model calculations using current data revise these figures down-
ward by as much as a factor of two, to as low as 1.5 percent -
still outside the 95 percent confidence limits placed on the
observations.
This conflict between measurement and models is not
unique. Model predictions of other effects based on best
available data for volcanic eruptions, nuclear explosions and
the eleven-year solar cycle are also not reproduced in actual
ozone observations.
Two explanations are possible for these continued
differences between model calculations and ozone observations:
i) In each case, an opposing trend may have masked the calcu-
lated change. ii) Models may be consistently over-estimating
depletion due to inadequacies in chemical treatment or to
unwarranted assumptions. In other words, the theory is not
quantitatively correct. These possible explanations are
examined in more detail in the following sections.
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2. Opposing Trends
Ozone measurements have not verified the several
concentration fluctuations calculated to have occurred from a
variety of perturbations, including the CFC effect, either in
magnitude or in qualitative features. Intuitively, it is
unlikely that opposing but unsuspected trends in each case have
countered the calculated trends just sufficiently to obscure
detection. Nevertheless, such intuition is perhaps insufficient
reason to reject the possibility.
Even if one assumes for the moment that a CFC effect
is occurring but being cancelled by other effects, the simple
reality is that ozone levels themselves are not currently being
reduced below "normal" by CFCs. From the statistical analyses,
one also knows that postulated opposing trends must themselves
be long-term effects and immediate catastrophic reversal is
unlikely. Thus, in this scenario of opposing trends, for the
near term at least (say up to twenty years) , any CFC effect is
mitigated by the unknown opposing effect. Potential depletion
is less, secondary effects are less, the risks are reduced.
One must also consider what else will take place in
the next twenty years. First, one may expect continual refine-
ments in both model calculations and ozone measurements. Both
will improve the regulator's ability to make decisions. Further-
more, the assumption of opposing trends reduces the risk asso-
ciated with delaying a regulatory decision until it can be made
on a sounder basis. Measurements to date show no current threat
and imply a reduction of future threat for a period long enough
to encompass regulatory deferral for further research and even-
tual action (if the evidence justifies it) and all of this at
considerably lower risk than that perceived just one year ago.
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As this discussion points out, perceived risk is not a
static quantity. During any period of regulatory postponement,
ozone measurements would continue to be updated. As the data
set lengthens, the statistical analysis improves in its ability
to separate the CFC trend from unknown intermediate length
trends, and only very long term trends could counteract the CFC
trend without being detected. To the extent the depletion is
still undetected in successive years, confidence in the wisdom
of regulatory postponement increases. Even the time scale for
possible future depletion increases.
A final consequence of continued absence of detectable
depletion is that opposing trends become less likely to mimic
the calculated increasing CFC depletion curve. Eventually the
postulate of opposing trends become highly unlikely, leading to
the second possible explanation for current results: Theoreti-
cal calculations may overestimate any CFC effect.
3. Reliability of the Theory
The discrepancy between ozone measurements and model
calculations may well lie in the theoretical models themselves.
Having discussed the possibility of opposing trends, we now
consider the alternative. The detailed discussion of transport,
chemistry, tropospheric processes and models appearing in
Appendix E define a large number of uncertainties associated
with model calculations. The 1979 calculations by the Lawrence
Livermore Laboratories' model were certainly overestimates
relative to the currently accepted chemical scheme. Other
preliminary developments seem likely to reduce calculated
depletion still further. If one accepts several such develop-
ments as being accurate, calculated depletion through 1978 is
reduced and may then fall within the uncertainty range for trend
analysis of the ozone measurements. Hence, in the absence of
opposing trends, ozone trend analysis provides a gauge for
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confidence in model calculations. With current trend results, a
lower calculated ozone depletion is more likely to be correct
than a high one.
Thus, the regulator obtains a great deal of direct
information from ozone measurements. First, ozone is not
currently decreasing as earlier model calculations would imply.
Therefore, the immediate concern for stopping a trend which may
be already underway is alleviated. Second, large (even 16 per-
cent) calculated steady state depletion implies rather larger
(approximately 2 percent) present day calculated depletion
which is simply not consistent with the current data. The wis-
dom of continuing to rely on 1979 model calculations in spite of
this evidence is suspect. To the extent that the calculated
steady state depletion is smaller, the calculated annual change
in ozone is also smaller. Therefore, ozone measurements tell us
that the need for precipitous immediate action is also removed.
To put it simply, the smaller the potential effect, the more
time available to study it before making regulatory decisions.
A logical conclusion to this analysis is that both
current uncertainties and recent analyses of ozone measurements
support a deferral of regulatory action in favor of further
research. The question then becomes: "How long a deferral is
reasonable?" To answer that, one must consider the early warning
capabilities of ozone measurements and how those capabilities
improve with time.
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G. AVAILABILITY AND SIGNIFICANCE OF AN EARLY WARNING SYSTEM
The feasibility of an early warning system based on
ozone measurements depends not on the ability of the system to
confirm the theory, but rather on the ability of the system to
detect change in ozone. The ozone measurement analyses dis-
cussed here imply that a net long-term change of approximately
1.5 percent is detectable with confidence, regardless of its
cause. Calculations suggest that immediate cessation of pro-
duction at that time would allow overshoot to half-again that
value, i.e. approximately 2.3 percent. The practicalities of
the regulatory process would entail some further delay, so a
more conservative estimate of overshoot might imply an eventual
depletion of 3 percent if the regulatory process were begun when
ozone measurements indicate a decrease in ozone of 1.5 percent
below "normal".
However, this analysis of overshoot is essentially a
worst case. It assumes a case calculated using 1979 model
imputs. To the extent these model calculations are over-
estimates of current depletion, (as seems to be the case based
on new information) they are also overestimates of the rate of
depletion and hence of the overshoot level. Each additional
year of measurements which show no trend reduces both overshoot
and potential steady state depletion still further. That is,
the perceived problem gets smaller, and response becomes easier
and more effective.
A deferral is justified by the current data - ozone
has not decreased as model calculations indicate it should
Ozone levels fluctuate above and below some average value.
Ozone depletion is a decrease in the average of the latest
values compared to the long-term average of older ozone
concentrations, i.e., the "normal" concentrations.
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have. Each additional year of measurements with no downward
trend provides even stronger support for further deferral since
a decreased potential effect can be more easily dealt with by
the regulator.
Additionally, a deferral in regulation will permit
research to continue, and any subsequent decision to be reached
on a more firm basis. A number of critical projects in progress
(discussed in Appendix K) will be completed in the near future.
Confidence in model calculations is likely to be increased as
laboratory work and atmospheric measurements continue to refine
the current picture of the stratosphere. Uncertainties will
likely be reduced, and a proper decision will be facilitated.
Finally, the early warning system itself is expected
to improve with time for several reasons. A longer data base
reduces the statistical uncertainty associated with detection of
a long-term trend. The shape of the calculated CFC trend itself
is better contrasted with other long-term trends as more years
are included. The ability of a data set to separate a
relatively long periodic trend from a very long term monotonic
trend in- creases with the length of the data set, and the
possibility of masking by opposing trends is reduced. Thus, the
capabilities of the early warning system will increase with
timebetter sensitivity and a more accurate search for a
particular kind of trend.
Careful attention to a well organized early warning
system based on ozone measurements will indicate, with better
precision each year, the actual changes taking place in ozone.
Current precision is sufficient to permit speedy observation of
change well in advance of large depletion. To the extent that
ozone change is not detected, maximum likely CFC induced ozone
depletion has increasingly smaller upper limits placed upon it.
Regulatory deferral contingent on periodic reevaluation has the
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significant advantage of allowing for a better decision if and
when it must be made. In the face of an uncertain theory and
conflicting measurement of both 1) the quantity of interest -
ozone concentrations - and 2) the crucial link in the theoretical
reaction chain - chlorine oxide concentrations (See Section IV
.and Appendix E) - any present day decision to regulate would be
made without adequate scientific justification.
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H. THE RELATIONSHIP OF THE INTERNATIONAL ASPECTS OF THE ISSUE
TO RISK
CFCs and the potential depletion of the ozone is truly
an international issue. This is so for these reasons:
CFCs are produced and used worldwide, with the
largest producer nation (U.S.) accounting for only
approximately one-third of the total.
If CFCs prove to deplete ozone, CFC emissions from
all uses, in all countries, will contribute
equally, i.e. a pound of emissions from a
developing country will be just as bad as a pound
from the U.S.
A country cannot unilaterally protect its own
overhead ozone. If ozone is depleted, it is
depleted world-wide, regardless of whether a given
country emits CFCs or not.
Therefore, the problem, if it exists, can be solved
only through a global effort. To this end, the question of risk
must be addressed and managed internationally. Unilateral
efforts will have little impact on the overall problem if it
exists.
The issue of risk as it applies to individual coun-
tries' populations and to the world community, and as it applies
to assessments and actions by individual countries, is an
exceedingly complex one. Even the decision by an individual
country that a chemical of known benefit, but uncertain risk to
the population of that country, should be controlled is a
complex one. In the instance of CFCs, it is ambiguous whether
such a unilateral decision would have any benefit in reducing
the perceived risk, regardless of the degree of any eventual
certainty that the use of the chemical poses a risk to a
country's population.
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Because of this complexity, discussions of risk and
the international situation branch off into the science (how it
is differently viewed around the world), international politics,
and how an international solution to the problem can be forged.
Individual facets of the problem, like risk management, cannot
be discussed in isolation from related topics. Therefore, these
and other parts of the international aspect to the CFC/Ozone
Issue will be discussed together in Section VI.
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I. RISKS CREATED BY REGULATION AND THE NEED FOR RISK - RISK
COMPARISON
If the currently at issue uses of CFCs were "frivo-
lous", that is, of no consequential redeeming value to society,
or if there were readily available alternative products or pro-
cesses, which at little cost to anyone could be used in place of
CFCs and provide the same end products, with the same degree of
safety, etc....then the need for addressing the trade-offs from
regulation may not be critical. Under this circumstance the
only major question before the policy-maker would be: "Is there
an unreasonable risk from the continuing use of CFCs?"
However, this is not the case with CFCs. CFCs are
highly essential compounds to a vast variety of products and
processes considered to be highly beneficial, and in some cases
essential, to today's way of life. CFCs fill needs for society,
else they would not be in demand. An analysis of the needs
filled (See Section II) indicates that the needs are suffi-
ciently basic that they must be filled regardless of the avail-
ability of CFCs. Thus, restraint on CFC supply will result in
pressures to meet the underlying needs in some manner. The
chief manner will be the use of the best available alternative
product or processes.
But as also discussed in Section II, the use of the
currently available alternative products which would be employed
(if only because there were no other choices) would result in an
increase in risk to workers and in some cases, consumers, over
the situation now with CFCs. Also, to the extent that more
energy is required due to unavailability of CFCs (See Section
II-K and Appendix C) , there would be an increase in health and
environmental risks associated with energy production and use.
And last, as CFC regulation would create unemployment in the
industries supplying precursors for CFC manufacturing, CFC
manufacturing itself, and the numerous manufacturing, trans-
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portational and service industries associated with CFC use and
products dependent upon CFCs, there is a need to address the
social and welfare risks induced by unemployment. A few examples
of the above risks are discussed below.
Specific human health and welfare risks would be
associated with a regulated reduction in the availability of
CFCs due to the unique combination of physical properties CFCs
provide. The most important is the combination of nonflamm-
ability and low toxicity.
Consider flammability. If problems of equipment re-
design and conversion are ignored, hydrocarbons can be substi-
tuted for CFCs in some uses, for instance pentane can be used as
a blowing agent in the manufacture of certain polystyrene foams,
and propane technically can be used as a refrigerant. Should
such substitutions occur however, new fianunability and explosion
hazards are created: 1) in the transportation of the hydrocarbon
by rail or roadway, and at the storage point in the manufactur-
ing plant site, 2) in the use of the hydrocarbon substitute in
the manufacturing plant (This is particularly true if the pro-
cess involves the release of the hydrocarbon in the plantas is
the case with pentane/polystyrene foam production), and 3) if
the substitute hydrocarbon is not released as a part of the
manufacturing process, as would be the case with a propane
refrigerant, new flammability and explosion hazards are created
in the transportation and warehousing of the finished product,
at the point of consumer sale, and during the life of the
product in the consumer's hands.
7This last hazard is perhaps the most significant since main-
tenance of adequate safety standards for flammable materials in
consumers' hands is notoriously difficult. So serious is such a
potential hazard in the case of refrigerants, as an example,
that propane is banned [ANSI, 1971] along with other hydro-
carbon refrigerants from use in institutional, public assembly,
residential and commercial occupancy applications. Ammonia is
under similar restriction.
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A parallel set of additional hazards is created when
the substitute material is substantially more toxic than the CFC
presently used. As examples, methylene chloride may be used as
a alternative blowing agent for certain types of polyurethane
foams, and ammonia or methyl chloride technically may be used as
refrigerants. But toxicity hazards are created in the workplace
if the substitute is emitted (as is the case with flexible
polyurethane foams), or hazards are created for the consumer if
the substitute, meant to be retained in the product, should
escape (e.g. from a refrigerator or air-conditioner).
Other problems can develop from the use of alternative
solvents. Again flammability and toxicity problems may be
created in the workplace where the alternative solvent is used.
More insidious effects involve the potential for contamination
of products with more toxic and less inert solvents. Sucn
contamination could lead to direct toxic effects (for instance
in the cleaning of medical equipment), or to hazards from
failure or improper operation of containment equipment.
There inevitably would be unforeseen risks. As a
CFC-using practice is discontinued, novel and relatively untested
technology is forced in with its own risks. Such novel
technology may or may not be called for in the regulation, and
any risks which may develop from the use of new products or
processes may not be foreseeable, but the fact remains that if
these risks develop, they are a cost of regulation.
If CFCs are severely restricted, unemployment will
result. Even if such unemployment is only temporary, amounting
to dislocation of individuals from CFC industries to industries
geared to replace CFC uses, there will be social and welfare
costs associated. These costs are not just loss of income, loss
of tax revenue or increased cost of social services. A recent
study [Brenner, 1976] found that a one percent unemployment
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(about a million jobs) over a 6-year period is statistically
related to:
36887 total deaths, including
20240 deaths from cardiovascular disease,
920 suicides,
648 homicides, and
495 deaths from cirrhosis of the liver.
Additionally, the study found the social impact
includes:
4427 first admissions to state mental
hospitals, and
3340 admissions to state prisons.
CFC dependent employment amounts to roughly 780,000 (See Section
VII - Economic Considerations). Obviously, all of these jobs
p
would not be lost due to a cap on CFC production. But as
losses would be expected, especially in the small business
sectors (See Section VII), the above statistics should be kept
in mind.
Therefore, in conclusion, we believe it is necessary
in any consideration of regulation of CFCs to carefully assess
the consequences of reduced CFC availability in terms of the
risks which such reduction might generate. This is true even if
CFCs are found unequivocally to deplete ozone. And after the
risks from reduced availability of CFCs have been determined,
Q
°Industry has not been able to estimate even approximately how
many jobs might be lost were EPA's proposals to be enacted
because EPA has not provided sufficient detail on its proposals
(suchaicaplevel, lead-time,implementation,etc.)toenable
any meaningful quantitative analyses. (See Section VII and
Appendix I).
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they must be weighed against the risks from continued CFC use.
Only a decision which minimizes total risk is in the best
interest of society.
There already has been some effort to address some of
these risks and to balance them against the potential risks of
CFCs [Du Pont, 1978; NAS, 1979d; Rand, 1980], And in EPA's
Development Plan for CFC regulation [EPA, 1980e] it is
stated:
"Regulatory actions related to CFCs will cause
increased use of substitutes which may have different
but still undesirable effects of their own. To what
extend do we attempt to do risk/risk tradeoffs?"
So we conclude that EPA acknowledges this problem and
tne need to do something about it.
It is strange, therefore that the ANPR contains
neither discussion of these risks nor recognition of the need to
take them into consideration, nor does the ANPR solicit comment
on them. The only mention is a passing reference in a dis-
cussion of criteria for banning a CFC useno mention is made
opposite the Agency's preferred option of a cap as an economic
incentive option.
We find a rule-making decision on CFCs which focuses
solely on the potential long-term risks from continued CFC use,
ignoring known risks (e.g. flammability and toxicity of alter-
natives) which would be incurred from a restricted availability
of CFCs, to be imbalanced, short-sighted and certainly not in
the overall best interests of the public.
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J. APPROACHES WHICH ARE INAPPROPRIATE FOR ASSESSMENT OF RISK
ON THE CHLOROFLUOROCARBON/OZONE ISSUE
A growing world population, using advancing techno-
logy, in a finite environment of which we have limited under-
standing, will generate pressures and problems of extraordinary
complexity. There are numerous examplesthree involving the
atmosphere are the increasing concentration of carbon dioxide,
acid rain, and the concern over possible depletion of ozone by
CFCs. It is immediately obvious that the concern can be removed
by banning or severely limiting the products in question, and
the environmental risk will be removed.
However, it is inappropriate to stop the analysis at
that point, for now other risks emerge from this corrective
action. It may be claimed, of course, that blame for the new
risks lies with the entrepreneur attempting to fill the need
created by the regulation. Whether or not this assignment of
fault is legally sound does not eliminate the new risk. Place-
ment of fault is not the point. The "fall-out" from any new
risks is inevitably society's cost or society's risk.
Arguments can be generated that, for one reason or
another, seek to expedite regulatory decisions on environmental
matters by suggesting society cannot afford the time to analyze
risk thoroughly. In fact, society cannot afford not to make the
analysis thorough. In the absence of thorough analysis, inappro-
priate decisions will be made, forcing regulatory costs higher
and net environmental benefits lower.
In the ANPR and in previous Agency statements and
documents, we have identified a number of approaches to the
question of risk which we believe are not conducive to the
obtaining of a proper risk determination for the CFC/Ozone Issue:
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1. A preoccupation with extreme future extrapolation.
2. A conviction that immediate decisions are
necessarily required, and are necessarily better
than deferred decisions.
3. An excessive emphasis on political action over
objective scientific decision-making.
These factors are separately considered below:
1. Preoccupation with Extreme Future Extrapolation
Unfortunately, the publication of, and incessant
reference to, extreme risk scenarios seems to have been the
rule, and not the exception, in the CFC/Ozone Issue [EPA,
1980d; .i.y80e; Jellxnek, I980a; iy80c].
These scenarios generally are predicated on two
unrealistic assumptions:
a) That world production and use of CFCs will
continue to increase over the next several decades (EPA
varyingly has used 7 percent and 9 percent as estimates of
annual CFC growth for the next several decades) . Of
interest to us is that the NAS calculated potential ozone
depletion for four release scenarios (ATD) provided by EPA
{NAS, 1979aj . Yet, the scenario most often cited by
i£PA is case D, which assumed a 7 percent per annum growth
in CFC emissions from 1980 to 2000--the only scenario
which assumed uninterrupted growth. Two points bear
making. First, such a scenario assumes there will be no
further regulation anywhere in the world. In fact,
ongoing regulatory impacts such as the EEC 30 percent
CFC-11 and 12 propellant reduction are ignored by this
scenario. Second, and even more telling, these scenarios
fly in the face of what actually has been transpiring with
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total world CFC productioninformation which was provided
to EPA well before publication of the ANPR [Hasten,
1980; Block, 1980]. As developed more fully in
Apprendix J, the rate of production worldwide for CFCs has
been essentially constant or slightly downward since
1975. This is the trendline on which current need for
regulatory action should be based, recognizing that a
substantial change in that trendline would be
justification for reassessing the need for action. The
trendline since 1975 corresponds to NAS Case A (constant)
or possibly Case B (some reduction) but not Case D (7
percent per annum growth which EPA cites). Case D can be
considered as an intellectual exercise, but its use to
describe likelihood is grossly misleading.
Further, as has been pointed out elsewhere
[Du Pont, 1980a; Hasten, 1980; CMA, 1980a], Case D
implies a quadrupling of production capacity by 2000,
representing numerous business commitments which will not
be made given the present environmental and regulatory
uncertainties, even if increasingly scarce capital for
9
such an undertaking were available. Even if EPA were
to totally discount information on use and growth provided
by industry, it should consider the findings of its own
contractors:
9In 1979, the world production of CFC-11 and CFC-12 was
approximately 1600 million pounds. Assuming, very approximately,
that production was 75% of manufacturing capacity, capacity is
estimated at roughly 2150 million pounds. Case D assumes a 7%
growth in production per annum which equates to a need for a
capacity by the year 2000 of around 8700 million pounds, a 6750
million pound increase. Using a conservative figure of $0.85
capital for each additional annual production pound of new
capacity, investment to meet case D growth would total very
approximately $5.7 billion not a very likely scenario given
the environmental and regulatory uncertainties.
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In an EPA sponsored workshop it was recognized
that estimates of CFC release "even beyond 10
years are problematic" [SRI, 1980, p. 29],
because technical obsolescence and technical
innovation are highly important and unquantifiable
uncertainties.
And Rand stated:
"We emphasize that the estimated growth rates
to 1990 cannot be projected to continue beyond
that year. The CFC applications most respon-
sible for the current high growth rates are in
a phase of increasing market penetration, as a
result of either increased use of final pro-
ducts or increased use of CFCs in manufactur-
ing those products. By 1990, penetration
should be complete in most existing markets,
so the CFC use growth rate should slow to
approximately that of the GNP, unless signifi-
cant new uses of CFCs are developed in the
next decade. Moreover, easily extracted
fluorine is expected to become scarce toward
the end of this century, which will increase
the prices of CFCs and provide incentives to
develop new technologies that are less
CFC-oriented." [Rand, 1980, p. 6]
b) The second suspect assumption made for the extreme
risk scenarios is that there will be no ability to improve
the available scientific information over time and react
accordingly. Obviously, our understanding of the quanti-
tative validity of the ozone depletion theory will improve
as the research programs already underway produce results.
Ideally, should the validity of the theory strengthen, so
should further regulations, and vice versa.
A related point is that virtually all reports on this
subject [e.g. NAS, 1979a; 1979b] have focused almost
exclusively on calculated long-term depletion. While the NAS
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calculated some interim depletion values in the PSCT report, no
attempt was made in the NAS/CISC Report, or to our knowledge
since by EPA, to consider the significance of the small calcu-
lated ozone depletion which would be associated with a limited
postponement of regulation while uncertainties are reduced. We
are presented with an "all or nothing", approach a choice in
no way supported by the scientific or political realities.
In conclusion, major increases in capacity (as would
be necessitated to meet such growth forecasts) will not occur,
given current environmental and regulatory concerns, prior to a
drastic reduction or invalidation of current computer calcula-
tions of future ozone depletion. Equally unrealistic is the
presumed regulatory inability to respond adequately in future
years in response to evidence of any developing problem. The
possibility of this combination of assumptions is economically,
scientifically and politically inconceivable.
Preoccupation with extreme future extrapolation or
future disaster scenarios distracts attention from the reality
of the slow theorized development of this potential environ-
mental problem, and the redundant opportunities which exist for
frequent objective reassessments, and for measured reaction over
a substantial time period.
2. Conviction that Immediate Decisions Are Necessarily
Required, and Are Necessarily Better than Deferred
Decisions
As a leading country in technology and quality of life,
it is inevitable that the United States will be among the first
to encounter, recognize, and be forced to deal with major envi-
ronmental concerns. However, such early recognition generally
should not be translated into early calls of "crisis". In the
case of CFCs and the ozone, a "crisis" approach is an over-
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reaction to a theoretical problem which throws into question our
understanding of our environmnt. It is recoil rather than
informed problem-solving and decision-making, and is a p_arti-
cularly inappropriate reaction in the case of the CFC/Ozone
concern since hasty decisions are not only unwarranted but
unnecessary.
We believe a crisis approach to analysis of the
CFC/Ozone Issue can be seen in EPA's statements. For example,
in dismissing the "Wait-and-See Strategy", EPA considers a
single scenario, a hands-off policy for 10 years which would
allow an increase in emissions by 1990 "commensurate with an
eventual equilibrium depletion of 32 percent". This scenario
has assumed the unrealistic global 7 percent growth of the NAS
Case D scenario. EPA further states, without justification,
that: "little research and development on alternatives to CFCs
would occur [during a postponement]...." [EPA, I980d,
p. 4]
There is no reason to select an entire decade as the
time for postponement. There is no reason to assume, given the
ongoing scientific research into the theory and recently devel-
oped ability to monitor the ozone layer, that were it to be
determined that ozone depletion is occurring at a rate which
would be harmful, nothing could be done about it until 10 years
had expired. Equally, there is no evidence to support a pre-
diction that a postponement automatically would result in a 7
percent annual growth during the postponement. And there is no
evidence to support a conclusion that the current major research
and development on alternatives would be eliminated as a result
of any postponement.
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3. Excessive Emphasis on^ Political Action Over Objective
Scientific Decision - Making
Due to the subject matter, it is inevitable that the
political process will be heavily utilized in major environmental
issues. However, relying on political process to advance a view
in place of performing necessary research and assessment is a
short-sighted and eventually counter-productive shortcut,
eliciting like response from those with dissenting views,
regardless of their interest in having the issue be decided on
the scientific merits.
The EPA Decision Memorandum repeatedly evaluates
regulatory strategies in terms of the international political
impact. For instance, the "Wait-and-See Strategy" is dismissed
by the comment "Finally, the rest of the world may be convinced
that U.S. does not regard ozone depletion as a serious concern"
[EPA, 1980d, p. 4].
A more balanced approach would recognize that:
* International conviction will stem from scientific
knowledge developed through research, in the
leadership of which the U.S. can effectively
demonstrate its concern and commitment.
The objective of regulation to protect strato-
spheric ozone should be to protect stratospheric
ozone by optimized regulatory strategies which
balance risks and benefits, and risks and risks.
The objective of the regulation should not be
merely to place a U.S. regulatory agency in the
"forefront of international attempts to reduce CFC
emissions" [EPA, 1980d, p. 4], or to signal
other nations that "the U.S. is seriously
committed to reducing CFC emissions". [EPA,
1980d, p. 4].
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K. SUMMARY AND CONCLUSIONS
The current unconfirmed concerns over calculated
potential future depletion of stratospheric ozone require the
management of a complex set of conflicting data and uncertain-
ties, and risk and benefit assessments. Yet EPA officials have
claimed that the management choice may be reduced to an "either-
or" propositioneither the theory eventually will be proved to
be incorrect and no harm will have occurred from regulation, or
the theory eventually will be proved to be correct and at that
time it will be too late to head off serious harm if regulation
had not been previously enacted. We disagree with both sides of
this proposition.
An assessment that unneeded regulation will cause no
harm can only be made by focusing exclusively on the potential
risk of not regulating, and ignoring the environmental and
economic harm potentially caused by regulating. The idea that
no harm will have been done by premature or unnecessary regula-
tion does not have support among scientists, economists, indus-
try or the consumer (See Section VII).
The other side of EPA's "either-or" proposition (that
regulation must occur now or we will have to wait to act until
it is too late) simply is not consistent with the up-to-date
facts available on the CFC/Ozone Issue.
We believe that proper risk management of the CFC/
Ozone issue lies in the middle ground deferral of a final
regulatory decision while attempting to improve the information
base through an extensive international research effort,
supported by industry and government, and continuous close
monitoring of the situation for evidence of any developing
risk. Such a strategy of "Assessment and Surveillance" is
supportable because:
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1) The uncertainties surrounding essentially all
aspects of this issue (the science, the effects of
depletion, the regulatory cost and the risk of
regulation) remain so great as to almost guarantee
that any "either-or" regulatory decision will
prove to be wrong.
2) Currently available information indicates that not
only is the risk not as great as predicted a year
ago, but also there is no evidence it is
developing as predicted, and
3) We now have the ability to monitor the situation
opposite any developing risk (ozone trend
analysis), and rethink the wisdom of a deferral
strategy as may be suggested by the results of
this monitoring.
This period of deferral certainly should not be just
to postpone regulation, but rather a period in which efforts are
made to perform work in a number of inadequately studied
critical areas which bear on the question of risk to the ozone
from CFCs. Study areas should include:
1) Increasing the number of actual measurements of
ozone and improving the sensitivity of the. ozone
monitoring system.
2) Reducing the uncertainties surrounding atmospheric
science and modeling, especially in areas in which
there exists conflict between measurements and
model calculations. (In risk management, distinc-
tion is necessary between apparent precision and
reality. The apparent precision of calculations
of future potential ozone changes must not hide
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the fact that real confirmation of these
predictions is lacking.)
3) Reducing the uncertainties associated with the
potential effects of a depletion of stratospheric
ozone.
4) Working toward an international concensus on the
science and the risk, and a coordinated program on
how to manage the risk. (The question of risk to
the ozone from CFCs is a global problem. A single
nation or unilateral approach to risk management
will both be ineffective and create major
inequities [See Section VI]. Accordingly, we
believe there is a preeminent need to develop an
international scientific and regulatory con-
sensus.) International cooperation is needed to
reduce uncertainties and to perform calm and
objective analyses of the consequences of various
courses of action with regard to risk-benefit and
risk-risk weighing.
5) Properly focusing the question of ozone depletion
risk. The overall protection of stratospheric
ozone should be the objective, not just preventing
possible effects from CFCs. Evaluation should
consider the predicted effects from natural
causes, e.g., volcanoes, and from the anthropo-
genic chlorine containing compounds, e.g., methyl
chloroform, and most importantly, the predicted
augmentation of ozone by carbon dioxide.
6) Studying the risks which would be incurred by
regulation of CFCs, and balancing these against
the potential risks which regulation would be de-
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signed to reduce. We believe that proper management
of risk requires evaluation and consideration of all
subjects which bear on risk. Failure to take into
account all critical components to the risk equation
will result in a risk assessment which will not
provide an accurate view of the situation. Regulation
based on an incomplete or inaccurate risk assessment
may be bad regulation for everyone and subject to
legal challenge.
In conclusion:
Postponement of CFC regulation could marginally
increase the risk to future generations should the theory prove
to be quantitatively valid. However, in the time frame expected
to be required for resolution of the uncertainties, it is
difficult to comprehend how such an increase could be
significant opposite the major advantages of postponement:
1) Reduced risk of unnecessary regulation.
2) More time to identify and test safe technological
alternatives.
3) More time for analysis and selection of the best
regulatory plan.
The need to reduce the uncertainties is great, and
there is near consensus among groups as diverse as industry
consultants (See Appendix F), the European Economic Community
[EEC, 1980], other countries' environmental agencies [UK
DOE, 1979], EPA contractors [SRI, 1980] and EPA consul-
tants [Bailey, 1980], that there is time to reduce the
uncertainties without incurring unreasonable risk and that such
effort overall will be cost-effective.
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The conclusions in this regard from a workshop
sponsored by EPA in March, 1980 [SRI, 1980] to evaluate
"...the critical issues that are hindering EPA's ability to make
a fully supportable decision on future CFC regulations" are
especially noteworthy:
"...the degree of uncertainty in the balance
between costs and benefits of control is so great
that the making of control decisions is seriously
complicated; the decision to control cannot always
be unambiguously proven correct. Consequently,
further research to settle major issues by
reducing uncertainties was seen as highly
important and cost-effective." [SRI, 1980,
p. 9]
* "The author [of the workshop proceedings
report] concludes that critical uncertainties in
the issues seriously complicates some control
decisions even when they are justified on the
basis of the best available information, and
therefore, that further research is needed and
cost-effective." [SRI, 1980 p. iii]
"All [Workshop participants] agreed, however,
that further research would be cost-effective in
making a better decision." [SRI, 1980, p. 52]
These conclusions are all the more interesting in that:
* The workshop and report took place in 1980, after
the release of the NAS reports.
* The workshop was limited to participants invited by
EPA. Participants included EPA contractors, con-
sultants and EPA personnel. Industry was excluded.
No mention of the workshop findings appear in EPA's
ANPR discussion of its regulatory proposals.
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International Aspects
VI. INTERNATIONAL ASPECTS
A. INTRODUCTION
B. DIFFERENCES IN NATIONAL APPROACHES TO THE ISSUE
C. ILLOGIC AND LIMITATIONS OF U.S. UNILATERAL
RESPONSE 7
D. CONSEQUENCES OF U.S. UNILATERAL RESPONSE 13
E. NEED FOR A TRUE GLOBAL ASSESSMENT, CONSENSUS
AND RESOLUTION OF ISSUE 17
F. THE LEADERSHIP ROLE - SUGGESTIONS ON HOW TO
PROCEED 20
G. INTERNATIONAL TRADE IMPLICATIONS OF PROPOSED
CONTROL 23
H. SUMMARY 34
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A. INTRODUCTION
Since the inception of the Chlorofluorocarbon/Ozone
Depletion Theory, it has been clear that the problem if it
exists, is global because:
CFCs are produced and used worldwide, and
It ultimately makes little difference where CFCs
are used and emitted geographically because they
mix in the atmosphere such that any potential de-
pletion of the ozone layer impacts all countries
to varying degrees.
And, therefore, solutions to the potential problem
must be global because:
No country can specifically protect its ozone
layer even if all CFC use within its boundaries is
terminated, and
No country can have much direct impact on the over
all potential problem of ozone depletion through
unilateral regulation.
EPA and its contractors have acknowledged these real-
ities as evidenced by the following quotations:
"...no single nation accounts for a large enough
portion of world use or production to be able
unilaterally to control ozone depletion." (ANPR)
"Even the most stringent restrictions on U.S.
emissions can have only a modest payoff in ozone
protection in the absence of regulatory action by
other countries that contribute to worldwide
emissions." [Rand, 1980, p. 251].
Yet, strangely, the actions EPA proposes in the ANPR are not in
step with the current global perspective on this issue, nor do
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the proposals work toward insuring the needed global agreement
on the issue.
In the ensuing sections, we first discuss the differ-
ences in logic and approach to this global issue being taken by
the governments of the world. This is followed by an analysis
of the illogic and limitations of EPA's unilateral program and
proposals, and the consequences we foresee. We then underscore
the need for a global assessment and resolution of the science
as a necessary first step towards an effective global solution
to the issue, and suggest how EPA, by changing its approach, can
take a leadership role in obtaining this solution. Last, we
examine the international trade implications of the control
proposals advanced in the ANPR.
However, before moving to these topics a further per-
spective should be reiterated. EPA has addressed its analysis
and proposals on the premises of a) the validity of the 1979
NAS ozone depletion estimate of 16.5 percent (based on 1977 CFC
release rates), and b) world use growing at 9 percent/year.
Both of these are faulty. As discussed at length in Section IV
(Science), V (Risk) and Appendix F, the incorporation of current
information into the models reduces calculated depletion by ap-
proximately half or more from the 1979 number, and analysis of
actual ozone measurements indicate the problem is not developing
as predicted. Secondly, as discussed in Appendix J, EPA's fore-
casted CFC growth is not consistent with the declining world
production figures for 1974-1979 and the reality of the dampen-
ing effect on growth from ongoing regulatory uncertainty. ^ri
short, the potential problem is neither as severe as EPA claims
it to be, nor could it conceivably worsen to the extent EPA
claims it would. These realities eliminate the need to act now,
whether unilaterally or internationally. As we will see, the
actions of other countries are more consistent with these real-
ities than is EPA's program.
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B. DIFFERENCES IN NATIONAL APPROACHES TO ISSUE
National responses to the CFC/Ozone Depletion Issue
generally can be categorized in one of two ways. One response
has been to focus on worst case scenarios, minimize the uncer-
tainties and immediately place the problem into the regulatory
and political machinery. This approach has been embraced by EPA
and has led the Agency to issue the ANPR to achieve the Agency's
goal of "stimulating international cooperation in this [control
of CFCs] area." [EPA, 1980h, p. 1].
The second response, being followed by the United
Kingdom, the Commission of the European Economic Communities
(EEC) , Japan and others has been to review the developing
science periodicallya process of monitoring the level of cer-
tainty and degree of risk from the concernand then decide
when, and to what extent, to involve political and regulatory
machinery.
The U.S. approach resulted in essentially a total ban of
CFC aerosol propellants in 1978. The European approach has
resulted in an agreement to implement a voluntary 3^ percent cut
back in CFC-11 and CFC-12 aerosol propellant use from 1976
levels, by the end of 1981, while continuing to monitor the
science and periodically review the need for further regulation.
The U.S. approach has been to call for a total cap on
U.S. production of all CFCs for all the remaining CFC uses, re-
gardless of essentiality, partly in an attempt to pressure by
example other countries into taking further regulatory action.
Almost all comparisons are made between EPA and the EEC
countries because by EPA's ANPR calculations (ANPR table 2)
and ours, the U.S. & EEC account for between 75 and 80 per-
cent of world CFC production and use.
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The European approach has been to put a cap on CFC-11 and CFC-12
plant capacity and to continue to study the science in conjunc-
tion with periodic reviews of the need for further regulation.
No nonaerosol rules have been proposed so far anywhere except in
the United States.
The U.S. approach may be summarized by the following
quotations from EPA documents:
"Worldwide regulation of CFC emissions is needed."
(emphasis added) [EPA, 1980e, p. 2]
Yet, elsewhere, EPA states:
"The [recommended] decision [is] to initiate addi-
tional [U.S.] regulation of CFCs without
experimental proof of the ozone-depletion theory
" (emphasis added) [EPA, 1980h, p. 2]
"The decision of the Agency [is] to initiate
further regulation to address the as_ yet unproven
risk p_f ozone depletion despite the apparent lack
of such a determination abroad " (emphasis
added) [EPA, 1980h, p. 2]
In contrast, the European approach may be summarized
by the following quotations:
"...strict regulation is not warranted." [UK
DOE, 1979]
"...a delay of 5 years before any decision is
taken on CFCs can be reasonably accepted."
[EEC, 1980]
Given these two simultaneous reactions to the same set
of data and scientific uncertainties, two consequences emerge:
1) Countries, including the U.S., which adopt the
"U.S. response" place themselves at an economic
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and international trade disadvantage opposite
those adopting the "scientific" response.
2) Countries adopting the "scientific" response have
implicitly rejected the "U.S. response" approach
and consequently are likely to be swayed only by
scientific developments, improved modeling, actual
measurements, etc. They are unlikely to be swayed
by entreaties to embrace the "U.S. response", or
by publicity surrounding regulatory plans under
which the EPA might further emphasize its commit-
ment to the "U.S. response".
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C. ILLOGIC AND LIMITATIONS OF U.S. UNILATERAL RESPONSE
In the CFC Development Plan EPA states:
"The present regulatory initiative to limit [U.S.]
production so that the potential for ozone depletion
is limited to present levels, is part of the effort to
stimulate coordinated worldwide action." [EPA, 1980e,
p. 1]
We interpret this to mean that the Agency believes its proposed
U.S. production cap will have an impact on eventual ozone deple-
tion (if it occurs) and succeed in getting other countries to
regulate CFCs beyond their current plans. We believe that both
conclusions are wrong and, further, that the proposal would
create a significant imbalance in regulatory costs vs. potential
benefits to the United States.
1) Proposed U.S. Cap on Production Will Have Inconsequen-
tial Direct Environmental Impact
In 1975 the Federal Task Force on Inadvertant Modifi-
cation of the Stratosphere, [IMOS, 1975] identified the
single largest national use of CFCs as the aerosol industry in
the United States. At that time, approximately a quarter of
world CFC production was utilized in this market. Whether sub-
sequent regulation of that market was justified remains highly
debatable but it represented the only single use and single
nation market that when eliminated would make a significant
impact (25%) on global CFC emissions.
Any futher unilateral national response, whether of
single CFC use such as aerosol propellants or all uses in any
country, will not have a significant impact on global CFC
emissions. This may be seen from an analysis of numbers pre-
sented in the ANPR.
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EPA estimates that 35.8 percent of total world use in
1977 occurred in the United States. EPA also estimates that
eventual depletion of the ozone will reach 16.5 percent should
emissions continue at 1977 levels. Therefore, one may conclude
that even if all U.S. uses were banned immediately, but other
countries were not to act, the maximum impact on the eventual
ozone depletion numbers would be 35.8 percent of the predicted
16.5 percent depletion, resulting in an eventual depletion of
10.6 percent.
In the ANPR, EPA also presents estimates of ultimate
depletion, assuming that instead of emissions remaining constant
at 1977 levels, they grow worldwide at 9 percent annually until
1990. Without debating here the reasonableness of this forecast
(see Appendix J) , under this scenario EPA concludes that the
U.S. contribution to eventual ozone depletion would be 7.5 per-
cent (absolute) of the calculated 32.0 percent total eventual
depletion, or only 23 percent (7.5/32.0) of the problem. Clearly
then, a total U.S. ban under this scenario would only have a
small impact on the eventual problem.
Of course, EPA is not now proposing a ban, but is
proposing a cap on U.S. production at current levels. Under
this scenario, EPA's numbers show that the U.S. contribution to
ozone depletion would be 4.5 percent (absolute) of the calcu-
lated 29.0 percent total eventual depletion, or 16 percent
(4.5/29.0) of the problem. So the direct potential environ-
mental gain (calculated by EPA) from capping U.S. production in
1980 versus letting U.S. production increase until 1990 (at the
assumed world growth rate of 9 percent) is only a net decrease
in eventual ozone depletion from 32 percent to 29 percent, a 9
(32-29)
percent ( 32 ) relative decrease in the potential eventual
problem. But, under this scenario, the U.S. contribution to the
potential eventual problem would decline from 7.5 percent
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(7.5-4.5)
(absolute) to 4.5 percent (absolute), a 40 percent ( 7.5 )
relative decrease.
In conclusion, the proposed U.S. cap on production
would not directly result in a significant reduction in ultimate
ozone depletion, were it to occur. In fact, if the theory is
correct, even a total immediate U.S. ban would not result in the
eventual problem being significantly reduced. Therefore, EPA's
statement, quoted at the beginning of this section, that the
present regulatory initiative to limit (cap) U.S. production is
"so that the potential for ozone depletion is limited to present
levels" simply is not supportable even by EPA's numbers.
As EPA also can draw the same conclusions from these
numbers, we have to assume that the major objective of the
Agency's cap proposal is political, i.e. "to stimulate coord-
inated worldwide action" [by pressuring other countries to
regulate through the setting of U.S. example]
2) Why U.S. Production Cap Will Not Result in EPA's Goal
of Worldwide Regulatory Action
EPA has stated that:
"Worldwide regulation of CFC emissions is needed.
However, worldwide action does not appear to be
forthcoming." [EPA, 1980e, p. 2]
And as discussed previously, one of the stated objectives of the
U.S. cap is to stimulate other countries to regulate.
The Agency then supports this action with the
convoluted logic that:
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"...while action by other nations is not assured
if the United States acts at this time, inaction
by the United States would almost certainly assure
inaction by the rest of the world." [EPA, ]980e,
p. 2]
These few statements raise so many issues it is difficult to
know where to begin. However, the following points seem
pertinent:
a) We would agree with EPA that major worldwide
regulatory action is not forthcoming at this time but we differ
sharply with EPA as to the "why". The above statement, when
taken with the Agency's stated justification that a cap will
"stimulate coordinated worldwide action", seems to suggest there
is a lack of ability on the part of other countries to under-
stand the problem, or that foreign nations are indifferent to
possible environmental threatsand therefore, the only way to
resolve this problem is through the political tactic of the U.S.
setting an example.
We believe that worldwide regulatory action is not
forthcoming because assessments of the issue (the science, the
uncertainties, the risk) by others lead to the conclusion that
further regulatory action is not needed at this time. Upon a
reading of the United Kingdom's [UK DOE, 1979] report and
the ECC Commission's [EEC, 1980] report there can be little
doubt that the science has been reviewed thoroughly, but found
wanting opposite the justification for further regulation.
b) The position of EPA that further regulation is
needed has been quite well known by other countries for some
time [Blum, 1980; EPA, 1980a]. Therefore, we must question
the logic that only through further U.S. regulation will other
nations be stimulated to regulate. If they have not chosen to
act as EPA feels necessary, it surely is not because EPA has not
made its position known. Perhaps it is because others do not
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agree with the Agency's analysisin which case we fail to see
how further U.S. regulation or "example setting" by the U.S.
will resolve the underlying differences in the assessments. A
U.S. cap on production will not be an effective signal to others
that there is an urgent need to regulate absent the availability
of more persuasive facts that the problem is indeed sufficiently
serious to require further immediate action. It seems unlikely
that the rest of the world will rush to decimate its CFC indus-
try in response to EPA's example, and urgings for regulation,
when such urgings are based on a tenuous theory.
c) It can be argued that the United States
already has taken substantial action, which if "leading by
example" is a viable tactic, should have resulted in substantial
worldwide regulatory action. Specifically, the U.S. showed a
willingness to promulgate a ban on half of its use of CFCs
aerosol propellantsin 1978. We find it significant that,
although a few small or nonproducing countries followed suit, no
major industrialized nation has.
If a 50 percent cutback by the United States was not
effective in obtaining the international regulatory cooperation
EPA believes is needed, what probability is there that further
U.S. regulation, such as a production cap, will, in and of it-
self, have the desired effect? Discussion of logic, support and
probability of success for the proposition that unilateral U.S.
regulation will force regulation by others, is notably lacking
from the ANPR. For EPA just to say its policy will be effective
is hardly adequate. The burden is on the Agency to demonstrate
that its proposals will result in environmental benefit in
excess of costs.
d) Perhaps the most questionable aspect of EPA's
logic is the statement that although further U.S. action may not
in and of itself, assure action by others, inaction by the U.S.
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would assure inaction by the rest of the world [EPA, 1980e,
p. 2].
A number of points are pertinent here:
i) An arrogance is expressed that unless the EPA
regulates no one else will take any action. We
presume this means EPA believes that others will
be incapable of making risk assessments and
reaching a regulatory determination on their own
without EPA's regulatory example.
ii) The Agency is narrow-minded in its view of what
constitutes "action". The clear implication is
that the only consequential action is regulatory
action. Yet, the EEC, for example, can hardly be
accused of taking no actiona commitment has been
made to study the science, to periodically review
the results, and to periodically reassess the need
for further regulatory action. We view this as a
significant and wise course of action.
Likewise, EPA's assessment of potential actions
available to EPA is limited. The choice of action
does not have to be between regulating now or not
regulating now. An alternative action by EPA
would be to work to obtain the needed inter-
national resolution on the science and to pursue
time-trend analysis. A firm commitment to a
resolution of the science could not be viewed by
anyone as a lack of action.
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D. CONSEQUENCES OF THE U.S. UNILATERAL RESPONSE
1) Potential for Counterproductive Results
The political approach being taken by EPA could have a
number of results which would be counterproductive to any even-
tual resolution of this issue.
a) It can be argued that any further U.S. regulation
could be viewed by the rest of the world as affording more time
before having to seriously consider evaluating whether the
problem is real and, if it is, to what extent action is called
for. This probably will not be true of countries in the EEC
(who already are engaged in periodic reviews and assessments) ,
but certainly could be valid for those nations not yet so
involved. And even in Europe, a knowledge that the U.S. is
continuing to act to limit the potential for any eventual
problem could lead to a perception that this creates more of a
safety margin for evaluation before any further decisions would
be necessary. EPA expressed concern in the ANPR for this
possible outcome, yet then concluded the cap proposal would
minimize its possibility. Once again we question the logic and
support for a conclusion that the potential for a problem has
been eliminated just because EPA has said that it has.
b) Another possible result would be more serious.
The political approach taken by EPA could create a backlash.
The CFC/Ozone Issue is a complex scientific problem. Others,
for example, the UK [UK DOE, 1979] and the EEC [EEC,
1980], are attempting to manage the problem by first attending
to the science and, only then, following with political or
regulatory actions as may be needed. EPA's continuing political
push for further regulation, absent attempts to resolve the
underlying differences in the scientific assessments between the
large producing countries, could create the perception that EPA
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is being extremewanting regulation regardless of costs or the
facts of the matter. To the extent that EPA's approach is
perceived this way, and results in offending other governments,
the approach will be counterproductive to obtaining the inter-
national assessment and cooperation that most agree are needed.
The issue would become further polarizedexactly opposite to
what is needed. This threat is not academic.
2) Imbalance Between Costs and Potential
Environmental Benefit
In section C we raised questions as to the potential
effectiveness of EPA's unilateral regulatory approach to
obtaining regulation by other nations. To the extent we are
correct in our assessment that the Agency's plan as presently
proposed will not achieve its goal, the possibility is created
for a gross imbalance between the potentially large cost of this
plan to the U.S. but only marginal theoretical environmental
benefits. Others, including EPA contractors, have also examined
this question, concluding:
"In the absence of control actions by other nations,
the benefits accruing to the United States alone from
stringent domestic control measures are less than the
costs of those measures." [NAS, 1979b, p. 259].
"Moreover, if the U.S. pursues a regulatory program
while most of the rest of the world does not, the con-
tinued unregulated emissions abroad will limit the
effects of the U.S. program to a modest worldwide
effect, with a hopelessly unfavorable balance between
costs and benefits to the U.S." [Bailey, 1980, p.3].
The cost to the United States of EPA's proposed cap and economic
incentive control options is discussed in detail in Section VII.
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3) Loss of Politial Option
In the middle 1970s, before the U.S. aerosol pro-
pellant ban, the U.S accounted for roughly 50 percent of world
CFC production and use. The EPA then banned U.S. production and
use of CFCs as aerosol propellants in 1978. Prior to the
initiation of this regulatory process, U.S. aerosol propellant
uses of CFCs amounted to approximately half U.S. production, or
25 percent of the world total. If one accepts the "leading by
example" logic, it is most surprising that this large "signal"
has not resulted in significant regulatory actions by the rest
of the world.
The situation today is that the U.S. uses approx-
imately 36 percent of total CFC produced, and assuming EPA's
present growth/year, by the year 1990 the U.S. contribution to
the eventual ozone depletion problem would be only 23 percent
(7.5% depletion from U.S. contribution )_
(32.0% depletion - total world contribution) (ANPR, Table 3) .
However, EPA is proposing to cap U.S. production at current
levels, and absent action by other countries, the Agency calcu-
lates (ANPR, Table 3) this will result by 1990 in the U.S. con-
tribution to the eventual ozone depletion problem falling to
only 16 percent of the problem ( 4.5% depletion from U.S.)
(29.0% depletion - world)
The question we ask is this: If the major U.S. action
of cutting production by 50 percent did not result in major
regulation worldwide, and, if as we predict, the current pro-
posed action (to cap U.S. production) also will not have the
result of major regulation worldwide, what conceivable chance
will the U.S. have to influence the eventual problem in 1990,
when at that time the U.S. will only contribute 16 percent to
the total potential problem? What pressure will be available at
that time to the EPA, especially when through preceding
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excessive reliance on the political approach it 'may have
discredited its input into the international scientific arena?
Clearly, the U.S. must not allow itself, through
premature reliance on a heavily political approach, to end up in
a situation where little has been gained but the political
approach tool is no longer viable. It is much better to use the
scientific approach now (which sooner or later has to be
addressed anyway) and reserve the political approach to such
time and place where it may make a meaningful difference.
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E. NEED FOR A TRUE GLOBAL ASSESSMENT, CONSENSUS
AND RESOLUTION OF ISSUE
In the previous sections we have presented the global
nature of the CFC/Ozone Depletion issue and seen that no one
country unilaterally can have a significant impact on the
outcome through direct regulatory action, even including total
bans. We have discussed the differences in the approach to this
issue between EPA and other nations, principally those of the
EEC. Using EPA numbers, we also have shown how EPA's unilateral
cap proposal will not have a significant direct environmental
benefit absent action by other countries. And we discussed our
reasons for believing that the unilateral approach by EPA will
not result per se_ in other countries moving to regulatea
repudiation of the "leading by example" premise.
The main reason for the projected failure of EPA's
unilateral approach is that it is a political answer to what
remains a complex scientific question. That other major coun-
tries accept the problem as a scientific one, and are working to
resolve it accordingly, has been demonstrated through numerous
quotations taken from recent official documents such as the UK
DOE [1979] and EEC Commission [EEC, 1980] reports.
Whatever actions the U.S. EPA follows, we believe most
foreign countries are likely to continue to seek and react to a
scientific resolution. Outside the U.S. there is little incen-
tive or movement to adopt an excessively political posture
opposite what so obviously are scientific concerns, nor is there
the disregard for the economic penalty which marks the U.S.
regulatory process.
The NAS [NAS, 1979b] clearly recognized the need
for a global scientific consensus, sensing that only through
such a consensus can the problem, if real, be dealt with. In
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fact, it appears that throughout the world the U.S. is one of a
handful of countries that do not place a scientific consensus
clearly at the top of their list of priorities for handling the
concern over stratospheric ozone depletion by CFCs.
We come, therefore, to the inescapable conclusion that
to effectively influence, in any major way, the outcome of this
issue, a cooperative global effort is required and that effort
must begin with the basics a global assessment and consensus
of where the science stands, the degree of uncertainty, and the
risk of waiting for better information in light of the results
from ozone trend analysisa consensus which presently is
clearly absent. If the problem is real, the sooner this assess-
ment is undertaken, the sooner a resolution can be reached on
the need for (and degree of) action, and the sooner appropriate,
coordinated, equitable international control action can be
undertaken. If the problem develops not to be quantitatively
significant, the sooner individual countries, e.g., the U.S.,
can cease unilateral actions which place their industries and
economies at an international disadvantage.
If regulation is necessary, the response must be
essentially global and be based on appropriate scientific and
economic investigation. The extent to which the EPA reacts
without the knowledge from such investigations is largely
immaterial in terms of the global environment, although not to
the U.S. economy. Indications are that political lobbying of
foreign governments by EPA is unlikely to produce significant
further regulatory results, but will continue to further
polarize world scientific opinion, directly counter to progress
towards a scientific consensus.
There is time to obtain this consensus without
unreasonable risk to the world's populations and environment
(See Section V). The UK [UK DOE, 1979], the EEC [EEC, 1980],
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and industry's assessments all find, for example, that up to 5
years could be taken without substantial risk. And the
existence of ozone trend analysis provides an additional margin
of safetya margin which could be reviewed annually to assess
the wisdom of further regulatory deferral.
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F. THE LEADERSHIP ROLE - SUGGESTIONS ON HOW TO PROCEED
In its CFC Development Plan, EPA states:
"The United States as the largest producer and user of
CFCs, must take a leading role in this effort [to
obtain worldwide regulation of CFCs]." [EPA,
1980e, p. 2]
We believe the Agency's view of what constitutes
appropriate leadership on the CFC/Ozone Issue is skewed. The
Agency's view seems to be that leadership means being the first
to regulate. We believe, on the other hand, that the leadership
role should be in obtaining the needed global resolution of the
science and then, _if_ it is needed, to lead a global coordinated
effort to obtain the appropriate equitable degree of regulation.
It is likely that virtually all major producing
countries would appropriately regulate CFCs i£ current concerns
over ozone depletion were validated throughly. It is also
evident that U.S. political pressure, in the absence of such
adequate validation, has had very limited success, and it is
doubtful that much further regulation elsewhere will occur
unless an accepted scientific justification is developed.
There is a critical opportunity for U.S. leadership.
That opportunity is to organize an international program,
involving government, industry and academia, to resolve
uncertainties and to work towards generating the objective
scientific information needed. However, as discussed in the
previous section, if for no other reason than the fact that
other key nations view the science as unresolved, EPA cannot
lead simply by proceeding with, and pressuring for, further
regulation. Such "leadership" will be rejected.
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There is another major advantage in the U.S. leading a
"learn-before-regulating" effort. The ozone depletion concern
of the EPA (if it has not already been adequately demonstrated
by the essentially complete ban on aerosol uses), can be demon-
strated on a continuing basis by technical leadership in an
international scientific program, and, at the same time, the
risks from hasty or unnecessary regulation in the U.S. can be
mitigated.
We suggest elsewhere in this submission how such
leadership might be effected, but basically the recommendation
is that the National Research Council and the United Kingdom
Royal Society jointly convene with corresponding scientific
societies in France, Germany, Italy and such other countries as
are appropriate, to form a scientific review committee to
2
produce an international review of the issue. We further
recommend that EPA postpone both regulatory action in the U.S.
and political lobbying for CFC regulation abroad until such
reviews are made.
By supporting such an attempt to reach a truly
objective assessment, and refraining from domestic and inter-
national efforts to lead the conclusions of the committee to any
preconceptions of what that conclusion should be, EPA would
demonstrate both its concern for reaching sound conclusions on
the CFC/Ozone Issue and its leadership abilities.
A complete review of the science, taking into account all
the most recent developments, would be the ideal. How-
ever, if such a broad undertaking cannot be effected,
there are more limited areas for review which would
maximize the paybackozone trend analysis being the
foremost among these.
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In summary, the United States can more effectively
demonstrate its concern and leadership by coordinating a
research effort which will stimulate the reaching of an
international scientific consensus, than by international
political pressure.
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G. INTERNATIONAL TRADE IMPLICATIONS OF PROPOSED CONTROLS
The following discussion focuses on the trade impli-
cations of the proposed economic incentives options. Legal
issues relating to regulatory authority over imports and exports
are reviewed in Section III. Detailed comments on the economic
implications of these regulatory options appear in Section VII
and Appendix I.
1) Exports
From a reading of the ANPR, the basic export question
is whether (under a cap on U.S. CFC production, in conjunction
with some sort of allocation scheme or any other regulatory op-
tion) exports of CFCs should be considered part of the domestic
limit or excluded altogether. We will demonstrate why exports
should be excluded. However, regardless of the regulatory
outcome, special care should be taken to insure that the U.S.
world trade position is not unilaterally and unfairly penalized.
a) Inclusion of Exports Under Domestic Cap Would
Eliminate Exports
In discussing its thinking that a U.S. production cap
should cover both domestic use and export, EPA states in the
ANPR:
"...it appears unlikely that firms would continue
exporting because they would be placed in an unfavor-
able pricing position in the foreign CFC market."
We agree with EPA's analysis. The CFC business, both
domestic and abroad, is extremely competitive, manifesting
itself primarily in extreme price sensitivity. A small increase
in price by one supplier will result in dramatic volume shifts
to lower priced suppliers.
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Were export pounds to be incorporated under a domestic
production cap, with the resultant increase in price (projected
and desired by EPA in order to drive down CFC demand), U.S.
producers would be in the position of trying to compete in
export markets with a commodity chemical at a price higher than
available from foreign firms. This would be so because foreign
firms would not be subject to the artificially higher prices
brought on by the cap and allocation system. Under such condi-
tions, U.S. firms would lose essentially all their export
business. Given the current concern over U.S. trade deficits,
such a scenario created by unilateral U.S. regulations seems
totally out of place, particularly in that, as we shall see
below, such action will produce no net environmental benefit.
b) Restriction of Exports Would Have No Net
Environmental Benefit
While it may be argued that a domestic production cap
imposes no direct restrictions on exports per se, the antici-
pated higher prices resulting from a production cap and alloca-
tion scheme (discussed at length in Section VII and Appendix I)
will result in a loss of the U.S. CFC export market.
What is particularly appalling to us is that even if
all U.S. exports of CFCs were eliminated, there would not be any
decrease in total world CFC use or emissions.
As EPA acknowledges in the ANPR:
"Under [an] approach of including exports in the
[domestic U.S.] production ceiling, foreign firms
could conceivably increase their production to offset
any decrease in U.S. exports, which would run counter
to the long term goal of reducing global CFC
emissions."
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International Aspects
We agree with this EPA observation except the words
"could conceivably" should be replaced with "would".
There are four ways to meet CFC demand in a given
foreign country: 1) U.S. exports, 2) exports from other
countries, 3) production by a U.S. owned manufacturing facility
in that country, and 4) production by a foreign owned manu-
facturing facility in that country. Any restriction, direct or
indirect, for example through pricing, of the ability of U.S.-
based firms and facilities to export would absolutely have no
impact on the underlying demand for CFC in the subject country.
The demand would still be met - but by foreign export or foreign
production facilities. The net result: loss of U.S. export
market; gain for foreign producers; no net change in amount of
world CFC use; no net change in potential environmental problem;
so no environmental benefit from this unilateral U.S. regulatory
option.
If a regulatory policy results in no benefit to the
environment, it should not be implemented, particularly when
such a policy would severely penalize U.S. industry and
exacerbate a major U.S. problembalance of trade.
c) EPA's Defense of Proposed Policy to Include
Exports Under a Domestic Production Cap is Weak
The Agency obviously anticipated the above arguments
against the inclusion of exports under a domestic production cap
because several paragraphs in the ANPR are dedicated to the
Yet another consideration is that the U.S. would still be
penalized even if the CFC/Ozone Depletion Theory is even-
tually totally invalidated. This is so because a cessation
of exports by the U.S. will result in a dismantling of
export organizations which were years in the making. These
could not be replaced very readily or rapidly.
VI-25
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International Aspects
discussion of why, even in the face of the above situation,
exports should not be exempted. We find these arguments to be
weak. Consider the argument in the ANPR given opposite the fact
that foreign producers would increase their production to
replace no longer competitive U.S. exports:
"However, some nations have already taken action to
limit their capacity to produce CFCs and have
indicated that they will consider taking additional
actions."
The facts are that:
i) Only countries of the EEC (nine) have limited
capacity and this is only on CFC-11 and CFC-12,
whereas all U.S. CFC exports to countries around
the world would be eliminated by the production
cap induced higher prices.
ii) The bulk of exports are CFCs other than CFC-11 and
CFC-12 anyway so the capacity cap in Europe is
irrelevant.
iii) A limit on capacity is hardly the same as a limit
on production. (Given the European phasedown of
CFC-11 and CFC-12 aerosol propellants there is
excess capacity which could be utilized to produce
the CFCs to fill the void created by the U.S. loss
of exports).
iv) The statement that other nations have indicated
they will consider taking additional action
requires explanation. What nations? What action
(to what degree and with what effect)? When? How
would this balance out the penalty to U.S.
business? These are all unanswered questions.
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International Aspects
The ANPR presents a second argument as to why exports
cannot be exempted:
"The global problem may be exacerbated if the United
States is in the position of encouraging other nations
to take further actions to control CFC emissions while
at the same time not controlling United States CFC
exports."
Several questions are pertinent opposite this
statement:
i) What global problem will be exacerbatedthe
problem of other nations not agreeing with EPA's
assessment that regulation is needed?
ii) How does this bear on the question of whether EPA
should undertake any action which would eliminate
U.S. exports without any potential offsetting
environmental gain?
iii) Are not other nations able to cut off imports from
the U.S. if they believe them to be harmful? Is
EPA the only body which is capable of deciding
whether CFCs are harmful?
If, as we suggest in sections E and F, EPA were to
concentrate its efforts on obtaining an international assessment
of the science, followed by a resolution between countries on
what was the risk and what, therefore, needed to be done, the
Agency's concern over exacerbating the global problem would be
eliminated. Further, such a resolution, leading to a global
cooperative program of regulation (should it be needed), would
eliminate the unfair impacts which would be brought on by EPA's
unilateral approach.
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International Aspects
d) EPA Expresses More Concern For Foreign Exporters
To The U.S. Than For U.S. Exporters To Other
Countries
The ANPR states:
"...a mechanism must be devised to regulate imports of
CFCs and CFC containing articles so that imports are
neither given an advantage nor placed at a disadvantage
in comparison to domestic manufacturers."
We already have seen how the Agency's proposed in-
clusion of exports under a domestic production cap will elimi-
nate U.S. exports of CFCs. The only concern expressed by EPA in
this regard is that if exports are not so controlled, it may
create problems for EPA with foreign governments. No concern is
expressed by EPA for the economic consequences to U.S. industry
or the U.S. economy from such action. Yet on the import side of
the equation, EPA is concerned that imports not be placed at a
disadvantage. It would seem that it is acceptable to penalize
U.S. industry but not to compensate it.
In conclusion, we believe that any U.S. cap on
domestic production should exclude exports.
Failure to exempt exports will result in an
elimination of exports.
Loss of U.S. exports will be filled by foreign
producers, so there will be no net environmental
change.
Loss of exports unfairly penalizes U.S. industry
and the U.S. economy.
EPA's defense of this policy proposal is weak.
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International Aspects
2) Imports
The agency presents three options for treatment of CFC
imports: a) freezing imports at current levels; b) capping
imports at current levels in conjunction with a permit system;
and c) putting imports under the total domestic cap and allowing
foreign producers to bid for production rights. Before
commenting on some of the implications of these options, we
suggest that a fourth option be added to the listtreating
imports exactly the same as exports.
a) Imports Should be Treated The Same As Exports
As policy, the United States is opposed to trade
barriers, which any of the above options would amount to.
However, given the anticipated effect of EPA's proposed policy
on exports, we believe it is grossly unfair to U.S. industry and
to the nation to not attempt to balance out the import/export
equation. Simply put, if U.S. industry will not be able to
export CFCs to foreign markets, neither should foreign producers
be allowed to export their product to our markets, especially
under conditions of a limited domestic market. Since inclusion
of U.S. exports under a domestic cap does not ban these exports
as such, but only renders them non-competitive to foreign
suppliers due to higher price, foreign suppliers (with a price
advantage due to not having to meet the imposed U.S. regulatory
requirements) should not be permitted to expand their sales in
the U.S. market at the expense of U.S. industry.
If, as EPA states, the objective is to devise controls
on global CFC usage, the U.S. government must, at a minimum, be
concerned with a combined export-import policy which does not
place the U.S. industry at a competitive disadvantage to foreign
producers.
VI-29
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International Aspects
b) If U.S. Production Is Capped, Imports Should be
Capped Separately And On The Same Basis
Developing the above thoughts opposite the options
presented for the treatment of imports, we believe that, at a
minimum, it would be necessary to either freeze imports at the
level in the base period proposed for domestic production, or
cap imports at this level in conjunction with a permit system.
We strongly oppose the option of permitting foreign producers
unlimited access to a capped U.S. market as it would mean
significant loss of U.S. market to foreign producers for the
reasons detailed below.
Under a cap, the cost to a U.S. manufacturer producing
CFCs would have 3 elements: 1) raw materials, 2) cost of
manufacture, transportation and sales other that raw materials,
and 3) the cost of the production permit. A foreign producer
entering into the capped U.S. market also would have all three
costs except that item 2 would be lower. . This is true for the
following reason. Under a cap, U.S. producers, not being able
to export competitively and having a ceiling on how much could
be made domestically, would find their cost per CFC pound-
produced increasing at a rate faster than that of foreign
producers. The difference is in fixed cost. Fixed cost items
such as overhead will go up yearly, but the total amount
produced under a cap is held constant, so the cost per pound-
produced increases. Foreign producers, on the other hand, not
being limited to how much can be produced, will be able to
spread these cost increases over an increased volume of
production, and keep the fixed cost per pound steady or maybe
even lower it. Over time, the difference between the U.S. cost
per pound and the foreign cost per pound could become great.
Assuming that all other costs, e.g., raw materials, labor, etc.,
remain roughly comparable, the net result will be the ability of
foreign producers to offset higher permit pound bids by the
VI-30
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International Aspects
lower cost per pound of production. Therefore, foreign
producers could purchase permits at a price in excess of what
could be justified by U.S. producers, given the restricted
demand for the end product. Therefore, over time, foreign
penetration of a U.S. market would increase at the expense of
existing U.S. industry.
EPA states in the ANPR:
"...this option [the option of including imports
under the domestic production ceiling and allowing
importers to compete in the permit market with
domestic firms]...would remove the possibility of
importers enjoying a cost advantage over domestic
manufacturers."
Economic realities indicate that this conclusion is
wrong.
A policy which penalizes the cost structure of U.S.
industry over foreign producers, prices U.S. producers out of
foreign markets, and then permits foreign producers unlimited
access to U.S. markets is extremely inequitable and unwise. If
the need arises for U.S. production to be capped, import levels
also must be capped but on a separate basis. If permits are to
be sold for U.S. production, separate permits also must be sold
for imports.
c) Taxing of Imported Finished Goods Made With CFCs
There would be another problem for U.S. industry which
would develop under a unilateral domestic CFC production cap.
This would be the competitive advantage created for imported
final products which were produced or processed by, or which
contained, CFCs. Domestic manufacturers would have to pay a
premium for CFCs under a cap. However, foreign manufacturers
producing goods abroad which are dependent upon CFCs, for
VI-31
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International Aspects
example, frozen shrimp or berries, would only have to pay
"normal" CFC prices. Upon importation into the United States,
these foreign goods would be at a cost advantage to domestically
produced goods. The same would be true for products containing
CFCs, such as auto air-conditioners. In fact, it is conceivable
that certain products dependent upon CFCs now produced in the
U.S. would have their manufacturing exported in order to assure
CFC availability at a reasonable pricefollowed by the finished
goods then being imported back into the U.S. Obviously, all of
these situations would penalize domestic manufacturers without
resulting in any net potential environmental gain from lowered
consumption of CFC.
EPA's contractor, The Rand Corporation, examined this
problem and concluded:
"Under either economic incentives or mandatory
controls [if they were to be imposed], both of
which increase the costs of producing domestic final
products, imported final products made with CFCs
should be taxed." [Rand, 1980, p. 247]
d) Potential For Illegal Imports Has Not Been
Addressed
Given the likely high cost of CFCs under a domestic
production cap, there would be temptation for some to attempt to
obtain "unpermitted" CFC at a lower price. To the extent this
situation evolves, EPA's stated objective of limiting CFC
production would be undermined and those U.S. users not involved
would be placed at a competitive and product price disadvantage.
Rand also touched on this point, concluding:
" As noted later in this section, one possible
enforcement problem raised by economic incentives
policies might be prevention of illegal CFC imports."
[Rand, 1980, p.242]
VI-32
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International Aspects
" Unlike mandatory controls on the behavior of users,
economic incentives policy requires enforcement to
prevent illegal imports of CFCs." [Rand, 1980,
p.246]
The ANPR makes no mention of this potential problem.
VI-33
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International Aspects
H. SUMMARY
A paramount fact of the CFC/Ozone Depletion Issue is
that the problem, if it exists, is global in nature. This fact
bears both on any assessment of the problem and importantly in
consideration of any solution. This cannot be stressed enough,
for even if CFCs eventually are proved to deplete ozone to the
degree calculated by the models, and the potential effects are
as projected by the NAS, the fact remains that without global
acceptance and commensurate action the problem cannot be
solved. Unilateral action by any country cannot significantly
reduce the risk should the theory and all its elements be valid.
This reality has been addressed throughout the
evolution of the issue by most participants, including EPA and
its contractors:
"It should be noted that effective control of CFC
caused ozone depletion cannot be achieved by one
nation acting alone." [EPA, 1980e, p. 2]
Yet EPA's analysis in the ANPR of the international aspects of
this issue does not seem to us to reflect an understanding or
proper perspective of this global reality.
In the first place, EPA's approach to the issue seems
to be one which emphasizes political over scientific aspects.
We find that EPA has determined the problem is real (despite the
acknowledged uncertainties) and has concluded, therefore, that
it requires immediate worldwide regulatory attention. Yet the
very countries the Agency's program is focused on, the EEC,
continue to view the problem as an unresolved scientific
issuean issue which must continue to be studied, but one not
requiring immediate regulatory attention: ". . .a delay of 5
years before any decision is taken on CFCs can be reasonably
accepted." [EEC, 1980]
VI-34
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International Aspects
Given these sharp differences between the assessments
and programs, we believe the Agency's proposed unilateral
response is inappropriate, inefficient and not likely to obtain
the stated goal of "coordinated worldwide action." [EPA,
1980e]. Specifically, the proposed production cap will not
have any consequential direct environmental effect if other
countries continue to produce CFCs as forecast. (Indeed, even a
unilateral total U.S. ban would not reduce the problem enough,
if the theory proves to be real.) Further, given the underlying
reasons for the differences between the regulatory programs of
the U.S. and other countriesdisagreements over the science--we
fail to see how the effort being advanced by EPA, with a stated
objective ". . .to stimulate coordinated worldwide action," can
have much chance of success if EPA ignores the need to resolve
the science assessments. The U.S. already has taken action well
beyond that of any other major producing country, yet apparently
this "example" has not been sufficient stimulus to obtain
worldwide regulatory action. The question must be asked then:
"On what basis does EPA expect such contrasting success for the
proposed production cap?" EPA fails to provide any support in
the ANPR for such success, much less document any cost effec-
tiveness. In fact, EPA's own contractors [NAS, 1979b; Bailey,
1980] found that absent control actions by other nations, the
U.S. would be faced with ". . .a hopelessly unfavorable balance
between costs and benefits." [Bailey, 1980]
A recent editorial in the New York Times touched on
all of the above points:
"If countries around the world continue for a
decade to expand their use of chlorofluorocarbons, the
American limits proposed by the E.P.A. would have only
a trivial effect. So E.P.A. justifies its plan
largely as a diplomatic signal, to show other nations
that the problem requires international attention.
But that rationale deserves further scrutiny."
VI-35
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International Aspects
"A domestic freeze would inevitably drive up the
prices of many productshow much remains to be
spelled out; some say only a little. But a nation
already burdened with rising costs should not take
another costly regulatory step for insufficient gain.
If America cannot succeed along at this task, the
E.P.A.'s proposals need to be measured by their
diplomatic value in persuading other nations to
cooperate. So the wisest course might be to make
further American restrictions contingent on inter-
national action. The need is for more global
controls, not unilateral disarmament." (emphasis
added) [N.Y. Times, 1980].
There must ultimately be global resolution on this
issue, followed by an appropriate coordinated program to deal
with the problem, if it is found to exist. Since EPA's proposed
program will not advance this objective (in fact, a case may be
made that the Agency's program will be counterproductive), what
then? We come to the inescapable conclusion that there must be
a return to basicsa global assessment and consensus of where
the science stands, the degree of uncertainty and the risk of
waiting for better information. If the problem exists, the
sooner this is undertaken, the sooner a coordinated global
program can be effected to deal with it. If the problem
develops to be insignificant, the sooner the individual
countries like the United States can cease unilateral activities
which place their industries and economy at a global
disadvantage.
There is an opportunity for the United States to take
a leadership role to obtain the above assessment. Several
suggestions have been made on how to proceedbeginning with a
discontinuation by EPA of the currently favored political
approach of attempting to effect world regulation by example.
Last, we have examined the international trade
implications of the proposed U.S. domestic production cap in
conjunction with allocation or auction schemes. We find that,
VI-36
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International Aspects
as proposed, these options would place U.S. industry at a
competitive disadvantage, both abroad and at home, yet not
result in any meaningful potential environmental gain. In
particular, any option incorporating exports under a domestic
production cap would result in U.S. exports being priced out of
foreign markets. These markets, however, would be met by
foreign producers who are not restricted, with the result that
although U.S. industry is penalized, there would be no gain
towards EPA's environmental goal. EPA mounts no legitimate
defense in the ANPR for such a consequence. On the other side
of the coin, we find that foreign producers, operating under an
unrestricted climate, could, over time, develop a substantial
cost advantage to U.S. producers who would be operating in a
severely limited market. Unless any potential regulation takes
specific steps to place imports to the U.S. under the same
constraints and penalties as mandated for domestic production
and export, we foresee a loss of the U.S. market to foreign
producers.
VI-37
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VII. ECONOMIC CONSIDERATIONS
Page
A. INTRODUCTION . 2
B. ECONOMIC SIGNIFICANCE OF CHLORO- 4
FLUOROCARBONS
C. REGULATION OF CHLOROFLUOROCARBONS 10
VIA ECONOMIC INCENTIVES
D. REGULATION OF CHLOROFLUOROCARBONS 35
VIA COMMAND AND CONTROL
E. INADEQUACY OF THE RAND REPORT 37
F. MISCELLANEOUS POINTS IN THE ANPR 61
WHICH HAVE ECONOMIC IMPLICATIONS
G. SUMMARY 69
VII-1
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Economic Considerations
A. INTRODUCTION
In the ANPR, EPA considers two basic approaches to
further regulation of CFCs: (1) the standard "command and
control" approach, including product and/or end use phase-downs
or bans, and technology-based standards, and (2) a so-called
"economic incentives" approach which would limit aggregate CFC
production or use but provide a theoretical flexibility to vary
product mix, end uses, etc., over time based on market
considerations.
Because EPA states a preference for the economic
incentives approaches, our discussion below focuses principally
on the potential micro- and macroeconomic consequences of these
regulatory options. We also comment on: (1) the lack of
attention by EPA to command and control regulatory options for
CFCs, (2) the inadequacy of the Rand Report [Rand, 1980] (the
major economic study performed to date) to support a regulatory
decision , and (3) miscellaneous points in the ANPR which have
economic implications. Our commentary is largely qualitative,
necessitated by the very short response period for the ANPR
relative to the time typically required to develop quantitatively
supported arguments. The Rand Report was of little help for this
purpose, principally because Rand's data bases have not been made
available. Nevertheless, our viewpoints, as expressed below,
rely heavily on conventional wisdom in their development. As
such, although rigorous analysis is lacking at this point, such
viewpoints should be accepted as valid until proven otherwise by
We include a critique of this report in this section (and more
detail in Appendix I) because it is the only study performed to
date on economic incentives options as they would apply to CFCs,
and because EPA specifically cites the findings of this study in
the ANPR in support of the Agency's stated preference for the-
economic incentives approach.
VII-2
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Economic Considerations
standard techniques of economic analysis. In other words, the
burden of proof is on EPA to show, through such analyses, that
the conventional wisdom is wrong in this instance and that its
CFC cap proposal can be accomodated without severe adverse eco-
nomic consequences.
To help place all the ensuing discussion in perspective,
we begin this section with a highspot summary of the economic
significance of chlorofluorocarbons. Regulatory decisions on
CFCs will affect major industries, with large employment, and a
wide array of consumer goods. Should regulation prove to be
needed, great care will have to be taken to insure that the
regulatory option selected will be the most cost effective to
society.
The fact that Du Pont is offering serious commentary on
the relative merits of some of the regulatory options under
consideration by E?.\ in no way should be interpreted as an
indication that we accept the need for, or the inevitability of,
further regulation of CFC uses. As discussed in detail elsewhere
in our submission, the Du Pont position remains: Since the
subject and effects of potential stratospheric ozone depletion by
chlorof luorocarbons, and potential actions to deal with the per-
ceived problem, are matters of international consequence, we
believe there needs to be an international resolution of the
underlying scientific differences prior to further regulatory
action.
V1I-3
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Economic Considerations
B. ECONOMIC SIGNIFICANCE OF CHLOROFLUOROCARBNS
Table 1 summarizes the economic significance of CFCs-11,
12, 22, 113 and 114 by their major end uses. The numbers were
taken from published information where possible -- where not, the
numbers are Du Pont estimates. The base year varies depending
upon the reference. CFC production and use are for 1979.
VII-4
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Economic Considerations
Note; References cited in these footnotes are not cited in
Section XI Bibliography
NE Not estimated.
(a) Du Pont estimates based on sales information and Du Font's
estimated market share.
(b) Employment and other estimates were made by Du Pont in a
series of white papers on the Chlorofluorocarbon/Ozone
Depletion Issue, August, 1979. Employment in refrigera-
tion and air-conditioning has since been increased to
include CFC-22 related employment.
(c) Report of Federal Task Force on Inadvertent Modification
of the Stratosphere (IMOS)" "Fluorocarbons and the
Environment", June, 1975, p. 98. Employment data is for
1974 except as noted.
(d) Includes service locations and companies.
(e) Air-Conditioning and Refrigeration Institute: "The Ozone
Controversy", June, 1978, p. 21, estimated 97,400
establishments for 1972. An annual growth rate for
1972-1979 of 1.75 percent is assumed, leading to 110,000
establishments for 1979.
(f) Bureau of Domestic Commerce, Department of Commerce:
"Economic Significance of Fluorocarbons", December, 1977,
p. 21.
(g) Source as for (e), reports $20.6 billion for 1972.
(h) Source as for (c) . IMOS data is assumed to include
CFC-22. The employment in CFC manufacture has been
subtracted from the IMOS total for this industry segment.
(i) IR&T Review Draft IRT-20000/1: "The Use and Emissions of
Chlorofluorocarbons in Mobile Air-Conditioning", October,
1978, p. 53. Total service facilities.
(j) Motor Vehicle Manufacturers Association: "Motor Vehicle
Facts and Figures - 1978."
(k) Source as for (i). Replacement value: $500/unit (p. 4).
1976 installed units: 64,498,000, growing at 4.7 percent
per annum (p. 19). 1979 replacement value = 64,498,000 x
(1.047) x $ 500 = $37 billion. Du Pont's lower estimate
of $33 billion is listed the difference is within the
uncertainty of the estimates.
VII-6
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Economic Considerations
(1) IMOS report, p. 98 [see footnote (c)] shows employment in
plants of major uses of CFC solvents.
(m) Du Font's solvent equipment manufacturers (SEMs) sell
approximately 600 units per year and we estimate these
SEMs represent 50 percent of the market for such
equipment. Total sales are thus 1200 units per year with
average life of 8 years. Total in-service units approxi-
mately 10,000.
(n) Du Pont estimate of direct foam line operation,
maintenance and supervision only [source as for (b)].
(o) Society of the Plastics Industry (SPI): "The Importance
rof Chlorofluorocarbons and Polyurethane Foams", Urethane
Division Bulletin U-109, March, 1980, p. 12.
(p) Rand Corporation: "Economic Implications of Regulating
Chlorofluorocarbon Emissions from Nonaerosol Appli-
cations", R-2524-EPA, June, 1980, p. 92. Total CFC-blown
foam production for 1979 is 489 million pounds at average
value of $0.75/lb. (Du Pont estimate) = $367 million.
(q) Replacement value is difficult to estimate. Alternative
blowing agents for insulating foam are not available so
the total replacement value is listed. Our estimate of
$2500 million is contained in a Du Pont memorandum from R.
M. Kitchens to file, dated December 12, 1980.
(r) IMOS Report, p. 98 [see footnote (c)]. Estimate includes
employment for the production of the foam raw materials
and the foam itself, but not the products made from the
foam. This reference does not disaggregate employment by
foam type or use [cf footnote (v) ] .
(s) Source as for (p) , pp. 47, 48. Fifty companies, 70-130
plants (median 100).
(t) Source as for (p) . Table 3.A.3 (p. 46) shows total
flexible urethane foam production at 1,275 million Ib. for
1977, and 1,420-1,690 million Ib. for 1980. We
interpolate 1400 million Ib., for 1979. Table 3.A.I (p.
45) indicates 42 percent is blown with CFC (=588 million
Ib., foam) and the product has an average value of
$1.00/lb.
(u) Du Pont estimates costs for flexible polyurethane plants
to convert to alternative blowing agents at $400,000 per
plant for 100 plants = $40 million. Du Pont memorandum
from R. M. Kitchens to file, dated December 12, 1980.
[see footnote (y) estimates for comparable changes for
polystyrene foam plants].
VII-7
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Economic Considerations
(v) IMOS Report, p. 98 [see footnote (c)]. Larger estimate
includes employment in raw material, foam and end product
production. This reference does not disaggregate
employment by foam type or use [see footnote (r)].
(w) Rand Corporation Working Note: "Interim Report: The Use
and Emissions of Chlorofluorocarbons in Urethane
Closed-Cell Foams", WN-10401-EPA, December, 1978.
Appendix A, pp. 66-67, identifies 29 nonurethane foam
producers. Du Pont estimates, based on market
intelligence, that there are 101 producing locations.
(x) Source as for (w), p. 16 (Table 3), estimates 473,600,000
Ib., for foam produced in 1979. Du Pont estimates average
value at $1.30/lb., for a total value of $616 million.
(y) Rand Corporation Working Draft: "Economic Implications of
Regulating Chlorofluorocarbon Emissions from Nonpropellant
Applications", WD-348-EPA, September, 1979, p. 201. Plant
conversions from CFC-12 to pentane for polystyrene foam
production is estimated at $460,000 structural changes
plus $80,000 per extruder line. Labor costs increase by
$90,000 annually; energy costs increase 12 cents/lb.;
insurance costs 2 percent of capital. Total first year
cost = [(29 x 460,000 + 101 x 80,000) x 1.02] + 90,000 +
(0.12 x 473,600,000) = $79 million. Annual production see
footnote (x).
(z) Du Pont estimate of companies and locations based on
liquid food freezant machines sold by franchised
manufacturers.
(aa) Du Pont estimate based on market intelligence. Average
annual (season) use of equipment (1,000 hours) x average
freezing capacity (13,000 Ib./hour) x number of machines
(30) = 390 million Ib., rounded to 400 million Ib., valued
at $1.00/lb.
(bb) Du Pont estimates 30 machines at average estimated cost of
$300,000 each = $9 million.
(cc) Rand Corporation Working Note: "Interim Report: The Use
and Emissions of Chlorofluorocarbons in Sterilization
Applications", WN-10275-EPA, September, 1978, pp. 9, 10.
Rand estimates 3950 units based on Du Pont estimates
provided in 1978. A subsequent assessment by Du Pont [see
footnote (b)] indicates Hospital and Institutional units
were underestimated by 700 units, and Industrial units
were underestimated by 20, for a revised total of 4670
units.
VI1-6
-------
Economic Considerations
(dd) Source as for (p), pp. 194-195. Market for sterilant gas
is estimated at 11.7-14.3 million pounds in 1976, growing
at 9.5 percent annually, which corresponds to 15.4 - 18.8
million pounds in 1979. Taking the lower end of this
range, and Du Font's estimated price to users of 90
cents/lb., annual value is $14 million.
(ee) Source as for (cc). The Rand estimate for installed value
is $58 - $84 million (pp. 9-11) based on Du Pont 1978
estimates. Using the revised estimates [footnotes (b)],
and market growth rates, a value of $89 million is derived
for 1979.
(ff) Bureau of Domestic Commerce, Department of Commerce:
"Economic Significance of Fluorocarbons", 1975.
Fluorocarbon-dependent employment in the United States
estimated at approximately 600,000, or about 0.7 percent
of the total U.S. employment. In addition, this source
estimated approximately 900,000 indirectly-dependent
employees, for a total of 1.5 million.
-------
Economic Considerations
C. REGULATION OF CHLOROFLUOROCARBONS VIA ECONOMIC INCENTIVES
1. Introduction
EPA indicates a preference in the ANPR for an economic
incentives approach to further CFC regulation, presumably on the
grounds that such an approach minimizes adverse economic
consequences. However, depending on the degree of CFC emissions
reduction sought thereby, this regulatory approach might involve
grave economic impacts for certain industry sectors and for the
U.S. economy as a whole.
There are three interrelated factors which suggest this
would be the case:
Regardless of the precise regulatory approach, the
essence of its impact is to restrict CFC avail-
ability to a level below the market demand prior to
regulation.
CFCs are "essential" in most important end uses,
i.e., as a public policy matter, the needs which
CFCs currently satisfy will have to be satisfied in
some alternate way.
Satisfactory substitutes for CFCs (CFCs or products
depending upon them) generally are not available.
Those substitutes which would have to be used would
create significant safety, energy and economic
penalties to producers, users and consumers .
2
CFC uses and their essentiality are discussed in detail in
Section II.
Footnote 3 appears on following page.
VII-10
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Economic Considerations
Accordingly, even under a regulatory approach involving aggregate
production limits, with the market determining which former end
users do without CFCs, the following type scenario would
eventuate: needs currently served by "regulated" CFCs would be
met at a cost which escalates substantially over time -- as CFCs
become more and more scarce relative to their demand and/or
higher cost substitutes displace CFCs. The eventual consequences
are predictable: higher inflation rate, slower rate of economic
growth, increased business failures, higher unemployment,
deteriorating international competitiveness and an ever-expanding
cycle of economic dislocations growing out of the continued
uncertainty.
These and other economic themes are developed in more
detail below. (A more detailed analysis of economic incentives
options appears in Appendix I). But first, to set the stage for
this discussion, it is appropriate to review briefly earlier
comment on CFC essentiality (See Section II). As a class of
compounds, they are truly remarkable. Available commercially for
some 50 years, they still have no important functional
competition in many of their original end uses. Refrigeration,
air-conditioning, certain other heat transfer applications and
thermal insulating foam are prime examples. This market scenario
is unusual; product life cycles are typically much shorter
because consumer preferences and/or underlying relative cost
positions tend to be constantly changing, with our competitive
free enterprise system fueling the process. CFCs have endured
basically for one reason -- their price has always been
significantly lower than their perceived value-in-use. The
economic implications of this opposite EPA's intent to further
regulate CFCs are particularly pertinent, as will be seen below.
A discussion of currently available substitutes to CFCs may be
found in Section II. Discussion of fluorocarbon alternatives
appears in Section VIII and Appendix B.
VII-11
-------
Economic Considerations
In the following discussion of specific potential
economic impacts from further CFC regulation, our approach, at
this time, is of necessity qualitative, indicating the likely
direction of economic events rather than attempting to quantify
their magnitude. For purposes of this discussion, the assumption
is that CFC production is "capped" at current levels and this cap
is gradually reduced over time to eventually achieve a 50-70%
reduction in CFC use. Although the ANPR does not specifically
propose additonal CFC regulation following imposition of a
production or use cap, it is appropriate to consider economic
consequences in this light because:
EPA has stated its intent to push CFC emission
levels significantly below (i.e., 50-70% range) that
which would be achieved by a cap [Jellinek, 1980a].
From the standpoint of CFC producers and users, the
strong, continuing threat of further CFC regulation
would tend to have the same effect as further
regulation itself, due to the necessity for business
to plan its activities opposite a 10 to 15 year time
horizon (this point is elaborated on under
"Uncertainty", below).
2. Impact on CFC Prices
EPA does not dispute that CFC prices would rise in
response to further regulation. In fact, EPA counts on this to
be the engine which drives reduction in CFC use over time.
However, EPA is apparently assuming this process will take place
in an orderly manner with only minor, if any, economic
dislocation. Unfortunately, EPA's logic is a gross oversimpli-
fication of a highly complex, dynamic process. In our view,
vII-12
-------
Economic Considerations
under the regulatory scenarios proposed by EPA, CFC prices would
rise very rapidly, at times in a totally uncontrolled manner,
and, in their wake, create substantial economic dislocation. The
following analysis illustrates why this would happen.
Figure 1 (page VII-14) portrays a typical supply/demand
relationship and the resulting so-called "equilibrium" price.
The upward sloping supply curve means producers will be willing
to supply more of the product as its price rises; conversely, the
downward sloping demand curve means users will demand less of it
as the price rises. Assuming these relationships reasonably
reflect economic behavior, the system can readily adapt to
change. For example, if demand patterns were to shift due to a
technological change creating new end uses for the product, the
demand curve would shift to the right, meaning that more of the
product would be consumed at each level of price. This causes
the equilibrium price to rise in the short run (Figure 2 - page
VII-15). Producers, noticing the demand shift and reaping the
benefits through higher prices, might then be disposed to add
production capacity, thus shifting the supply curve to the right
at each level of price. This causes the equilibrium price to
decline (Figure 3 - page VII-16). What this demonstrates is that
the natural tendencies of the system permit an orderly process of
change that, absent general inflation, causes reasonable price
stability over time.
-------
Typical Supply/Demand Relationships
Price
Supply Curve
Demand Curve
Quantity
PE = Equilibrium Price
QE = Equilibrium Quantity
Figure 1
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-------
Pro-Forma Supply/Demand Relationship
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-------
Pro-Forma Supply/Demand Relationships
After Supply Increase
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-------
Economic Considerations
However, under the subject regulatory proposal, the
supply and demand relationships for CFCs would present a vastly
different picture. Four points are pertinent:
Absent regulation, the general level of demand for
CFCs would increase over time, i.e., the demand
curve would shift to the right;
Demand for most CFCs is relatively inelastic, i.e.,
demand is not particularly sensitive to price --
this would be represented by a steeply sloping
demand curve;
Regulations, as proposed, will have the impact of
freezing supply at some level--a supply curve
perpendicular to the X-Axis would depict this; then
as reductions in the cap are implemented, this
supply curve would shift to the left; and finally,
General inflation will likely continue at current
rates, say 10% per year, over the long-term -- this
also moves the demand curve to the right.
Figure 4 (page VII-18) is an illustration of these CFC
supply/demand relationships and their probable impact on price.
As indicated, these relationships complement each other in creat-
ing much higher CFC prices. Moreover, with the supply curve ver-
tical and the demand curve steeply sloped, very small changes in
CFC availability or demand portend very large CFC price in-
creases. Obviously, such a situation would be extremely
volatile. For example, prices would be affected, not only by the
VII-I7
-------
Pro-Forma Supply/Demand Relationship
After Production Cap.
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-------
Economic Considerations
forces just described, but also by artificial forces specu-
lators, hoarding, rumors, etc. The volatility that has existed
in exchange markets for many years and more recently in the bond
markets bears witness to this. Another price characteristic
worth noting is that after a rapid increase, prices seldom come
down as far as they went up, even if most of the increase was
unrelated to underlying economic forces.
The foregoing scenario of vastly higher CFC prices and
an extremely unstable price environment would have many unfavor-
able economic consequences; these are described in later sec-
tions. The point to be made here is that EPA misreads the
supply/demand forces affecting CFCs. Whereas EPA sees only a
gradual increase in prices over time reducing CFC use at a pace
industry can manage, we believe the more likely outcome would be
a dramatic rise in CFC prices, particularly as further proposed
restrictions are imposed, to the point where a chaotic market
environment might ensue.
The findings of Rand are worth noting:
"Our cautious assumptions about CFC demand imply that a
very high tax or permit price would have to be set
throughout the entire period to achieve a cumulative
emissions reduction equivalent to zero growth." [Rand,
1980, p. 221] .
3. Inflation
Rand indicates that regulation-induced increases in CFC
prices will not contribute to a higher general inflation rate
because such increases will merely create transfers of funds
within the economy and will not have a fundamental influence on
the money supply [Rand, 1980]. This logic is tenuous in the
context of current economic realities. In particular, a
fundamental consequence of a CFC production cap would be a
reduction in aggregate supply. Economists generally agree that
VII-1S
-------
Economic Considerations
such actions are inflationary. Witness the public policy move
toward so-called "supply-side" economics where the intent is to
increase aggregate supply as a principal means of reducing
inflation.
Also, it is extremely unlikely the government would
permit the market to fully determine to whom and in what
magnitude these transfer payment funds should accrue. Rather, it
is likely these funds would flow to the government for retransfer
in some discretionary manner. This, in turn, is more likely to
stimulate demand than supply, an inherently inflationary action.
Other factors would also cause inflationary impacts: (1) the
greater magnitude of CFC price increases than envisioned by EPA
or Rand would create a larger flow in inflation-inducing transfer
payments; (2) since CFCs are necessary in the production of so
many products, including basics like housing and food, the
downstream effects of higher CFC prices would contribute to
inflation; (3) capital requirements of current CFC users to
support shifts to substitute products could cause an increase in
the level of interest rates, another source of inflation.
Another aspect of the inflation question needs to be
kept in focus. Inflation is viewed as the nation's foremost
domestic problem and efforts to reduce it or, at least, to
control its growth dominate public policy initiatives. In this
environment, it would seem that government actions which would
have the effect of accelerating the rate of inflation, as would
the proposed CFC regulation, should be judged against particu-
larly exacting standards as to their impact on the public
welfare.
4. Economic Growth
a) A generally accepted fact of economic life is that
there is an inverse proportionality between the rate of
VII-20
-------
Economic Considerations
inflation and the rate of economic growth. Accordingly, further
CFC regulation, with its attendant inflationary consequences,
would tend to slow the overall rate of economic growth. More
particularly, the principal determinant of economic growth is the
aggregate level of business investment in productive capacity.
The flow of transfer payments which would likely occur following
further CFC regulation (as described earlier) would create a
demand bias that would have the effect of reducing funds
available for business investment.
b) On the microeconomic level, a firm's ability to grow
is determined principally by its profitability. CFC user, and
probably also producer, profitability could be adversely impacted
by CFC regulation. With the very large number of firms involved,
the impact on overall economic growth could potentially be fairly
large.
c) Small business considerations are pertinent as well.
In most CFC user industries, small businesses predominate. For
these firms, the more appropriate consideration may not be their
continued ability to grow but rather their survivability. A
characteristic of such firms is a general inability to withstand
significant adverse changes in their cost structure, capital
requirements, or final demand. Under the economic scenario of
further CFC regulation developed thus far, it is apparent many of
these firms would be hard pressed to survive. Obviously, this
downside possibility involves negative consequence not limited to
the economic arena.
5. Employment
Continuing to pursue these economic interrelationships,
we see that, since high inflation and low growth mean higher
unemployment, further CFC regulation can lead to an increase in
unemployment. Potential examples include the following:
VII-21
-------
Economic Considerations
Failure of small firms as a result of CFC regulation
would cause an uncompensated loss of jobs;
Many larger companies, whose survivability is not
the issue, might nevertheless face the necessity to
close down plants. Since many of these plants are
located in small towns and are a significant factor
in the local economy, ripple job loss effects might
also be a prospect.
Rand notes:
"Plant closures are an extreme manifestation of a more
general consequence of regulation. Fixed investments
have been made in the past in equipment, structures, and
human skills that cannot be easily adapted to the new
regulatory environment. Under regulation, these
investments are devalued. In the extreme case, a plant
is closed down, some if its equipment might be sold, but
the rest is scrapped. Workers are laid off, and while
they eventually find other jobs, they cannot use certain
skills specific to their earlier employment. But even
if a plant does not close, returns to fixed capital,
both physical and human, are less under regulation than
had been anticipated when the investments were made."
[Rand, 1980, p. 235].
6. CFC Substitutes
In assessing potential economic impacts of CFC
regulation via a production cap, a critical area is the avail-
ability and cost of functional substitutes for CFCs. In
particular, if safe, cost effective substitutes were generally
available and overall CFC demand were not growing, CFC emissions
could be capped and probably also reduced at some reasonable pace
over time without the grave economic consequences described
above.
As indicated earlier, CFCs have always sold at a price
which is significantly less than value-in-use. This is basically
VII-22
-------
Economic Considerations
the result of the interaction of two factors: (1) from an
end-use standpoint, CFCs represent a unique and highly desirable
combination of physical and chemical properties, including high
energy efficiency, low toxicity and low chemical reactivity; and
(2) from a production viewpoint, manufacturing processes are not.
particularly complex, necessary raw materials have been
available, and it has been possible to expand CFC production
capacity at a rate necessary to support demand growth, all of
which have contributed .to the business being highly competitive
at the producer level. One of the consequences of this is that
the process of developing functional substitutes for CFCs is in
its infancy, simply because there has been no economic incentive
to pursue it prior to the threat of CFC regulation. Accordingly,
across all the important applications of CFCs, end users face
relatively unattractive options were CFC availability to be
restricted:
Less satisfactory (safety, performance, value) but
available functional substitutes;
Large investments in new plants; retooling of
production lines; redesign of products to avoid or
reduce CFC use; or
Investment in development of a new product or
process to replace CFCs.
Which option a particular end user chooses is largely an economic
decision but one importantly influenced by several qualitative
factors, such as legal restrictions, safety, environmental
concerns, confidence in new technology, lead time necessary to
implement major investment decisions, and risk of failure. In
the end, the typical end user would probably face a rather narrow
range of options to CFCs, and the narrower the range, the more
VII-23
-------
-conomic Considerations
likely the options would involve significant cost and consequent
adverse economic impact.
Section II, on CFC uses and essentiality, reviews in
detail the lack, or limitations, of currently available
substitutes for CFCs in their major end uses. And in Section
VIII and Appendix B we cover in detail the process of seeking and
developing commercially suitable new substitutes for CFCs the
pitfalls, risks, long lead times and status of these efforts.
However, for perspective, this section will review one specific
example of the process of developing a suitable alternative with
which Du Pont is familiar the search for an alternative for
auto air-conditioning. This is included here to provide a feel
for the magnitude of the job involved and the economic
consequences, and because we believe the realities presented
herein for this one CFC application are fairly typical for CFC
uses in general.
Approximately 100 million pounds of CFC-12 are consumed
annually in the auto air-conditioning market (original equipment
and after market). This is considered a significant CFC emission
source by EPA and one, therefore, that presumably would be
impacted by future regulations. Ever since the potential for CFC
regulation became apparent, the auto companies have expended
considerable effort looking at options to current systems charged
with CFC-12. Du Pont, for its part, has mounted a significant
effort, involving many technical man years, looking for an
alternative to CFC-12 in auto air-conditioning. The current
status of this -effort is as follows:
After screening hundreds of compounds, Du Pont has
identified only one candidate refrigerant substitute for
CFC-12 FC-134a which appears to have physical and
chemical properties that would permit it to substitute
for CFC-12 without major equipment modifications.
VII-24
-------
Economic Considerations
However, the chemistry of this compound is significantly
more complex than that of CFC-12, such that we have not
yet been able to demonstrate a process for commercial
scale manufacture, nor do we feel we are particularly
close to such a breakthrough. Moreover, were this
breakthrough to come, it would then still require
perhaps 6-10 years before commercial production could
begin, considering the lead times for toxicology (2-3
years), bench scale and pilot plant work (1-2 years),
design (1 year) and plant construction (2-4 years) .
Finally, even assuming FC-134a could successfully
be brought to market, its price would probably have to
4
be initially in the $10-$20 per pound range (1980
dollars). Such a high price would be necessary to
justify: (1) the high development cost, (2) the high
construction cost for a new manufacturing facility
(especially given the high cost of money), (3) the risk
in proceeding (e.g., if CFC-12 were to be vindicated
from concerns over ozone depletion, it would continue to
be used and there then would be no market at all for a
high priced replacement); and to support profitable
operation at relatively low initial production rates.
This compares with a current price for CFC-12 of approximately
5$0.50 per pound.
A new manufacturing facility would be sized to provide adequate
production for demand many years into the future. However,
initial demand would come nowhere near filling this capacity for
two reasons: (1) it probably would take manufacturers several
years to phase out CFC-12 in their equipment lines and replace
it with FC-134a, and (2) the vast majority of demand for CFC-12
in the auto air-conditioning application is not in original
factory equipment but rather in the sector of industry which
services this equipment. And the reality here is that even when
all new auto air-conditioning systems begin to use FC-134a in a
given year, all automobiles manufactured in preceding years
would have to continue to use CFC-12. Thus, it could take 5-10
years before the demand for FC-134a reached a level which would
permit the operation of the new manufacturing facility at high
enough rates to bring the cost per pound down as a result of
economics of scale.
VII-25
-------
Economic Considerations
If a direct replacement for CFC-12 cannot be made
available, the auto companies indicate the development and
retooling costs associated with implementing an alternative
equipment design using CFC-22 (a less severe theoretical ozone
depletor) would be in the billions of dollars.
There is really no other long-range solution other than
limiting auto air-conditioning in general. EPA itself concludes
emission control has only minor potential in this end use.
As discussed more fully in Section VIII and Appendix B,
generally similar circumstances for other large volume CFC end
uses can be cited:
Solvents
Substitutes are environmentally suspect and also face
potentially stringent regulation.
A large investment in new equipment is required in
most instances when an alternate solvent is
introduced.
Blowing Agents
In insulation foams, there are no substitutes for
CFCs which can produce a foam with the same
insulating properties.
- Alternate blowing agents (methylene chloride and
pentane) in other applications involve environmental
or flammability concerns.
The recycle option requires capital expenditures.
VII-25
-------
Economic Considerations
Refrigeration
- There are no practical substitutes for CFCs in
important end uses.
Low toxicity and nonflammability are properties of CFCs
which have been key factors in their growth over time. CFC
regulation will, therefore, necessarily involve safety
trade-offs. In addition, a number of the compounds which have
been cited as potential CFC replacements in certain end uses are
themselves environmentally suspect. These factors raise some
very critical questions:
a. Is there the possibility that further CFC regulation
will, on balance, have a negative impact on the environment? We
quote from Rand:
"In some product areas - most notably flexible foams,
solvents, and sterilants - a significant opportunity for
reducing CFC emissions lies in substituting other
chemicals for CFCs. The alternative chemicals may
impose environmental or worker health hazards of their
own. In the absence of controls on the alternative
chemicals, policies that work well in reducing the ozone
depletion risk from CFCs will increase the risk of other
hazards." [Rand, 1980, p. 248].
b. As a regulatory option, is the economic incentives
approach likely to be more or less effective than command and
control options in minimizing overall environmental impacts?
Again, from Rand:
The safety and environmental limitations of currently available
substitutes for CFCs are discussed in detail in Section II.
VII-27
-------
Economic Considerations
"Although even mandatory controls will encourage some
firms to use chemical substitution to avoid costly
compliance with CFC regulations, the degree of chemical
substitution should be far greater under economic
incentives than under mandatory controls. To the extent
that the substituted chemicals are found to be hazardous
to worker health or the environment, this greater
substitution is a disadvantage of economic incentives
policies." [Rand, 1980, p. 18].
c. What happens if chemicals which EPA is counting on
as CFC substitutes are themselves regulated at some future date?
Rand offers two noteworthy conclusions on this point:
"Economic incentives rely more heavily on chemical
substitution because that is less costly in many cases
than alternative means of CFC emissions control. Under
any policy strategy, the attempt to control substitute
chemicals will make the policy less effective in
reducing CFC emissions than the estimates given in this
study, which assumes no other changes in regulatory
controls for non-CFC chemicals." [Rand, 1980, p. 248].
"The estimates of emissions reductions and compliance
costs presume that no regulatory restrictions will be
placed on chemicals that might be substituted for CFCs.
The effects of this presumption are not trivial."
[Rand, 1980, p. 12].
It is clear from the above that any regulatory initiative which
necessarily relies on substitution (as does the economic
incentives option) must be analyzed carefully opposite the cost
and risk from using substitutes and the future availability of
the substitutes. We note that the ANPR makes no statements in
this regard.
The question of risk from regulation and the need for risk-risk
comparisons is taken up in Section V.
VII-2-
-------
Economic Considerations
7. Energy
It becomes apparent when considering the important CFC
end uses that CFCs gain a significant portion of their current
value-in-use due to their energy efficiency. CFC solvent
systems are preferred to other systems in certain end uses
because the lower boiling point of CFCs means less energy
consumption. In the insulation market, foam insulation materials
blown with CFCs have the lowest K factor (a measure of relative
insulating ability) of any available insulation material, and
this is due to the inherent insulating properties of CFCs
retained in the foam. CFCs also are the heat transfer medium in
heat pumps, considered to have, important potential for greater
energy efficiency in residential applications.
Three emerging end uses for CFCs (1) use of CFCs as
heat transfer fluid in solar energy applications, (2) use of CFCs
as the blowing agent in structural foams, and (3) use of CFCs in
the beneficiation of coal derive their potential from the
nation's desire to reduce its dependence on imported oil.
1) In the solar energy application, CFC systems have been
shown to represent the best combinations of energy efficiency,
thermal stability and operating reliability among available
systems.
2) Structural foams blown with CFCs provide molded parts
with high strength with a low plastic resin requirement,
resulting in a significant reduction in weight. Uses include
automobiles and aircraft and other applications where weight
reduction to save energy is an important consideration.
o
A more detailed discussion of the energy efficiency consequences
of CFC regulation appears in Section II-K and Appendix C.
VII-29
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Economic Considerations
3) In the coal application, a process using CFCs to remove
nonburning matrix and sulfur has been commercially
demonstrated.
Growth of solar energy, structural plastic foams and
coal beneficiation would contribute importantly to solving the
nation's energy problems. Such growth would obviously be greatly
restricted by a CFC production cap. There are other potential
energy savings developments only beginning to be explored which
would likely require CFCs, for example, waste heat recovery and
geothermal applications. These also would be hurt by a res-
tricted availability of CFCs.
e
It is worth noting that certain government actions in
other areas relating to energy run totally counter to EPA's
regulatory thrust on CFCs. Specifically, in the Department of
Energy's recent energy efficiency requirement proposals [DOE,
1980] certain standards provide for an increase in CFC use due to
their energy efficiency.
8. Financial Markets
Among the several options to control CFC emissions cited
by EPA recovery equipment, redesign and replacement of
existing production equipment, and alternate product designs
most would force CFC end users to make new capital investments.
Over time, these regulation - mandated expenditures
could become significant in the aggregate which could negatively
impact the nation's financial markets. In recent years, these
markets have been extremely volatile; interest rates have reached
unprecedented levels, particularly in long-term markets.
Pressures on financial markets will probably continue largely
unabated based on our continued high inflation rate, high level
VII-30
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Economic Considerations
of government spending and capital expenditures by business
necessitated by environmental and other regulations. With this
scenario in prospect, is it appropriate through such measures as
CFC regulation to add to the burden on financial markets?
9. Impact of Uncertainty
Perhaps even more important than any of the economic
issues addressed thus far, is the impact of uncertainty. In
particular, it is the key to reconciling EPA's position that its
proposed production cap on CFCs can be accommodated without
significant economic penalty and the view of others, shared by
us, that such a production cap would create severe economic
hardships. We and EPA do not disagree on the direction of future
events following imposition of a production cap on CFCs, i.e.,
higher CFC prices and lower CFC consumption through non-market
restraints on demand. The area of disagreement is the magnitude
of the impacts once events run their course. EPA would argue
that, by merely capping CFC production at current levels, the gap
between permissible supply and demand would be sufficiently small
initially, and would grow each year in sufficiently modest
increments, that readily available options to reduce CFC
consumption could cover these gaps at manageable cost, from both
the macro-and microeconomic viewpoint. EPA would also argue that
this same process could accommodate, not only control of CFC
growth, but also subsequent reductions in CFC consumption from
base period levels. The precise target EPA has in mind for
eventual CFC use reductions has been stated as 50-70% from base
period levels [Jellinek, 1980a].
Here is where the uncertainty issue comes to play,
specifically in the context of its role in business planning.
Business at all levels must manage its affairs with a view toward
the long-term because the most critical decisions it makes are
investment decisions (those involving capital outlays for plants
VII-31
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Economic Considerations
and equipment) where the wisdom of today's choice cannot properly
be judged until many years in the future.
Recognizing this, business relies heavily on the process
of long-range planning to develop perspectives on the possible
direction of future events, the likely impact of these events on
the firm and the actions required to either avoid problems or
capitalize on opportunities. Essentially, it is a process of
adapting to uncertainty; the hoped for end result is a reduction
in uncertainty to manageable levels as a basis for prudent
investment and other decisions. One characteristic of this
process is particularly pertinent to this discussion. Since
business is fundamentally risk adverse, a potential future event
which would have a significant impact on a firm (particularly if
it were negative) would dominate that firm's long-range plans.
Moreover, the higher the probability of the future event, the
more impact on the firm's strategic thinking.
What impact, then, would EPA's proposed CFG production
cap have on an affected firm? Two perceptions would quickly be
formed in the course of developing plans:
In practice, the functioning of the cap mechanism
(with its permit system and reliance on bidding wars
to determine who gets CFCs, in what quantity and
over what time period) would be highly unpredict-
able, and
There would be a fairly high probability mandated
reductions in CFC use over time would be sufficient-
ly large to significantly impact all end users,
regardless of essentiality and lack of substitutes
arguments, but the timing and stepwise incidence of
such reductions could not now be predicted.
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Economic Considerations
In shorty tremendous uncertainty would be created. How
would a firm respond? We believe that the prudent firm,
attempting to maintain its health over the long-term, would have
no choice but to adopt an "assume the worst" posture. In other
words, since (1) the potential long-term impact of the cap is
severe opposite the way the firm does business today, and (2)
perhaps a ten-year lead time is involved for the firm to attempt
to make the kinds of changes necessary to avoid those severe
impacts, the firm would be forced (to ensure its long-range
viability) to project the longer-term EPA 50-70% use reduction
scenario back to today's decision processes. In short, firms
would act as though CFCs have been essentially banned, not just
capped. Rand expresses general agreement with this view:
"In contrast, firms may perceive tax rates or quota
levels as highly variable, subject to regulatory whim or
political manipulation. If so, firms might be reluctant
to undertake long-term investments that would reduce
emissions for fear that future regulatory action would
make the investment obsolete or reduce its cost-
effectiveness." [Rand, 1980, p. 242].
The uncertainty issue cuts deeper, however. For
example, how would public policy deal with the following kinds of
situations?
CFC user firms who have no current alternatives to
CFCs would want to take steps to ensure CFC supply
over very long periods of time and at levels which
permit growth. Since a very large volume of current
CFC uses falls in this category, the effect on CFC
prices would greatly exceed anything EPA is
currently anticipating.
CFC user firms who take a gamble on new investments
to alter CFC use patterns, and guess wrong as to how
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Economic Considerations
regulation finally affects the business, would
probably, in most cases, face the survival question.
Firms who have capability to do development work
that might eventually produce CFC substitutes or
alternate downstream products that do not require
CFCs would have difficulty justifying the project
from the economic viewpoint because of the
uncertainties as to payoff.
To sum up, EPA's posture that CFC regulation can be
approached one step at a time at a measured pace is unworkable in
practice. In particular, EPA's first intended regulatory step
the production cap will have the capability to create severe
and immediate economic consequences, whether or not further CFC
use restrictions are implemented. In other words, once the
process is started, it may be difficult to alter its course even
if this is desired. Major interruption of long-term business
plans in mid-course would be simply chaotic from the economic
viewpoint. Moreover, the so-called "protected" CFC end uses
(those that are essential and without available substitutes),
would not be immune from the impact. In fact, it can be argued
that because there are no alternative options for these uses, the
impact of uncertainty over the future would hit firms in these
businesses the hardest.
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Economic Considerations
D. CFC REGULATION VIA COMMAND AND CONTROL TECHNIQUES
Command and control regulatory approaches could achieve
reduction of CFC emissions in several ways:
CFC product bans,
CFC use bans or limits,
Mandated minimum technology standards, and/or
Mandated emission reduction techniques.
Considering the number of affected CFCs, their wide
range of end uses, the several command and control options cited
above, and the fact that given options affect different firms in
the same industry in different ways, we agree with EPA that
regulating CFCs in this manner would be complex. However, as
noted in section C, regulation of CFCs by economic incentives
options also would be extremely complex and, unlike command and
control options, very little is yet known on how the economic
incentives options would work in practice or the probable con-
sequences. Therefore, we believe that command and control op-
tions must be explored in much greater depth as a viable regula-
tory strategy.
EPA sets forth reasonably well in the ANPR questions
that need to be answered to develop command and control
regulatory options that reasonably balance economic consequences
with CFC emission reduction goals. Unfortunately, few, if any,
of these questions have yet been answered to any sort of
definitive degree. The applicable studies in hand [Rand, 1980;
NAS, 1979d] are seriously deficient in this regard. In-depth
study is required to fill the information and analysis gap. The
fact that EPA prematurely has identified a preferred regulatory
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Economic Considerations
option other than command and control does not excuse EPA from
the responsibility to proceed with rigorous analysis of all
relevant options, including command and control. In fact, it is
arguable whether EPA will have met its legal obligations were it
to continue to advance a regulatory option without adequately
evaluating competing options (See Section III - Legal
Considerations).
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Economic Considerations
E. INADEQUACY OF RAND REPORT TO SUPPORT A REGULATORY DECISION9
1. Introduction
On balance, the Rand [1980] Report is a useful start on
the difficult task of assessing the implications of some of the
key potential regulatory options which could be applied to CFCs.
However, there are a number of serious omissions and deficiencies
which must be addressed prior to making a regulatory decision
based on the report findings.
The study is flawed opposite the use to which it is
being put by EPA because it: (1) is based on an obsolete data
base, (2) does not adequately examine all CFCs being proposed for
regulation by EPA, (3) does not adequately assess all uses of
CFCs which would be impacted by EPA's proposals, and (4) only
compares regulatory options under artificial time and technical
feasibility study parameters. However, most importantly, the
study is an empirical comparison of regulatory options under
study bounds selected by the authors, not an economic impact
study of the consequences of these options were they to be
applied to the real world of CFCs (all CFC products, all CFC
uses). The fault is not Rand's but rather EPA's for attempting
to justify a regulatory decision on the basis of a report not
designed for this purpose. A couple of examples are illus-
trative:
9
A more detailed commentary on economic incentives options as
treated by Rand (and by EPA in the ANPR) appears as Appendix I.
A companion product is Du Pont's March, 1980 submission to EPA
[Du Pont, 1980c] which critiqued the Rand Draft Report made
available to industry for comment. We note that only a few of
our comments and none of the major concerns raised in the
critique have been addressed in the final report now being used
by EPA. Therefore, we attach our full critique as part of this
submission.
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Economic Considerations
a) EPA [Jellinek, 1980c] states its preference for economic
incentives options on the basis that these will be less
burdensome than traditional command and control options
for a given level of emisssions reduction. EPA cites
[Inside EPA, 1930] for this purpose Rand's estimate of
real resource costs for a no-growth-in-emissions
regulatory policy of $270-600 million for a ten year
period. EPA has used these numbers out of context.
Rand's estimates were based on only a partial
control of CFC production. EPA has used the numbers
in the context of total CFC production. Rand
examined the cost of control opposite the
artificially selected base which covered only 310
million pounds of CFC use [Rand, 1980, p. 35]. The
1900 level which EPA proposes to control is in
excess of 300 million pounds (See Appendix J).
Further, Rand's base case did not include CFC-22 as
evidenced by the following quote:
"Therefore, we have not treated CFC-22 as a
principle ozone hazard, and home and supermarket
air-conditining systems are not included in the list
of analyzed products." [Rand, 1980, p. 3],
Yet, the proposed controls in the ANPR include
CFC-22.
Further, Rand only estimated the cost between 1930
and 1990. In reality, costs would continue to mount
for every year after regulation.
Another point is that the $270-600 million estimate
is only for compliance cost. As we shall see,
economic incentive options have associated with them
VII-3-
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Economic Considerations
costs called transfer payments, which are in
economic incentives options have associated with
them costs called transfer payments, which are in
addition to, and well in excess of, the compliance
costs.
b. EPA's statements on the cost efficiency of economic
incentives options generally have focused on compliance
cost and glossed over the much larger economic impact of
transfer payments [Inside EPA, 1980], although in the
ANPR it was acknowledged that "The Rand Corporation
estimates that total transfer payments will eventually
exceed $2 billion."
In reality, the Rand Report concluded that for its
"benchmark" emissions reduction case (a reduction in
emissions by 1990 of only about 12 percent from the
no regulation case [Rand, 1980, p. 21S] transfer
payments would run $1.5-1.7 billion [Rand, 1980, p.
281]. However, as stated above, this was based on a
study base of 310 million pounds in 1976, not the
800 million actual pounds used in 1980; and CFC-22
was not included.
A more important point, however, is that EPA's ANPR
proposal is not for this benchmark level of emis-
sions reduction but rather for a ceiling at current
levels. Rand terms this zero growth case as "strin-
gent" and concludes that transfer payments just for
the period 1980-1990 would be up to $6.2 billion
[Rand, 1980, p. 230], again based on only the par-
tial piece of the CFC market examined. Factoring
all CFCs and uses in would put this number at
approximately $16 billion. The statement by EPA in
the ANPR that transfer payments "...will eventually
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Economic Considerations
exceed $2 billion" grossly understates the economic
consequences of the proposed regulation and, at a
minimum, shows a poor understanding of the basis for
the numbers developed in the Rand Report.
The underlying reality is that due to the selected
bounds of the study performed by Rand (bounds which limited its
analysis to less than half of the current actual CFC market) any
citation of cost projections from the report must be strictly
qualified. The Rand study was an empirical exercise, not an
economic impact study of EPA's proposed production cap.
2. Data Base
The Rand study had three objectives:
a. To update and extend data on CFC use and emissions.
b. To analyze the economic properties of various tech-
nologies and procedures by which industry might be
able to reduce CFC emissions, and
c. To assess the economic implications of alternative
regulatory strategies.
Each objective depended upon information generated in
the previous objectives and was subject to the inherent quali-
fications and limitations of each previous step. This point
cannot be stressed too strongly. Readers may focus on the
findings or conclusions from the assessment of the various
regulatory strategies while neglecting the proper qualifications
and reservations necessitated by the limitations in the under-
lying technical and economic data bases.
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Economic Considerations
Therefore, the logical starting point for a critique of
the report would be evaluation of the data bases (for accuracy
and completeness), followed by an effort to improve these where
possible. Unfortunately, this task is made very difficult and in
some cases impossible due to lack of publication of the final
data bases employed.
It is unfortunate the final report is not organized as
described by EPA at the inception of the study. As an example,
in an interview with the EPA project officer for the Rand study
it was stated:
"The idea here is to produce a consistent set of data
which everyone views as reasonable." "...the other idea
is to allow anyone to use precisely the same data we
used to reach conclusions." [Mader, 1978].
Rand did produce draft data books which were sent to industry for
comment. Reviews were made and comments were returned to Rand
and to EPA. But final data books reflecting the draft comments
have not been finalized and published for "anyone to use". Fur-
ther, the draft data books dealt almost exclusively with
emissions profiles and the technological aspects of CFC use, not
with the economics, e.g., demand functions.
Consequently, our critique of the Rand Report is
necessarily limited. In those areas where the data appears in
the body of the report, it has been reviewed and comments appear
in our critique [Du Pont, 1980c] (attached). In those areas
where the raw data are aggregated or not reproduced in the
report, our comments center on the analytical assumptions made
and the limitations on the use of the findings.
One of the key limitations in not having ready access to
the full data base is that in a number of cases where we disagree
with Rand's conclusions, it is not clear whether the source of
VII-41
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Economic Considerations
disagreement is the basic data or the reasoning leading to the
conclusions. It is hoped that the final data on use and
emissions as well as the details of the economic analysis, will
be made available in the future for full examination and commentf
as originally planned.
The authors identify major data deficiencies and in a
number of instances recommend the need and direction for further
work. As a consequence of these data deficiencies, the Rand
researchers had to make a number of assumptions concerning use
and emissions' data, and the technological feasibility and
economics of alternatives and emission control. Therefore, we
provide comments on these assumptions, and discuss the
limitations which must be assigned to the assessments performed
in the report as a consequence of the assumptions employed. As
Rand itself states:
"The methods and assumptions [used in the impact
analyses] deserve close scrutiny because they influence
the outcome of analyses presented in later sections [of
the Rand Report]." [Rand, 1980, p. 22].
In many instances, not only is the data not available but the
specific logic or reasoning leading to the conclusions is
missing. It often is not clear to what extent conclusions are
reached from hard facts and clear understanding of the uses and
users, versus speculation or estimation. The development of
the CFC use and price combinations is particularly bothersome.
Rand states that the demand schedules represent their "point
estimates" of use versus price but neither the data base nor
the estimation process is reported.
VII-42
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Economic Considerations
3. Study Assumptions
a. No Regulatory Restriction of Alternatives
In the report introduction, Rand states:
"The estimates of emissions reductions and compli-
ance costs presume that there will be no regulatory
restrictions on chemicals that might be substituted
for CFCs. The effects of this presumption are not
trivial. [Rand, 1980,, p. 12].
Not only are the effects not trivial, but this assumption is
unrealistic. Many of the potential substitute chemicals already
are under regulatory control due to concern over their
photochemical reactivity (e.g., perchloroethylene, trichloro-
ethylene and pentane); some are already under regulation for
flammability (e.g., pentane and other hydrocarbons); a number of
the key substitutes are burdened with unresolved toxicity
questions (e.g., methylene chloride and trichloroethylene);
several are likely to be impacted by water quality controls; and
some are also implicated in stratospheric ozone depletion (methyl
chloroform). A move to CFC substitutes, which already are
regulated or may be regulated in the future, would increase the
cost of regulation beyond Rand's estimates, because these
estimates were developed under the assumption such substitution
would be a regulatory "free ride" (See section C-5).
b. Discount Rates
Rand assumes future compliance costs of CFC regulations
should be discounted back to 1980 at 11 percent per year. It was
stated that this rate was used by Rand for consistency with cost-
benefit analyses being conducted for EPA by the University of
Maryland [Bailey, 1980, p.38; Bailey, 1979]. We believe that if
future compliance costs are discounted back to current dollars at
a certain rate, then the quantifiable future benefits of any
/
VII-43
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Economic Considerations
proposed regulation should be at the same rate. We are not
prepared to argue for or against any specific discount rate, but
feel strongly that the one used, implicity or explicitly, should
apply equally to both sides of the cost-benefit equation.
c. Time Delay of Emissions
Rand makes the assumption that:
"The ultimate effect on the ozone layer is
essentially the same for a given cumulative emis-
sions level, regardless of whether the emissions
occur in a brief burst or over a period as long as a
decade." [Rand, 1980, p. 32].
The statement is true for the ultimate potential effect but needs
to be put into perspective. The key to this assumption is the
parameter of "a period as long as a decade." A decade seems to
have been chosen to fit the arbitrarily selected boundary for the
comparative effects analyses (1930 to 1990) . But the banking
characteristics of some of the uses, especially insulating foam,
result in the emissions occurring over 50 to 75 or more years,
not over a decade. In those instances, assuming other emissions
reductions were mandated, the effect would be to draw out the
emissions profile.over sufficient time that the ultimate poten-
tial depletion would not be as great, due to the self-healing
nature of the ozone layer.
d. Transfer Payaments Not Inflationary
Rand argues that tax or permit payments to government by
industry are simply transfers of wealth within the economy and,
as such, are unlike regulatory compliance costs which reflect
increased use of real resources to avoid CFC emissions. And
since such payments do not use up real resources and are
eventually returned (in some unspecified fashion) to the economy,
they do not directly contribute to inflation. We suggest this is
VII-44
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Economic Considerations
an overly fine distinction. This point was discussed in section
C-3 so will not be repeated here.
e. Scope of Economic Incentives Regulatory Options
Rand's quantitative analyses of the economic incentives
policy designs assume all applications of CFCs would be subject
to the policy. Justifications offered for this feature are that:
i) overall economic efficiency would be promoted by encouraging
pursuit of the least costly combination of emissions-reducing
activities, and ii) it would be less costly to administer. Yet
on a more detailed examination, such a policy would have built-in
inefficiencies to the extent that certain uses of CFCs (uses
where no alternatives are available and little or no emission
reduction is possible in the foreseeable future) would be
increased in cost but without any meaningful associated CFC
reduction. This is not a small concern. Note the findings of
Rand:
"The non-aerosol CFC applications that do not appear to
have technical options currently -- of which foam
insulation and refrigeration products are the largest
account for the largest fraction of projected CFC use
over the next decade." (emphasis added) [Rand, 1980,
p. 236] .
Thus, under EPA's proposal, the largest fraction of projected CFC
use has no technical options, yet would be required to pay the
higher prices generated by the production cap. This would be a
clear case of regulation with no benefit, but high cost.
f. Legal Concerns
It is assumed by Rand that the potential for collusion
among firms or predatory behavior in the permit marketplace would
not be a concern because neither activity would reduce the
emissions-reducing potential of a permit policy. Nevertheless,
VII-4!
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Economic Considerations
this must be examined carefully because of the potential for
anticompetitive effects from a marketable permit system such as
presented by Rand and proposed by EPA. The procompeti tive
policies of the antitrust laws are important national objectives
that cannot reasonably be ignored by EPA. The potential impact
of the proposed permit systems could be contrary to the policy of
the antitrust laws. (For detailed comments on legal points, see
Section III).
4. Limitations on Use of Report Findings
a. Introduction
The following quotations from the Rand Report taken
together illustrate why we have very serious reservations over
use of the report findings by EPA to support a decision that
economic incentives options are the preferred regulatory option:
"First, in several of the applications where CFC
demand is inelastic by assumption (e.g., LFF,
sterilants, mobile air-conditioning) , options for
reducing emissions have been identified but are not
reflected in the CFC demand schedules solely because
of the lack of cost data." (emphasis added) [Rand,
1930, p. 227].
"Of course, without more data about CFC demand
schedules in these applications, we cannot predict
the precise magnitude of transfer payments per
application."(emphasis added). [Rand, 1980, p. 230],
"Although the response of these product areas to
economic incentives obviously cannot be predicted
precisely with available information, these appli-
cations well might contribute to emissions
reductions under an economic incentive policy,
especially one as stringent as the zero-growth
scenario." (emphasis added) [Rand, 1980, p. 227],
"Without detailed information on individual plants
around the country, it is impossible to predict
where plant closures caused by transfer payments
might occur." (emphasis added) [Rand, 1980, p. 235],
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Economic Considerations
"Transfer payments can cause short-run economic
dislocations, both because the transfers might not
reenter the economy instantaneously and because some
human and physical capital is firm- or industry-
specific and fixed in the short-run. Like the
short-run phenomenon of rents, temporary dislo-
cations due to transfer payments are omitted from
this quantitative analysis of policy effects in this
study. (emphasis added) [Rand, 1980, p. 27].
"This design of a compensation approach is far
beyond the scope of this study." (emphasis added)
[Rand, 19SO, p. 236].
"Solvent substitution is not, of course, a panacea.
Other solvents appear to impose their own health and
environmental hazards, and require some increase in
energy utilization. The potential effectiveness and
the desirability of using policy to induce
substitution among solvents cannot be determined in
this study, and remain important issues for further
investigation by EPA. (emphasis added) [Rand,
19GO, p. 37].
Overall, it is clear that although the Rand study may
have been a good start on the assessment of the practicability
and cost of imposing economic incentives options, much additional
work needs to b,e done.
Detailed discussion follows on some of the major
limitations of the report'findings:
b. Analytical Conclusions Must be Extrapolated With
Care
The Rand comparative regulatory option analysis is based
upon the selection of a set of benchmark controls. Care must be
taken in extrapolating the conclusions reached from this bounded
analysis to the real world of CFC uses and regulatory policy
choices.
In the comparative analyses, Rand first selects a set of
"benchmark controls" (command and control steps) that they feel
VII-47
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Economic Considerations
could attain substantial emissions reductions by 1990, using
available technology, without undue economic impact, and which
could be readily enforced. Economic incentives regulatory
options are then set to attain an identical emissions reduction
goal and analyzed against the benchmark for efficiency and
economic impact. Rand concludes from their analyses that:
"If substantial emissions reductions beyond the limited
capabilities of mandatory controls are required, the
relevant policy choice appears to be between outright
bans on CFC use and economic incentives." [Rand, 1980,
p. vii] .
The validity of this finding is questionable the
weakness lying in the extrapolation of results from a tightly
bounded comparative analysis to the "real world" of CFC uses and
policy choices.
Although Rand's findings flow logically from the
analyses and seem valid in terms of comparing the regulatory
options within the parameters of the analyses, they would not
necessarily be valid were a different artificial or arbitrary set
of analytical parameters employed. What we are left with then is
a useful ordering and comparison of the pluses and minuses of the
options, within limiting boundaries, but not a study which fully
compares the potential impact of the regulatory options were they
to be imposed in the real world of CFC uses.
The scope of the selected benchmark controls necessarily
bound the comparative analyses. Therefore, it is crucial that
the set of controls selected for the benchmark regulatory option
be realistic, accurate and complete. This does not seem to be
the case from our perspective. Under the mix of benchmark
controls selected by Rand, total emission reduction potential
from a baseline case of no regulation is only about 12 percent.
Preliminary work at Du Pont indicates this may understate, by at
least a factor of three, the ultimate potential for emissions
VII-43
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Economic Considerations
reduction from a mix of technically feasible and enforceable
command and control regulations. Should this preliminary
estimate be confirmed, Rand's conclusion that the policy choice
is limited to outright bans and economic incentives in not valid.
Any regulatory recommendation made by EPA should be
based on what actually is possible or achieveable under various
options, not upon an arbitrarily bounded benchmark set of
controls. Consequently, a much broader comparative analysis
would seem to be required.
. c. Regulatory Cost Remains Uncertain
The cost advantage of incentives policies over direct
controls could be greater or smaller than estimated by Rand.
To determine the magnitude of costs imposed on firms by
CFC regulation, it is necessary to obtain: i) information on the
size of the market for goods whose production involves the use of
CFCs, ii) the relationship of the cost of using CFCs to the
finished product price, and iii) the production costs when
alternative technologies that rely less on CFCs are employed.
Due to the difficulty of obtaining this information, Rand relied
on engineering estimates to develop the scope of the cost of
possible substitutes for CFCs. The lack of good data and the
consequent use of this estimating method introduces considerable
uncertainty in estimating the costs of CFC regulation.
d. Criteria for Benchmark Controls Too Restrictive
In its selection of the benchmark control option, Rand
groups categories of potential command and control steps based on
the implications of using them. Then by imposing a number of
restrictions or boundaries, the benchmark set of controls is
selected. The selection requirements used are immediacy of
VII-49
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Economic Considerations
emission reduction, adequacy of technological and economic
information/ and enforceability. We feel the parameters of thg
requirements employed are arbitrary and artificial, leading to an
overly restrictive set of possible mandatory controls. Each
requirement is examined below:
i. Enforceability - Giving undue importance to the
question of perfect enforceability may well deprive
the rulemaker and the impacted industries of
imminently workable options options which could
contribute significantly toward the attainment of an
emissions reduction goal.
ii. Adequacy of Information - Rand excludes certain
potential control options from the benchmark set due
to the need for further assessment of their
technical feasibility and cost. This most often
occurs with the options requiring the use of
fluorocarbon alternatives. We agree that all of the
necessary answers are not yet available but this
does not seem to us to be a valid reason for
discounting the potential of these technical
options. It is understandable that adequate
information could not be assembled on all promising
control options given the time and dollar
constraints under which Rand had to operate.
Certain of these options were sufficiently new that
adequate data simply did not exist. However, it
does not seen defensible to select regulatory
options based on the present Rand findings, without
an effort being made to fill in the informational
deficiencies identified by Rand. These options have
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Economic Considerations
not been rejected as unworkable, only as lacking
sufficient information upon which to evaluate them.
An effort should be made to obtain the required
information.
iii. Immediacy of Emission Reduction - Another fault we
find with Rand's screening process is the criterion
that any control step selected for the benchmark
option must produce "immediate" emissions reduction,
i.e., the majority of the emission reduction gains
must begin to occur before 1990. The year 1990
apparently is selected as it is the limit of Rand's
data base emissions profiles and economic
projections. The difficulty of obtaining credible
projections well into the future is understood.
However, it does not seem unreasonable to demand the
long-term economic projections be performed. If one
is to address ozone depletion effects 30 to 100
years in the future, one should be equipped and
willing to address regulatory options, their
efficiencies and costs within the same time span
not to limit the analyses to 10 years.
Similarly, in dealing with a long-term potential
problem, it makes little sense to limit the
evaluation of solutions to those effective only in
the next 10 years. Due to the relatively long lead
times required to implement many of the more
promising control strategies identified, the real
effectiveness of these measures often will not occur
until after 1990. Arbitrary elimination of
longer-term control steps from the analyses results
in a severe understatement of the potential for
emission reduction command and control steps. There
is another problem with the requirement that
Vll-Iil
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Economic Considerations
solutions produce immediate payback. This is the
questionable regulatory efficiency (in pounds of
emissions reduced per dollar control expenditure)
under these restrictions. Were regulatory decisions
to be based only upon emission reduction achievable
by 1990, to the exclusion of potential ultimate
emission reduction, there is little question that
monies would not be spent efficiently. Increasingly
large expenditures would be required to achieve
incrementally small improvements by 1990, when less
expenditure on other projects could produce much
larger gains (although the effects would not be felt
until after 1990). The goal should be to reduce
total emissions over time relative to the perceived
environmental risk over time not to maximize
short-term solutions to a long-term potential
problem.
e. Designs of Economic Incentives Options Are Too General
The designs of the incentives options analyzed appear
more conceptual than workable. Although great care is taken by
Rand to describe and bound the benchmark control option, the
designs of the incentives options are much less specific. Many
potential problems associated with design, implementation,
administration and impacts of the options are identified, and in
some cases potential answers or solutions are offered and
evaluated. But a reader is not able to discern the exact
structure of an option, how it would work or what the effects
would be. Rand's approach is closer to a sensitivity analysis of
the various facets of incentives policies than an analysis of how
these options would be applied to CFCs. (For detailed
discussion, see Appendix I).
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Economic Considerations
f. Transfer Payment Concerns Not Resolved
Rand concludes that the question of transfer payments
may be the single most complex aspect of economic incentives
approaches. A number of political and economic issues which
should be addressed prior to implementation of these options are
identified. Although a number of potential solutions are
discussed, none are convincing. Uncoinpensated transfer payments
acknowledged as a real cost of doing business result in
greater regulatory costs than do mandatory controls. Compensa-
tion schemes are recommended as a means of reducing the
potentially large cost resulting from incentives options.
However, neither the potential benefits nor the beneficiaries of
compensation are clearly defined, and the real cost of some of
the compensation schemes may be underestimated. The lack of
resolution of this issue raises serious questions about the
utility of the report conclusions on economic incentives options
and EPA's stated preference for them. We note that EPA does not
offer any solutions to these problems in the ANPR, even though
many of these concerns were raised by us in our critique [^Djj
Pont, 1980c] of the Rand Draft Report.
We cite below representative statements in the Rand
Report on the impact and importance of this aspect of the
economic incentives options. Taken together, they indicate a
problem so large that we believe it is mandatory that workable
solutions be presented before EPA proceeds with a rule proposal
which is based on incentives options involving transfer payments.
"For the firms that pay them, transfer payments are
an expense that will be reflected in higher prices
to the consumer and a greater risk of plant closures
and worker unemployment. Because the transfers are
not a real resource cost, the negative effects on
firms that pay them will be offset by benefits to
the ultimate transfer recipients. Nevertheless,
transfers are a policy concern because wealth
redistribution and its effects on certain consumer
VII-53
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Economic Considerations
prices and on plant closures are politically
sensitive issues." [Rand, 1980, p. 18].
"Economic incentives would impose lower costs on the
economy as a whole, but could seriously injure CFC
user industries unless wealth transfers are
'compensated'." [Rand, 1980, p. vii].
"An uncompensated incentives policy design would
generate large transfer payments, ranging from a
discounted cumulative total of 1.5 billion dollars
for the benchmark-equivalent cost-minimizing design
to 6.2 billion dollars for the zero-growth design
based on cautious assumptions about the CFC demand
curves." [Rand, 1980, p. 230].
"Uncompensated economic incentive designs will
result in higher prices for final products made with
CFCs than will compensated designs or mandatory
controls. Under an uncompensated policy, firms and
their customers bear the full burden of the transfer
payments and total costs of production are higher.
Although prices elsewhere in the economy should fall
commensurately, in a trillion-dollar economy it
cannot be predicted in which individual industries
this effect will be noticeable. In short, the
burden of transfer payments will be readily
apparent, while the benefits might not be." [Rand,
1980, p. 234].
"However, uncompensated policies would generate
transfer payments many times as high as compliance
costs, and CFC-using firms would face total
regulatory costs much higher under such policies
than under mandatory controls. Consequently, there
is greater risk of plant closures under
uncompensated economic incentives policies." [Rand,
1980, p. 29].
"Devaluation of fixed capital occurs under any form
of regulation, whether mandatory controls or
economic incentives. However, the magnitude of
uncompensated transfer payments implies that the
wealth loss from capital devaluation in regulated
industries is much greater under uncompensated
economic policies than under other policy
approaches. For these reasons, most firms would
understandably prefer mandatory controls to
uncompensated economic incentives." [Rand, 1980, p.
235] .
VII-54
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Economic Considerations
"Despite the advantages of economic incentives for
reducing the real resource costs of regulation and
achieving substantial emissions reductions, the
adverse impa.cts on user industries from an
uncompensated incentives policy may not be
acceptable. If this is the case and substantial
emissions reductions are required to prevent serious
environmental damage, the achievement of regulatory
goals may rest on the ability to design a
compensated policy that does not distort incentives
for low-cost emissions reductions." [Rand, 1930, p.
239].
g. Inadequate Attention is Given to Market Structure
Effects of Regulatory Option Design
The Rand Report portrays taxation and marketable permits
as capable of producing broadly equivalent regulatory outcomes,
with the potential differences that do exist possibly creating a
slight preference for a permit system. But we believe a permit
system could lead to increased concentration of either producing
or using firms. And, as the efficiency of a permit system is
dependent on markets being purely competitive and not becoming
concentrated as a result of the permit system, failure to meet
these conditions could create two problems. First, the
compliance cost of attaining a designated reduction of CFC would
not necessarily be minimized under a permit system. Second, if
firms were to hoard permits, a permit system may not regulate
emissions to their optimal levels, i.e., a permit .system may
unavoidably lead to a greater reduction in the use of CFCs than
would be socially desirable. (For detailed discussion, see
Appendix I) .
5. Needed Further Work
a. Consider Mixed Regulatory Options
Rand only treats potential regulatory options in the
pure form: that is, combinations of strategies for different
VII-55
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Economic Considerations
end-uses or over time are not analyzed. A regulatory mix should
be considered. This could be done by analyzing options available
for each use on a cost-effectiveness basis. Such analyses should
include regulatory administrative costs as well as direct and
indirect compliance costs. Cost-effectiveness analyses also
should be used to evaluate stepwise introduction of regulatory
options over time in a manner consistent with the anticipated
increase in knowledge of the benefits of regulation (directly
related to knowledge of the degree of ozone depletion and its
effects).
b. Risk Trade-offs Needed
Many of the proposed and potential emission reduction
processes or alternative products which would be utilized in
response to incentive options have some degree of worker, con-
sumer or environmental risk associated with them. Obviously
these risks need to be weighed opposite the risk from continued
CFC use. Option impact studies need to consider these risks in
predictions of the likely response of industry to given incentive
levels. If the perceived risk from alternatives is high (and thij»
is not factored into the impact analyses), industry may not take
the anticipated steps to reduce CFC use at a given incentive
level thereby markedly increasing the forecast regulatory cost
and decreasing the forecast benefits.
c. Alternative Approach to Policy Evaluations
The main problem with the utility of Rand's findings is
that they are all based upon comparisons with an artifically
bounded base case of benchmark controls. The result is that
neither the incentive options nor the benchmark set of command
and control rules adequately encompasses the real world situation
in terms of total achievable emissions reductions from all uses^
and the associated costs. Consequently, the analyses do not
VII-56
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Economic Considerations
logically support a regulatory decision which would have to
address the effectiveness and costs of a regulatory recommen-
dation upon the total CFC market.
Unfortunately, no matter what set of benchmark controls
were selected for comparative regulatory analyses, separate
groups might critic! ?,'* the selection as overly or insufficiently
restrictive, not technically feasible or not enforceable. We
suggest a better approach would be for EPA to provide a series of
emission reduction goals, either in total pounds or as percentile
reductions from base line (no regulation) projections. Analyses
could then be performed to spell out specifically how these goals
could be attained under the different regulatory options or
option combinations under consideration, in what time frame and
at what cost.
In addition, we recommend that policy options be
evaluated opposite their potential impact on environmental risk,
not upon pounds of emissions. To facilitate such an evaluation,
we urge EPA to adopt ranking of compounds by their "ozone
depletion potential" (See Appendix G) . Having clone that, then
Rand's analyses and a.ll ensuing analyses must be done on the
basis of relative risk, not straightforward pounds of emissions.
d. Broaden Analyses
Barring such a revised methodology, an effort needs to
be undertaken to substantially expand the regulatory effects
analyses started by Rand.
i. Time Frame - Limiting the comparative analyses to
those options which would achieve significant
emissions reduction by 1990 is extremely
short-sighted. The limitation biases any regulatory
selection made on the basis of these short-term
VII-57
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Economic Considerations
solutions. We suspect that a bias to short-term
solutions will occur at the expense of steps which
could show greater emissions reductions at a lower
cost/pound over the long-term. The potential pro-
blem is a cumulative long-term (30-100 year)
problem. We fail to see any justification for
restricting potential solutions to the problem to
only those which would show "immediate" results.
ii. Technical Assessments - Rand identifies a number of
areas requiring further emissions or technical data
collection and assessment. Due to lack of technical
data on the potential for emission reduction and the
use of alternatives, a number of promising options
are eliminated from the set of benchmark mandatory
controls. We agree that all of the necessary
assessments are not yet available but this does not
seem to be a valid reason for discounting the
potential for so many promising technical options.
i ii. Design
Rand notes:
"The study identified compensation techniques that
can substantially mitigate the transfers of wealth
under an incentives policy. Such techniques promise
to be difficult to design and implement." [Rand,
1980, p. vi.] .
"Designing a compensation scheme that does not
distort the policy's incentives is not a simple
matter operationally." [Rand, 1980, p. 253].
Clearly an expanded analysis is needed on option
design implications, especially in the area of the
economic and political implications of uncompensated
versus compensated transfer payments - both the
costs and benefits.
' VII-58
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Economic Considerations
Other design questions needing work are:
Regulatory control point - production, use or
emissions?
The potential changes in market structure under a
marketable permit system.
Impact of uncertainty on choice of optimal design.
iv. Option Implementation and Administration
Rand notes:
"For economic incentives policies, the distributive
consequences depend critically on how the policy is
implemented." [Rand, 1980, p. 229].
"The magnitude of transfer payments depends on how
an economic incentives policy is implemented."
[Rand, 1980, p. 230].
"An incentives policy might seriously disrupt the
CFC-using industries, depending on the magnitude of
transfer payments; compensated economic incentives
could mitigate transfer, but may be quite difficult
to implement." [Rand, 1980, p. 255].
In addition, further attention needs to be given to
the following aspects of incentives options:
The public sector expense associated with the
development, implementation and enforcement of
incentives options.
Enforcement issues, especially if incentives options
become complex through inclusion of exemptions.
VII-59
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Economic Considerations
How to establish regulatory predictability. Thought
needs to be given to establishing a readily
understood decision formula for control adjustment
(e.g., level of taxes) and how to communicate
regulatory intent in advance (e.g., the future
permit level, where, how and when permits would be
available, etc.), so that industry may make plans
for emission reduction.
v. Legal Issues - Work is needed in a number of areas.
These are discussed in detail in Section III.
e. Expand and Add Detail to Economic Incentives Option
Structures
In Rand's treatment of economic incentives regulatory
options, the designs and implementations suggested are too
general to allow detailed impact analyses and position-taking by
industry. One can discuss the pluses and minuses of the concepts
but has difficulty in arriving at a defensible endorsement of the
options because important structural detail is lacking. One
could accept the principle but find the formulation and applica-
tion to be totally unsatisfactory. Consequently, there remains a
great need for EPA or its contractors to develop a detailed
explanation of exactly what these options would look like, how
they would be implemented and administered, and how payments
would be handled. Having surveyed the potential problems and
knowledge deficiencies, solutions now must be proposed.
We note that this comment was first made to EPA by us in
March, 1980 [Du Pont, 1930c]. Yet, the October, 1980 ANPR shows
no indication that any of this needed work has yet been per-
formed.
VII-60
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Economic Considerations
F. MISCELLANEOUS ANPR POINTS HAVING ECONOMIC IMPLICATIONS
Comments below relate to specific topics, points,
arguments, etc., contained in the ANPR where economic implica-
tions are pertinent. Those already covered in other sections
will only be highlighted here.
1. Choosing a Regulatory Strategy
EPA's thought process in approaching CFC regulation, as
reflected in the ANPR, appears to have been to: (1) choose a CFC
emisssions target based principally on its potential impact in
persuading the rest of the world to take action, and then, (2)
set about to determine how best to achieve this emissions target
considering the trade-offs (including economic) involved. Since
evolving public policy increasingly is placing as much emphasis
on "cost" as "benefit" in the cost/benefit regulatory equation,
it would seem EPA's process of choosing an initial CFC emissions
target should have included economic considerations at a much
earlier stage. Accordingly, it would be appropriate for EPA to
rethink its overall regulatory strategy based on this approach.
2. Cost/Benefit Analysis
Recent Administrations, the Congress and the regulatory
agencies themselves have strongly embraced the need for careful
cost/benefit analyses of proposed regulations to ensure that such
regulations will be in the broadest public interest. For any
regulatory proposal, this requires that the decision process
address two separate but related questions:
Does the proposed regulation achieve the stated
regulatory objective at the lowest cost?
VII-S1
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Economic Considerations
In structuring the regulatory objective (specifi-
cally, in determining the degree of control), are
expected benefits and costs equated at the margin?
(In other words, does regulation stop where the
incremental cost begins to exceed the incremental
benefit?)
Let us adddress these questions in the context of the
proposal to further regulate CFCs.
Least Costly Regulatory Approach
EPA's stated regulatory objective is to hold CFC
emissions from U.S. sources to current levels. EPA
further states it prefers the CFC production cap
route to accomplish this objective. But is this the
least costly regulatory option? In our view, it is
clear, on the basis of information and analyses now
available, that there is no justification to
conclude that a production cap is the most cost
effective means of further regulating CFCs. The
ANPR does not state a conclusion on this point, nor
does it even offer a comparison of the relative
costs of achieving the given regulatory objective in
alternate ways.
Equating Marginal Benefits and Marginal Costs
According to EPA, the benefit of the proposed
regulatory step is not CFC emissions reductions per
se but rather the potential to catalyze
international action leading toward CFC emissions
reduction. So, the real benefift of the proposed
production cap would be a function of how much
better a catalyst it is than some alternate action
VII-62
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Economic Considerations
or set of actions, with the latter not necessarily
being regulatory actions. But, what about the cost
of this "catalyst"? Our analysis above attempted to
deal with this question and, although the results
cannot be precisely quantified at this stage,
clearly the cost of a CFC production cap would be
very high in economic terms. In this light, it is
impossible to reconcile EPA's proposed CFC
production cap with conventional cost/benefit
methodology. The "benefit" is highly subjective and
theoretical, if it exists at all; but, the cost is
extremely high.
In view of the foregoing, we feel there is strong
justification to insist that EPA perform much more
substantive and rigorous cost/benefit analyses
before proceeding with further CFC regulation.
3. EPA's Long-Term Regulatory Intent
EPA states that the only acceptable long-term strategy
for CFCs is "substantial emissions reductions." However, no
consideration has been given to the economic impact of this
extreme control option. EPA relies heavily on the Rand Report
but its most extreme analysis was an option in which emissions
were held constant, notJ^substantially reduced from current
levels.
4. Product/End Use Bans
EPA places bans low on the priority list of regulatory
options, in part because of the potential for overcontrol of some
uses and the undercontrol of others. However, if EPA followed
the analytical approach it outlines to deal with product/end use
ban questions, the likelihood of overcontrolling or undercon-
VII-63
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Economic Considerations
trolling a particular end use through selective bans would be
greatly reduced.
Moreover, under the production cap proposal, a reverse
kind of situation is just as likely to eventuate truly
essential end uses, with no substitutes, might suffer severe
economic hardship while less essential end uses might not.
Determining factors would be the financial strength of the
,-tffected firms and the availability of suitable substitutes, but
not the question of product essentiality or equity.
5. Economic Incentives or Disincentives?
The economic options presented in the ANPR are not
incentive options. True incentive approaches would include items
such as tax credits to encourage investment in CFC recycle
equipment.
6. Tax or Surcharge on CFC Use
The Rand Report devoted considerable space to taxes as
an economic control option. A tax may avoid some of the
uncertainty associated with an allocation or auction system. EPA
may have prematurely seized on a permit system as the preferred
economic approach. Given the magnitude of what is at stake, we
believe all possible options should be explored.
7. Base Year
Choice of the base year for a proposed production cap
should recognize evolutions in the marketplace, swings in the
business cycle and .other structural factors. Using a formula
approach which combines several representative years might
accomplish this. One concept we feel EPA should explore is that
of choosing a base year which is out into the future, say 1985.
VII-64
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Economic Considerations
The production ceiling would be based on an estimate, absent
regulations, of how large the market would be at that time if
current demand trends continue. Since CFC use is only growing
moderately in the U.S., incremental contribution to world CFC
emissions would be small in relation to total emissions. The
benefit of this approach would be that it would reduce the
uncertainty facing business and allow firms time to adjust to CFC
use restrictions at a more measured pace, thus reducing potential
economic and societal impacts.
8. Term of Permits
Rand notes:
"The authorization interval and the mix of maturity
dates for outstanding permits should be chosen according
to two basic principles. First, the authorization
interval should be long enough to allow firms to buy and
sell permits as needed to insure that demand and supply
are equalized. Second, the interval should be long
enough and the mix of maturity dates should overlap
enough so that there are not major swings in the permit
price from one issue to the next because of short-term
fluctuations in demand." [Rand, 1980, p. 240].
Yet, EPA has not addressed at all in the ANPR the issue
of the term for permits.
We believe that orderly business functioning would
require that CFC permits, however obtained granted or auc-
tioned (to end users or producers) have a long life ideally
at least ten years so that investment decisions can be handled
on a rational basis. Otherwise, uncertainty would breed chaos
and, ultimately, significant economic dislocation. However, if
the duration of permits exceeds more than a couple of years,
legal implications appear to begin to override. Moreover, from
the economic viewpoint, inefficiencies due to lack of competition
could develop.
VII-65
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Economic Considerations
9. Direct Allocation of Permits to Manufacturers
This approach may be undesirable from an economic
viewpoint because some producers may not need to actively compete
with each other for business, and therefore, may have little
incentive to operate efficiently. This is so because the price
mechanism would not function in its typical manner to equilibrate
supply and demand. Moreover, this would be the case whether the
"transfer payments" flow to producers or the government.
Shortages could develop under this approach, and price
could not be relied upon to remove them. What happens to the
users who are shorted? Will the government then mandate, in
addition to the production cap, formal allocation schemes
(especially for those uses deemed to be "essential") in an
attempt to treat everyone equitably? How would such a program be
administered without a significant cost and without becoming
itself a major source of inequity? (For further discussion, see
Section Ill-Legal Issues).
10. Direct Allocation of Permits to Users
This approach would be unworkable in practice 'because
of the large number of firms involved, the many and varied CFC
end users and the dynamic technological and market situation
which operates here. Witness the tremendous administrative
problems, inequities, etc., with previous gasoline allocation
schemes which, in fact, are probably simpler to design and
implement because of the standardized product and single end use
characteristic.
As in the case of permit allocation to producers, this
approach could create economic inefficiences at the producer
VII-66
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Economic Considerations
level. This is so because under a system of allocation of per-
mits to users, some producers may not have an incentive to be
efficient; and others, reacting to the potential for extreme year
to year variation in production demand on them by the users,
could conclude that the associated uncertainties were suffi-
ciently great to undermine the incentive to remain in the CFC
production business.
11. Government Auction of Permits
a. The auction concept is nothing more than a rather
complicated way to impose a tax on CFC use. As an alternative,
EPA should explore more actively the more direct approach of an
excise tax on CFC use, which might be more equitable and simplier
to implement and administer.
b. As in any free market for a "paper" commodity,
speculators would become a major factor. Would EPA permit this?
If not, how would auction participation be monitored?
c. Future success/failure for users of CFCs will tend
to become highly dependent upon how they fare in this auction
process, regardless of the relative essentiality of their CFC
uses or the strength of their underlying competitive positions.
What steps would EPA plan to take to avoid the inequities that
might result, or to mitigate against the impact of such
inequities?
d. How will EPA deal with those situations, which
inevitably will come up, where essential end users of CFCs don't
get enough to cover their needs and this causes economic or other
hardships either to themselves or consumers? A mechanism to
handle this would need to be developed.
VII-67
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Economic Considerations
e. The open auction process would inevitably create
artificially high prices since there would be a significantly
higher perceived demand than actual demand if producers, end
users and others all participate. What steps would EPA take to
avoid this?
f. As time passes, the auction process would create a
significant flow of dollars to the government with very
significant potential implications from an economic growth and
inflation viewpoint. How would these payments be distributed?
Who should have jurisdiction in this process due to the potential
impact on the economy (Commerce), levels of employment (Labor),
financial markets (Treasury), etc.?
Rand found the issue of transfer payments to be of
paramount importance:
"Ultimately, the resolution of the implementation issues
raised by transfer payments may be one of the most
critical policy choices required by CFC destruction of
the ozone layer." [Rand, 1980, p. 239]
We concur.
VII-68
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Economic Considerations
G. SUMMARY
After examination of EPA's proposed regulatory options,
with particular attention to the Agency's stated preference for
economic incentives options, we conclude:
1. EPA drastically understates the potential adverse
economic consequences of its production cap proposal,
particularly the consequences of the large induced uncertainty
under such a system.
2. EPA's comments on the potential mechanics of a
production cap/production or use permit system demonstrate a lack
of appreciation of the complexities involved; as such, EPA
grossly underestimates the practical complications of operating
such a system.
3. The Rand Report [Rand, 1980] upon which EPA relies
heavily to justify its preference, is not adequate from the
economic viewpoint as a basis for a regulatory decision. The
study, while a useful empirical exercise, was not designed nor
performed as an economic impact study of the consequences of
economic incentives options.
4. In reaching its preference for a production cap, EPA has
not considered in sufficient depth command and control options,
true economic incentives approaches such as tax credits for CFC
recycle investments, or use of excise taxes as a demand dampening
technique.
5. A great deal more in-depth analysis in several areas is
required before a defensible conclusion can be reached that
economic incentives control options can be accomodated without
severe adverse economic consequences. Moreover, the burden of
V1I-5S
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Economic Considerations
proof should be on EPA since the Agency's proposals appear to
depart from conventional economic wisdom.
We find it particularly disturbing that EPA seems
already to have made up its mind, without benefit of in-depth
analyses, that a CFC production cap is the appropriate regulatory
method. In view of the potentially severe economic consequences,
EPA's position is not tenable. This becomes quite apparent when
we consider that EPA has barely scratched the surface in
assessing alternative options.
6. It is possible that EPA advances a production cap as its
regulatory preference for reasons other than the potential to
meet regulatory goals in the most cost-effective manner. In
particular, from a political viewpoint, the cap proposal seems to
offer EPA several advantages:
Unfocused opposition - the "you don't need to
worry; the cap will affect somebody else" argument;
A quick regulatory solution, without the necessity
to go through the rigorous analyses demanded by
command and control; and
Operation of the "new toy" theory, which tends to
attract supporters to the proposed regulation for
all the wrong reasons.
7. In all discussion of the need for CFC regulation, and
the pluses and minuses of the regulatory options, (whether
economic incentives or command and control), it must be
remembered that CFCs have a huge quality- of- life, economic and
employment significance to the United States:
VII-70
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Economic Considerations
a. CFCs perform a wide range of jobs considered
essential to today's way of life.
b. For many current uses there are no safe suitably
performiny alternatives available nor are there
likely to be in the foreseeable future.
c. About $500 million of CFCs are sold annually.
d. More than 730,000 jobs are related to CFC use.
e. There are approximately 260,000 domestic business
locations which use CFCs.
f. The annual value of goods and services which depend
to some extent upon CFCs exceeds $28 billion.
g. The value of installed products which use CFCs is
more than $135 billion.
Regulatory decisions on CFCs will effect major indus-
tries, many workers and the consumer through the wide array of
CFC-dependent products. Should regulation ultimately prove to be
necessary, great care will have to be taken to insure that the
regulatory option and the degree of control selected will be the
most cost-effective overall to society.
VII-71
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VIII. THE SEARCH FOR ALTERNATIVES
A. INTRODUCTION
B. CRITERIA FOR ALTERNATIVES
C. SCOPE OF PROGRAM
D. PROGRAM STATUS AND PLANS
E. TIMETABLE
F. SUMMARY
Paqe
VIII-1
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Alternatives
A. INTRODUCTION
From early in the controversy of whether continued use
of CFCs will lead to a depletion of stratospheric ozone, efforts
have been underway to develop acceptable replacement compounds
should their use be required. This effort in no way signals an
acceptance of the validity of the theory but rather just a
prudent and responsible decision to be prepared should the need
arise.
At Du Pont, this effort to date has cost over $15
million. Unfortunately, all promising compounds identified so
far have one or more limitations, such as possible toxicity, no
known commercially viable manufacturing process to make them, or,
as yet unspecified criteria for environmental acceptability
opposite the potential for ozone depletion. Consequently, we
feel that if fully satisfactory fluorocarbon alternatives are
available at all, they are a minimum of seven but more likely ten
years away.
Periodically, the status of Du Font's program has been
formally reported to EPA [Du Pont 1978; 1980d] and numerous
informal updates also have been made. Nevertheless, the Agency
routinely has issued statements of optimism on the results of our
work [e.g., DeKany, 1980] far in excess of what we believe the
facts can support. Consequently, we are including a section in
the submission on our alternatives program, its objectives,
parameters, status and future. More detailed discussion appears
in Appendix B.
B. CRITERIA FOR ALTERNATIVES
The ozone depletion theory predicts that certain
chlorine-containing, volatile compounds are sufficiently stable
VIII-2
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Search for
ATter natiVes
(or long-lived) in the lower atmosphere that significant amounts
survive to reach the stratosphere, where the chlorine is released
by ultraviolet radiation. It is theorized this chlorine may
deplete ozone. The amount of predicted ozone depletion is
calculated by computer "models" designed to simulate the
atmosphere.
The potential for this theoretical depletion of ozone
can be reduced or avoided in two ways. If a CFC molecule can be
made marginally less stable, most will not survive the journey to
the stratosphere. However, it must not be so unstable that it
contributes to smog, as does, for example, trichloroethylene.
Hydrogen-containing fl
desirable middle ground.
Hydrogen-containing fluorocarbons have a stability in this
Alternatively, fluorocarbons which do not contain
chlorine could be substituted for CFCs. Fluorine is not involved
in the ozone depletion mechanism.
Acceptable CFC substitutes also must meet other
criteria. An acceptable alternative must provide product
performance, low toxicity and safety-in-use. Cost must be
compatible with value-in-use, and an economic incentive for
manufacture must exist. Lastly, a commercial process for its
manufacture must exist or be developed.
For purposes of this discussion, compounds containing at least
one chlorine and one fluorine will be referred to as chloro-
fluorocarbons (CFCs) , whereas compounds containing no chlorine
will be referred to as fluorocarbons (FCs).
VIII-3
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Alternatives
C. SCOPE OF PROGRAM
As outlined in the previous section the most promising
candidates were identified early on as either fluorocarbons
containing no chlorine or as chlorofluorocarbons containing
hydrogen. This led to an examination of all practical
fluorocarbon and chlorofluorocarbon compounds meeting one or the
other of these criteria. Only fourteen compounds were found to
comprise this category:
CFC-21 (CHC12F)
CFC-22 (CHC1F2)
CFC-31 (CH2C1F)
FC-32 (CH2F2)
CFC-123 (C2HC12F3)
CFC-124 (C2HC1F4)
FC-125 (C2HFV
CFC-132b (C2H2C12F2)
CFC-133a (C2H2C1F3)
FC-134a (C2H2F4)
CFC-141b (C2H3C12F)
CFC-142b (C2H3C1F2)
FC-143a (C2H3F3)
FC-152a (C2H4F2)
These compounds have been or are being evaluated for
product performance (as refrigerants, foam blowing agents and
solvents), safety (flammability and toxicology) and manufacturing
capability. Only CFC-22, FC-134a, CFC-141b, CFC-142b and FC-152a
have survived all the tests performed to date. However, the
results of all long-term toxicology studies, which would be
VIII-4
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Search for
Alternatives
necessary before more broad use of these compounds would be
permitted, are not yet available. Only CFC-22 is a major
commercial product. CFC-142b and FC-152a are manufactured in
very limited quantities. The reasons for discontinuing work on
the other candidates are given in Section VIII - F.
D. PROGRAM STATUS AND PLANS
Du Font's research and development effort on alter-
natives is continuing.
The results of long-term toxicity studies on CFC-22,
FC-152a and CFC-142b are expected over the next two years. Field
tests of CFC-22 and CFC-142b in automotive air-conditioning are
underway. Limited testing of 'FC-134a in refrigeration and air-
conditioning equipment is ongoing. Basic data on equipment
modifications necessary in refrigeration and air-conditioning
equipment is under development. Methods to determine the
long-term insulating performance of alternatives in rigid
polyurethane foam are being developed. Although no processes yet
exist for the commercial production of FC-134a or CFC-141b,
process research is continuing.
E. TIMETABLE
Seven to ten years may be necessary to reach commercial
production for most alternatives, assuming all technical and
toxicological programs yield favorable results. Even with
existing production processes for CFC-22, CFC-142b and FC-152a,
new or expanded facilities would be needed for increased
production and for raw materials. The ten-year estimate includes
pilot plant construction and operation, long-term chronic
VIII-5
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Search for
Alternatives
toxicity testing, development of basic design data, acquisition
of a plant site, obtaining production equipment and environmental
permits, and plant construction and start-up.
An examination of the regulatory protocol and EPA's
priority for this issue suggests that regulations for nonpro-
pellant uses of CFCs could be promulgated in final form as soon
as 1981, and perhaps become effective a year later. The gap
between the regulatory timetable and the most optimistic .time-
table for the development of alternatives is a major source of
concern.
VIII-6
-------
F. Surcnary - Chlorof luorocarbon Alternatives
Number Formula Boiling Point, °F
48
-41
16
-61
82
12
r55
116
45
-16
CFC-21
CFC-22
CFC-31
FC-32
CFC-123
CFC-124
FC-125
CFC-132b
CHC12F
CHC1P2
CH2C1F
CH2F2 (a)
CHC12CF3
CHC1FCF3
CHF2CF3 (a)
CH2C1CC1F2
CFC-133a
FC-134a
CFC-141b
CFC-142b
FC-143a
FC-152a
CH2C1CF3
CH2FCF3 (a)
CH3CC1F2
CH3CF3 ta)
CH3CHF2
90
14
-54
(a) -13
Potential Application Flammable
Slewing Agent No
Refrigerant No
Propellant Yes
None (b) Yes
Blowing agent, refrigerant No
Refrigerant, other No
Refrigerant No
Cleaning agent - too No
aggressive (b)
Blowing agent, propellant No
Refrigerant, other No
Blowing agent Yes
Blowing agent, refrigerant Yes
Refrigerant Yes
Propellant, refrigerant Yes
Manufacturing
Process
Yes
Yes
NC
NC
No ft>)
No (b)
No (b)
No
NC(US)
No
Yes (d)
Yes
NC
Yes
Toxicology
Toxic (b)
Weak Mutagen (c)
Toxic (b)
Low
Low
Low
Not Known
Very Incomplete
Fjribryotoxic (b)
Very Inconplete
(testing in
progress)
Weak Mutagen
Weak Mutagen (c)
Incomplete
Low (c)
(a) Contains no chlorine.
(b) Work discontinued principally for this reason.
(c) Long-term toxicity test in progress.
(d) Developmental process only.
NC-Not Commercial.
NC(US)-Not Commercial in United States,
e
f
rt-
sl
w
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IX. CONCLUSIONS AND RECOMMENDATIONS
IX-1
Page
A. CONCLUSIONS
B. RECOMMENDATIONS 13
-------
Conclusions and Recommendations
A. CONCLUSIONS1
The discussions and conclusions in the preceding
Sections provide ample support for adoption of the "Assessment
and Surveillance" regulatory option, as outlined in the Introduc-
tion (Section I). Assessment and Surveillance is the only option
that assures that the theory will be more thoroughly researched
without unreasonable risk developing, while at the same time
avoiding the inefficiencies and severe economic impact of
unilateral over-regulation. The availability of ozone trend
analysis provides an early warning system, and insures that
prompt action can be taken if it becomes apparent that a problem
is developing. To date, ozone trend analysis has detected ru>
depletion of the ozone layer.
Specifically, we note that:
There are substantial uncertainties surrounding the
1979 ozone depletion calculations. Advances in the
science, made since those calculations, reduce the
calculated depletion by half or more. In the next
few years, it is expected that substantial progress
will be made toward resolving the remaining key
uncertainties. The research is already underway.
Importantly, it can be conducted under the umbrella
of ozone trend analysis.
Given the availability of ozone trend analysis (a
system to survey trends in ozone concentration in the
The summary comments which follow are brief because each pre-
ceding Section (II-VIII) contains a full summary at the end of
the Section. In addition, the Executive Summary provides a
high-spot summary of all key points discussed in the full
submission.
IX-2
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Conclusions and Recommendations
stratosphere), coupled with periodic scientific
reassessment, the risk is minimal in deferring
regulation until more accurate and complete
scientific information is available. This
combination assures EPA that significant potential
changes in the ozone can be detected in time to take
appropriate action, if it becomes apparent that a
problem is developing.
Ozone depletion, if it occurs, is truly an
international problem. Unilateral action by the U.S.
will have no appreciable impact on the environment
but will have severe economic impact on U.S. industry
and the economy. In light of the failure of the U.S.
aerosol ban to stimulate foreign action, it is
difficult to see how unilateral non-aerosol
regulation will meet with any greater success.
Rather, a policy of Assessment and Surveillance is
more likely to provide the scientific background
necessary to achieve the needed international
consensus, and regulatory program, should regulation
be determined to be required.
In short, we do not believe that the initiation of any
further regulation of CFCs at this time is justified by the
current body of scientific information. We believe further that
were such regulations enacted, it would not accomplish the EPA's
stated goals, but it would create severe and unfair burdens for
U.S. industry and the U.S. economy.
That industry and the regulators of that industry
disagree is not unusual. When the disagreement is over the facts
of an issue, it can be beneficial to proper decision-making.
However, our disagreement with EPA over the CFC/Ozone Depletion
Issue has a much broader basis than dispute over the
IX-3
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Conclusions and Recommendations
interpretation or significance of shared facts. In this case, we
believe very strongly that the Agency's programs and process have
been and continue to be inadequate in the areas of:
Adherence to the scientific method
Information gathering
Interpretation of the data
Balancing of risks versus benefits
Balancing of risks versus risks
Providing for needed research, and
Bringing all elements of the issue together to
enable reasoned decision-making.
Some specific examples of these inadequacies, taken from
the history of the CFC/0-, Depletion Issue, and from the ANPR,
follow:
1. The Science
In the scientific method, scientists collect and then
analyze data, postulate a theory to explain the data (generally
adding several assumptions to do this) and then, importantly, put
the theory to test by performing experiments to prove or disprove
key segments of the theory, particularly putting to test the
assumptions. Where possible, measurements in the real world are
also made to see whether these results fit the matrix of the
theory and its predictions. Generally, the theory has to be
remodeled several times before reaching a stage which can
consistently account for all experimental data and measurements.
IX-4
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Conclusions and Recommendations
At this point, one can say the theory has been proved, at least
according to current knowledge. Scientists try not to be "for"
or "against" a theory but rather to challenge the theory until it
can be demonstrated to their satisfaction that all observations
can be accounted for by the theory.
Unfortunately, the original CFC/CU Depletion Theory, a
good theory based on the available data at the time of its
advancement, has not always received this classic scientific
treatment i.e., being objectively put to test, questioned,
probed, dissected, reassembled, etc., by the qualified scientific
community. Perhaps due to the almost "science fictional" flavor
of the theory's predictions (skin cancer, crop failure, fish
kills, climate changes, etc., due to the release to the
atmosphere of odorless, colorless and seemingly benign chemicals
used throughout society with great benefit), the scientific
process for this issue became distorted or at least partially
subjugated to outside influences. What should have been science
spilled over into the media and political arenas. Participants
in the issue often chose sides (others were forced onto sides) --
one was either "for" or "against" the theory, with those in the
"for" camp casting themselves as for the protection of mankind,
and casting those in the "against" camp as against human health,
etc., for the sake of short-term profit. As a consequence, many
chose not to play at all [Margulis, 1980]. Unfortunately, many
of those in this latter category were those who were most needed.
Others, e.g., Allaby and Lovelock [1980], came to feel
that the treatment of this issue became so politicalized that
they could not obtain objective hearings.
And still others, most of whom were scientists employed
by industry, have had to fight an ongoing effort to get involved
in the arena at all because once one was classified as "against
IX-5
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Conclusions and Recommendations
the theory" in this case due to place of employment --
presumably all scientific objectivity was lost even though
those "for the theory" presumably retained this objectivity.
The search should have been and should be for the facts
for objective analysis. In contrast, consider the following
developments:
**
a) The industry research program (CMA/FPP) has invited
EPA scientists to its periodic reviews of the science [CMA,
1980c], yet EPA has organized forums, e.g., SRI [1980], in which
the organizers excluded industry scientists.
b) The U.S. delegations to international conferences to
discuss the issue have not included industry scientists or their
academic consultants (This is in contrast to the European
delegations). In addition, U.S. delegations have consisted
almost exclusively of individuals both in and out of government
who publicly have stated their conclusions that the theory is
valid or proved. Further, U.S. industry scientists have been
excluded from report writing workshops of these various
international reviews, for example, UNEP [1979] and OECD [1980].
c) EPA's public pronouncements on this issue press
releases, letters and information sheets [Jellinek, 1980a; 1980c;
EPA, 1980a; 1980c; 1980f; 1980g] have overstated conclusions
reached by available studies, ignored conflicting studies and not
acknowledged new developments in the science.
d) In the face of highly uncertain and conflicting
information, EPA has prematurely, and for all practical purposes,
conclusively announced that the theory has been sufficiently
proved that further regulation is called for, and as justi-
fication relies almost exclusively on worst case risk scenarios
[Jellinek, 1980c; EPA, 1980a; 1980c; 1980f; 1980g; 1980h].
IX-6
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Conclusions and Recommendations
e) And last, the Agency has argued that regulators do
not have the luxury of following good scientific practices --
that regulators must respond promptly to any theory that suggests
present or future harm to the public or the environment.
[Jellinek, 1980b].
In short, we submit that EPA has not followed good
scientific practices on this issue. By exaggerating conclusions
from available reports, by selective use of available informa-
tion, by treating uncertain findings as fact, by not giving equal
credence to dissenting opinion (even on occasion discouraging the
airing of dissenting opinion) and by focusing on and publicizing
worst case risk scenarios, the Agency has turned what should have
been, and should still be, a scientific issue into a media and
political issue. The specifics of the above examples are
developed in the body of the submission.
The following statements from Dr. Philip Handler, past
president of the National Academy of Sciences seem pertinent:
"A primary obligation of scientists is to communicate
their understandings and the limits of their under-
standings. Since these are all probabilistic, it
becomes very difficult for the media to deal with them.
These past 15 years, those areas of science and
technology that seemed to carry some elements of risk
have been overemphasized while the magnitude of specific
risks has frequently been dealt with somewhat
cavalierly."
He went on to say:
"Scientists have called attention to the carbon dioxide
problem, to the effect of freon (sic) on the ozone
layer, to the consequences of ionizing radiation, etc.
Once scientists have reported what they know, discussion
has frequently been taken over by individuals who claim
to represent "public science" or "critical science."
They seize upon a problem and adopt the philosophy of
the Delaney Amendment to the Food and Drug Act, which is
that only zero risk is tolerable, with little concern
IX-7
-------
Conclusions and Recommendations
for the benefits that might be lost. By and large the
media have shared the values of these critics and much
that appears in the news is offered from that point of
view. Once this happens, public discussion becomes
polarized, and those who try to state the other side of
the case all too easily come to be seen as reckless of
the public health." [Handler, 1980].
The ANPR
The subject ANPR does nothing to change our views or
allay our fears of the Agency's process.
a) The presentation on the science fails to mention
critiques of the science justification relied upon by EPA, [e.g.,
Du Pont 1980a; 1980b], fails to mention conflicting reports,
[e.g., UK DOE, 1979; EEC, 1980], and ignores information
available to EPA, [e.g., Brasseur, 1980; CMA, 1980a] , on recent
changes in the science changes which substantially reduce the
calculated "predictions" of ozone depletion upon which EPA
justifies its need to regulate now. Perhaps even more dis-
turbing, the results from analyses of actual ozone measurements
provided to the Agency [CMA, 1980a; 1980c] results which
indicate depletion is not occurring as predicted are not even
mentioned.
b) The question of risk continues to receive a black
and white' treatment regulate now or wait until its too late to
head off major damage -- while not mentioning the middle ground
of waiting for several additonal years, under a close monitoring
of the situation, in order to develop the science needed to
resolve the underlying key uncertainties. Neither did the ANPR
make mention of the findings of its own consultant [SRI, 1980]
which issued a report based on a workshop of participants invited
by EPA in which it was concluded that almost all the key
uncertainties could be resolved within roughly 5 years, and that
it would be "cost-effective" to do so.
IX-8
-------
Conclusions and Recommendations
c) Submissions [Masten, 1980; Du Pont, 1980c; 1980e;
Block, 1980] have been made to EPA pointing out errors in EPA
analyses, for example, permit pound calculations, growth rates,
and erroneous inclusion of non-emitting CFCs under the intended
regulatory scope. And EPA acknowledged overestimates had been
made [Muir, 1980]. Yet, all these errors persist in the ANPR.
d) The proposals for unilateral regulation presented in
the ANPR make little sense from an effectiveness standpoint. EPA
presents these regulations as being necessary, among other
reasons, to "stimulate coordinated worldwide [regulatory]
cooperation" [EPA, 1980e], yet the ANPR offers no analysis or
support for any finding that such a response would be
forthcoming.
e) The EPA's presentation in the ANPR of economic
incentives regulatory options for comment is not adequate in
content to support the apparent decision to employ these options.
The Agency bases its presentation on work done for it by the Rand
Corporation [Rand, 1980] . Industry was asked to critique the
final draft version of this study. Du Pont did so [Du Pont,
1980c] , pointing out that the study was a good start but should
not be used as a document on which to base a decison because: 1)
the data base was obsolete, 2) the scope of the study was
artificially constrained in a manner not consistent with real
world production and use of CFCs, and 3) the study was not an
economic impact study. We also pointed out that we were unable
to provide in-depth critique of the economic incentives
regulatory options analyzed by Rand because only the concepts
were presented no "How to implement?", or "What would they
look like?", or "How would they actually work?" This was in
March, 1980. Yet, the ANPR presents the same unfleshed-out
proposals for comment. Our previous comments and questions
remain unanswered and unacknowledged but now we asked to comment
again on the same exact concepts. Even more disturbing is the
IX-9
-------
Conclusions and Recommendations
fact that EPA apparently has used the Rand study to conclude that
these regulatory options are preferrable [EPA, 1980e; Jellinek
1980a; 1980c] , without having performed the necessary work (as
pointed out in our March, 1980 submission) to allow such a
determination.
A related point is that industry generally opened its
books to EPA's contractor, the Rand Corporation, with the
understanding that the final data base, on which the regulatory
options would be evaluated by Rand and by EPA, would be made
available to industry to enable parallel analysis [Mader, 1978],
Yet, to date, this data base has not been released.
f) Du Pont has met with EPA [Du Pont, 1980f] and
provided submissions [Du Pont, 1978; 1980d] on our efforts to
develop alternative fluorocarbon products. We have made it very
clear that great difficulties have been encountered. Yet, EPA
has informed audiences [DeKany, 1980] that great progress was
being made and EPA was optimistic that Du Pont was near a
breakthrough. Further, the ANPR makes no mention of the
difficulties in, or low probability of, developing safe
alternative compounds.
g) Du Pont has outlined the risks which could be
expected to develop from use of currently available products
(which would have to be used were EPA to be successful in
restricting the availability of CFCs) [Du Pont, 1978; 1980c], yet
no mention of these risks appears in the ANPR.
h) EPA was informed of the possible energy penalty from
CFC regulation [Battelle, 1980]. Yet no mention of energy
consequences appears in the ANPR.
i) And last, any hope we had been harboring that our
response points could make some difference in the Agency's
IX-10
-------
Conclusions and Recommendations
program was dashed after viewing the rulemaking timetable in
EPA's Chlorofluorocarbon Phase II Development Plan [EPA, 1980,
p. 3] a timetable showing:
A due date (Nov., 1980) for the initial draft of the
proposed rule bef o re comments on the ANPR are
received (due by January 5, 1981). .
A due date (Jan., 1981) for the final draft of the
proposed rule before ANPR comments could be
digested.
A plan to publish a formal proposed rule (March,
1981) 3 months before EPA will receive a final
report from its contractor, just hired in Oct.,
1980, to study in more detail various critical
aspects of the the economic incentives regulatory
options now being favored by EPA for use.
Whatever vested interest industry may have in a given
decision-making situation, there are major mutual benefits to
joint open cooperation with the regulating agency. Without such
cooperation at each step in the decision-making process, vital
inputs are lost which could minimize the economic cost of
regulation, identify adverse consequences of regulatory scenarios
and expand the regulatory options under consideration.
We reiterate for the record our fervent belief that
regulatory decision-making which:
fails to measure the validity of the theory against
real world measurements,
fails to consider the need for, or the consequences
of, intermediate delay versus immediate action,
IX-11
-------
Conclusions and Recommendations
fails to assess fully the consequences of regulatory
action, and
fails to balance the risk generated by regulation
against the risk from no regulation,
is seriously flawed, and a luxury which the nation, its busi-
nesses, and its citizens cannot afford.
We conclude, therefore, that both legal and policy
considerations mandate that EPA defer CFC regulation until more
accurate and complete scientific information is obtained and
other necessary studies are performed. We earnestly request that
EPA commit to a solution of the uncertainties in the ozone
depletion theory and work towards an international consensus
before reaching a decision to engage in further unilateral
regulation of CFCs. Specific recommendations for action by EPA
follow in the next section.
IX-12
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Conclusions and Recommendations
B. RECOMMENDATIONS
The following are Du Font's recommendations for actions
to be taken, or at least initiated, by the EPA, which we believe
will lead to a proper resolution of the CFC/ozone Controversy.
Should this resolution dictate the need for further regulation,
such actions as outlined herein will help ensure a balanced and
cost-effective regulation.
EPA should promptly arrange for an updated
assessment of ozone trend analysis by a qualified
outside body, such as the NAS. If an outside review
f
body cannot be employed, a joint industry/govern-
ment/academia symposium should be held to review
objectively the method opposite the questions: How
sensitive is it? What is the confidence range? How
and when can it be further improved? A companion
recommendation would be for EPA to support the
further development of trend analysis.
EPA should arrange for an objective thorough review
of the science (both the theory itself and effects
of ozone depletion) by an international panel of
qualified scientists. A joint NAS/UK Royal Society
effort would be a logical starting point. Inter-
national political organizations such as the Organi-
zation for Economic Cooperation and Development
(OECD) are not adequate for this assessment due to
the limited participation of scientists and the
political pressures present in such groups.
Even if an international review cannot be promptly
arranged, EPA should recontract with NAS for an
updated review of the science, followed by a yearly
reassessment. The predicted problem is a long-term
IX-13
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Conclusions and Recommendations
problem. The science is changing rapidly. Any
regulatory decision based on the science at any
point in time must be reassessed as the scientific
justification for that decision changes.
Between NAS reports, EPA should meet quarterly with
the Chemical Manufacturers Association (CMA) Fluoro-
carbon Project panel (FPP), and other appropriate
advisors, to stay current with the board spectrum of
scientific developments.
The Agency needs to publish the parameters of its
decision-making on the issue:
i. What specific level of ozone depletion does EPA
consider to pose an unreasonable risk to health
and the environment?
ii. What will it take to convince EPA there is or
is not a serious problem, e.g.,
a. What sensitivity of ozone trend analysis
is accepted (and on what basis)?; What
ozone trend analysis results would be
viewed as a significant indication of a
developing problem?
b. What other science developments would be
viewed as significant?
c. What criteria does EPA use to judge the
credibility of sources and reported
developments, and which sources meet these
criteria?
IX-14
-------
Conclusions and Recommendations
d. What will EPA do to ensure staying abreast
of developments?
e. What is the process EPA uses to get
developments assessed and to the attention
of the regulatory decision-makers?
f. What must happen internationally to
convince EPA of the need or lack of need
for further U.S. regulation? By whom? In
what time period?
iii. How does the specific proposed regulation
result in reduction of risk on this issue and
what is the magnitude of this reduction? If in
the periodic reviews of the science it is
determined the risk has decreased signifi-
cantly, what are the parameters of regulatory
response?
The Agency needs to redefine the problem of ozone
depletion generically and then determine and justify
whether CFCs should be treated in isolation from
other potential depleting compounds and in isolation
from potential ozone increasing compounds. The
charge to EPA of the 1977 Clean Air Act Amendments
is protection of stratospheric ozone, not the regu-
lation of CFCs. What is the justification for
including CFC-22 under the regulation when methyl
chloroform represents a greater total potential
problem? Conversely, modelers now include the
CCU/ozone augmentation effect. This needs to be
factored into EPA's assessment.
IX-15
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Conclusions and Recommendations
On the international level, EPA should abandon its
excessively political strategy in favor of an effort
to help obtain the needed global scientific
assessment and resolution. The Agency should
publish its plans for furthering the scientific
resolution of this issue.
As pointed out in previous sections, EPA must com-
plete a significant body of work before it can
support the proposed regulatory options. Further
assessment and study are needed in the areas of:
i. Emission reduction and alternatives. What is
achieveable, in what time-frame and at what
cost?
ii. Impact of economic incentives options. What
would be the actual impact on industry and
consumers if the options were applied to all
CFCs and all CFC uses as proposed?
iii. Energy penalty of regulations.
iv. Risk from alternatives substituted for CFCs,
and a risk-risk assessment of continued CFC use
versus use of alternatives.
v. A detailed fleshing-out of the incentives
options for comment specifying exactly how
they would be structured, how they would be
implemented and how they would function.
We recommend that EPA hold a series of informational
exchange meetings around the country to discuss its
IX-16
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Conclusions and Recommendations
proposals, hear concerns and gather information to
help its studies of i.-iv. above.
EPA needs to employ a more realistic timetable. The
current timetable shows a completion date of
January, 1981 for the final draft of the proposed
rule. The ANPR comment period closes January 5,
1931. Further, we question how EPA can digest and
evaluate ANPR comments and submissions in time to
publish a formal proposed rule in March, 1981. The
proposed timetable appears unrealistic unless EPA
has no interest in the ANPR comments and has already
made up its mind on how to proceed. Given the
magnitude of the issues which remain to be
addressed, particularly on the economic incentives
options, we fail to see how a reasonable proposal
can be finalized in this period. We ask for
clarification.
Due to the untried nature of the economic incentive
options, the numerous questions and concerns which
have yet to be answered, and the total lack of
experience with these regulatory options in the real
world, if EPA elects to proceed with their use, we
would strongly urge that a pilot test first be
undertaken. The options should first be applied in-
to a carefully monitored industry or industry seg-
ment, and the impacts thoroughly evaluated, rather
than immediately applying this theoretical regula-
tory approach to the CFC industry which has such
broad and major impact on the total economy.
If EPA decides to promulgate a rule, (regardless of
which regulatory option is selected) the Agency
should issue an annual report detailing:
IX-17
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Conclusions and Recommendations
i. Results of actual ozone measurements. Has
depletion been detected? If so, how much and
at what rate?
ii. Computer calculated or estimated ozone
depletion based on best current information.
What are the current model calculations?
iii. Status of U.S. versus world regulatory
t
situation. Has the U.S. regulation achieved
the Agency's goals? Have other countries
followed EPA's lead or is the U.S. example
being ignored?
iv. The continued nee'd for the regulation as
promulgated.
v. The economic impact of the promulgated
regulation, particularly if new regulatory
concerns are involved. This should be compiled
by major market segment and business size, as
well as a summary report.
vi. The identity of substitutes employed in place
of CFCs by use category. For all substitutes
(and especially new substitutes) safety data,
toxicity data, energy efficiency, development
cost of replacements and redesign cost for
manufacturers should be monitored for a period
of 10-20 years to determine the true cost of
regulation for guidance in future rulemaking
efforts.
IX-18
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