Sep 18, 2017
Column / Harder Line

Industry to Trump: Keep Obama climate policy

Illustration: Lazaro Gamio / Axios

The world's biggest air conditioning and chemical companies are urging President Trump to defend one of his predecessor's landmark climate policies. So far it's working.

Why it matters: The policy, to phase down greenhouse gases emitted from refrigerants in appliances like air conditioners and refrigerators, is the only Obama-era climate policy Trump hasn't targeted for repeal. Companies, led by global chemical makers Honeywell and Chemours, are lobbying the administration to defend a regulation and support a global treaty on the issue, according to industry officials, administration officials and others involved in the issue.

The bottom line: Companies have spent millions complying with the policy and other similar standards around the world over the past several years — and they don't want that money to go to waste. To the industry and administration, this is more about financial investments than it is climate change. That makes it surprisingly non-controversial compared to the Paris climate deal.

One industry, mostly united

The industry backs a global treaty to phase down the refrigerants, which contain powerful greenhouse gases called hydrofluorocarbons, or HFCs.

Led by the Obama administration, world leaders in Kigali, Rwanda, agreed last October to amend the Montreal Protocol to phase down emissions of HFCs. First created 30 years ago to fix the hole in the Earth's ozone layer, that treaty is now achieving its goal.

The Kigali amendment, as it's known, has faced little political pushback compared to the Paris climate deal, which Obama entered into unilaterally and which Trump has said the United States is abandoning.

EPA Administrator Scott Pruitt, a vocal critic of the Paris accord, has not commented about this issue publicly much, if at all.

"We are very quick to distinguish the Montreal Protocol from the Paris climate deal," said Kevin Fay, executive director of the Alliance for Responsible Atmospheric Policy, an industry trade group representing companies like Honeywell, Arkema, Carrier and Johnson Controls.

In his discussions urging the administration and Republican lawmakers to back the policy, Fay says he references President Ronald Reagan, who signed the Montreal Protocol in 1988 and is someone Trump admires. "It's Reagan-era environmental policy done right," Fay says.

David Stevenson, who directs energy issues at the Caesar Rodney Institute, a free-market think tank in Delaware, is the conservative movement's voice opposing the Kigali amendment.

"The Montreal Protocol is about ozone reduction, not climate change," said Stevenson, who served on Trump's team helping with the transition at EPA. "I think the administration just hasn't really looked at it too closely, and it has gotten some comments from businesses that want to keep it in place."

The reasons the industry supports the KIgali amendment are not about climate change, but business certainty.

"It really was just a matter of wanting to have one global process rather than having a patchwork of regulations that they would have to comply with," said Francis Dietz, a vice president at The Air Conditioning Heating & Refrigeration Institute. That association represents 90% of U.S. air conditioning manufacturing and 70% of the global industry.

The big picture: This is the most aggressive example of how different types of industries are urging Trump to use caution with his regulatory rollback, in the name of business certainty. Some executives in the fossil fuel and electric power sectors are urging the administration not to issue wholesale repeals of several regulations, including a rule cutting carbon emissions from power plants.

Legal test

In February, Justice Department lawyers defended in court an Environmental Protection Agency rule phasing out certain uses of refrigerants that emit HFC's, at the behest of most companies in the industry. A divided three-judge panel of the D.C. federal appeals court ruled against EPA in August and in support of two companies arguing the agency overstepped its authority.

The administration now has to decide by Friday whether it will seek a rehearing to the full court. That decision will test whether it backs a policy most regulated companies support, despite the president's rhetoric opposing regulations and dismissing climate change. An EPA spokeswoman would not say what the agency plans to do.

"Honeywell -- and many other American companies, particularly in the heating and cooling industry -- have made significant investments based on that [EPA] standard," A Honeywell spokesperson said. "To pull that back now unfairly creates damage to U.S. industry, and threatens U.S. leadership on a global level."

Honeywell, which along with Chemours intervened in the case in support of EPA, is probably going to seek a rehearing. The two companies are working together on researching refrigerants. Chemours is also considering appealing, a spokesperson said. The industry associations also support appealing. The Natural Resources Defense Council, another intervenor, plans to appeal.

Spokespeople for the two companies that filed the lawsuit, Arkema and Mexichem Fluor, declined to comment.

Stay tuned

Because the Kigali amendment is part of the legally binding Montreal treaty, the Senate must vote on whether to ratify it. The State Department needs to first send it over. A department spokeswoman said there is no update.

The industry is in no rush, given the hyperpartisan nature of Washington these days. The amendment agreed to in Kigali is likely to go into effect for the countries that have signed it in January 2019.

"Would it be in our best interest for us to deal with that prior to then?" asked Fay of the Alliance for Responsible Atmospheric Policy. "Yes."

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