Implementing the montreal protocol in china: Use of cleaner technology in two industrial sectors

An analysis of the household refrigeration sector and the foams sector investigates how Chinese enterprises have adopted cleaner technologies involving substitutes for ozone depleting substances (ODSs), such as chlorofluorocarbons (CFCs). The performance of the household refrigeration sector in reducing ODS consumption has been superior to that of the foams sector, even though required technology changes are relatively simple for the foams sector. There are two explanations for this outcome. First, market demand matters. The influence of the global market, multinational corporations, intense (and occasionally misleading) advertising about non-CFC products, and severe competition for consumers caused Chinaʹs principal refrigerator manufacturers to adopt non-CFC production technologies. Similar incentives did not exist for enterprises in the foams sector. Second, industrial structure matters. The foams sector includes a large number of small enterprises with limited financial and technical capability and weak access to information and technology, and these factors obstructed technological change. In general, assistance from the Multilateral Fund established under the Montreal Protocol has motivated enterprises to shift to ODS reduction technologies, but complex and lengthy procedures for accessing the Multilateral Fund, difficulties in finding appropriate suppliers of non-CFC technologies, and insufficient financial and technical capabilities of many enterprises have slowed down this shift. Our results provide a foundation for making changes in international assistance programs and Chinaʹs strategies for CFC reduction.