Policy and Entrepreneurial Responses to the Montreal Protocol

This Technical Paper examines: (i) how the governments of the six dynamic Asian economies — Hong Kong, Korea, Malaysia, Singapore, Taiwan, and Thailand — have responded to the challenge posed by the Montreal Protocol to reduce their consumption of ozone-depleting substances like chlorofluorocarbons (CFCs) and methyl chloroform (MC); (ii) how electronics firms in those economies have coped with the technical and other problems involved in substituting for CFC-113 and MC in their cleaning operations. The paper shows how different national control strategies and policy frameworks can shape incentives for conservation and recycling; countries with quantitative restrictions in place have been highly effective in curtailing CFC consumption. Once quotas are in place, governments do well to devise an allocation system that enables them to capture the bulk of the quota rents to finance measures designed to facilitate the phase-out effort. Substantial reductions through conservation measures ...