Baselines: Past Practices and Current Challenges

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BASELINES: PAST PRACTICES AND CURRENT CHALLENGES

1. Scope of the Briefing Note

In 2015, at their Twenty-Seventh Meeting, the parties decided in decision XXVII/1 entitled “Dubai pathway on HFCs” to “work within the Montreal Protocol to an HFC amendment in 2016 by first resolving challenges by generating solutions in the contact group on the feasibility and ways of managing HFCs”.

The purpose of this briefing note is to provide background information about the following areas:

• The baselines agreed under the Montreal Protocol to date for CFCs, carbon tetrachloride, HCFCs and methyl bromide, as examples,in both non-Article 5 and Article 5 parties;
• The time lag between the year in which a decision was taken and the years of the baseline and initial control measures;
• The baselines that have been put forward in the HFC amendment proposals.[1]

The information in this note is intended only as background material for the parties; it is not intended to be exhaustive and does notprovide policy recommendations.

2.Existing baselines for ozone depleting substances

For almostall groups of ozone depleting substances (ODS)[2] controlled under the Montreal Protocol, the parties have established baselineswith the aim of providing a benchmark or reference level for any control measures relating to production and consumption, such as a freeze or reduction steps. This section provides information on the Articles of the Montreal Protocol that are relevant to baselines;the elements used for baselines; the baseline years adopted for various ODS groups; and the time lag between the year in which a decision was taken and the years of the baseline and initial control measures.

2.1 Legal context and Articles relevant to baselines

Although the terms baselineand base level are commonly used in practice, these terms are not used in the Articles of the Protocol. Instead, whenreferring to the benchmarks necessary for determining the consumption and production levels allowed by control measures,the Articles have used phrases such as:

• ‘base year’ (Article 5(1 bis));
• ‘…the basis for determining [a party’s] compliance with the control measures relating to’ consumption or production (Article 5(3));
• each party ‘shall ensure that’ consumption and production‘does not exceed’ the consumption or production level in a specific year or years (used for all ODS baselines in Articles 2A-2F and 2H, and Article 5(8ter)).

Baselines for controlled substances have been introduced into the Montreal Protocol,either in the original Protocol text or by amendments, at the same time as the initial control measures for new controlled substances were adopted. Some ODS baselines have also been revisedthrough adjustments.The Articles of the Vienna Convention and Montreal Protocol do not contain any text that specifies how parties should determine baselines when adopting the baselines for controlled substances. TheMeetings of the Partieshave, therefore, been free to define in amendments or adjustments the baselines in ways that they consideredappropriate (subject, of course, to the normal legal procedures for adopting amendments and adjustments and the rules of procedure for meetings).

The original paragraphs setting out Non-A5 control measures and associated baselines for Annex A substances (CFCs and halons) were included in Article 2 of the original 1987 text of the Montreal Protocol. The paragraphs that defined Non-A5control measures and baselines for all subsequent new groups of ODS were also inserted into Article 2 (creating Articles 2A –2I)by various amendments.

The paragraphs that set out initial A5 baselines and related special provisions were includedin Article 5 of the 1987 text. Subsequently, the baselines for A5 parties were defined by inserting or revising text in Article 5. For most groups of ODS, the text provided time lags for A5 parties’ implementation ofthe control measures set out in Article 2. However, in the case of HCFCs and methyl bromide, the A5 parties’ control measures were specified primarily within the text of Article5 itself, instead of referring to the text of Article 2. Bothapproaches have the same effect in terms of defining the control measures for A5 parties.The method used for calculating the control levels, from which the baselines are derived,is set out in Article 3 on “Calculation of control levels”.

2.2 Elements of ODS baselines

Baselines may contain different elements and different forms of baselines have been adopted as benchmarks for a party’s compliance with the ODS control measures.

Most baselines are based on the consumption or production in a specific year or years:

• ODS consumption or production in a single specific year. Adopted in the baselines for CFCs, CTC and methyl bromide in Non-A5 parties, for example.
• Average annual ODS consumption or production during several years. Adopted in the baselines for CFCs, CTC and methyl bromide in A5 parties, for example.

Most baselines are defined by the consumption or production of one ODS group only; however, other elements have also been adopted:

• Baselines based only on the ODS group that is being regulated; the CFC consumption baseline, for example, is based on CFC consumptiononly (no other substances). Adoptedin the baselines for most ODS, such as CFCs, CTC and methyl bromide in A5 parties and Non-A5 parties.
• Baselines composed of two ODS groups: the ODS group to which the baseline refers, plus another group that has a strong technological relationship with it. In the case of HCFCs, the consumption baseline in Non-A5 parties includesboth HCFC consumption and a percentage of CFC consumption.

Baselines composed of both consumption and production:

• The initial production baseline for HCFCs in A5 parties was defined as average HCFC production and HCFC consumption in 2015 (later adjusted to average production in 2009-10). The Non-A5 HCFC production baseline was defined as the average of 1989 HCFC production + 2.8% of 1989 CFC production and 1989 HCFC consumption + 2.8% of 1989 CFC consumption.

For most groups of ODS the consumptionand the production baselines have been based on the same elements and same years. For example, the baselines for consumption and production are the same in the case of CFCs, halons, CTC, methyl chloroform, and methyl bromide. However, the parties adopted different baseline elements for consumption and production in the case of HCFCs, as illustrated above. Section 3 provides further information.

2.3 ODS baseline years

The year or years chosen for baselines have varied from one ODS group to another, depending on a number of different technical, policy, financial and environmental factorsconsidered by parties at the time the decision was made. Tables 1 and 2 below summarize the baselinesand the year when MOP adopted the baselines, for selected ODS - CFCs, CTC, methyl bromide and HCFCs – as examples. Theyalso show the time lag (number of years) between the decision year, the baseline year, and the year of the first control measure, to illustrate the various time periods and relationships between baselines and initial control measures.

Single year or average of several years: As noted above, ODS baselines in Non-A5 parties have generally been based on consumption or production in a single year, while baselines adopted in A5 parties have generally been based on the average of several years. The latter approach was usually intended to assist A5 parties in addressing periods of growth in ODS use, and/or situations where ODS use may fluctuate from year to year (as in the case of methyl bromide, for example), although growth pressuresand fluctuationshaveexisted in both A5 and Non-A5 parties.

Past or future baseline years: The baselines adopted for Non-A5 parties were often based on a recent year in the past, as illustrated in Table 1. For most groups of ODS, the Non-A5 baseline was set one year in the past, i.e. the year preceding the year in which the MOP decision was made. For HCFCs, the consumption and production baselines for Non-A5 parties were set 3 and 10 years, respectively, in the past (shown in Table 2, below).In contrast, the baselines adopted for A5 parties were generally set in the future. For example, the CFC A5 baseline was set 8 – 10 years in the future, while the methyl bromide A5 baseline was set 0 – 3 years in the future, as shown in Table 1 below.

Time lag between the baseline yearsof Non-A5 and A5 parties: The time lag (number of years) between the baseline years for Non-A5 parties and for A5 parties, has varied from one group of ODS to another. The time lag between Non-A5 and A5 baselines was 9-11 years for Annex A CFCs, Annex B other fully halogenated CFCs and CTC, 4-7 years for methyl bromide, and 20 to 21 years (initially 26 years) for HCFCs (Tables 1 and 2). Section 3 below provides further information.

Timelag between the baseline year andinitial control measures: As noted above, baselines provide a benchmark for control measures. The length of the time lag between the baseline year and the first control measure, or between the decision year and the first control measure, influences the growth that could occur in theconsumption / production of a substance before the initial control comes into force. A longer time lag that occurs in the future years (i.e. after the decision year)would allow greater growth to take place. The growth that occurs before the baseline year would be part of the consumption / production baseline while the growth that occurs after the baseline year would have to be reduced to comply with the requirement of the first control measure.

In Non-A5 parties, the number of years between the consumption baseline and the first control measure (namely, a freeze or initial reduction step) varied from 3 years for Annex A CFCs, 6years for CTC, 4 years for methyl bromide, and 7 years for HCFC consumption, for example[3] (Tables 1 and 2).Thetime periods between the baseline years and the first control measures also varied in a similar manner for A5 parties. The number of years between the consumption baseline and the first control measure in A5 parties varied from 2 - 4 years for Annex A CFCs, 5 - 7 years for CTC, 4 - 7 years for methyl bromide, and 3 - 4years for HCFC consumption,[4] for example (Tables 1 and 2). Section 3 below provides further illustrations.

Table 1: Baseline years for CFCs and selected ODS, year of decision, and year of first control measure[5]
CFCs Annex A Gp I / Non-A5 parties / A5 parties / Years between A5 and Non-A5 provisions
Year of decision / 1987(1) / 1987(1) / nil
Baseline elements & year / Consumption or production in 1986 / Average consumption
in 1995-1997(2) / 9 – 11 years
First control measure / 1989 (freeze)(3) / 1999 (freeze) / 10 years
Time between baseline and first control measure(4) / 3 years / 2 – 4 years / -
Time between decision year
& baseline year(4) / 1 year in past / 8 – 10 years in future / -
Time between decision year
& first control measure(4) / 2 years in future (3) / 12 years in future / -
Other CFCs Annex B Gp I
Year of MOP decision / 1990(5) / 1990(5) / nil
Baseline elements & year / Consumption or production in 1989 / Average consumption
in 1998-2000(6) / 9 – 11 years
First control measure / 1993 (20% reduction) / 2003 (20% reduction) / 10 years
Time between baseline and first control measure / 4 years / 3 – 5 years / -
Time between decision year
& baseline year / 1 year in past / 8 – 10 years in future / -
Time between decision year
& first control measure / 3 years in future / 13 years in future / -
CTC
Year of MOP decision / 1990(5) / 1990(5) / Nil
Baseline elements & year / Consumption or production in 1989 / Average consumption
in 1998-2000(7) / 9 – 11 years
First control measure / 1995 (85% reduction) / 2005 (85% reduction) / 10 years
Time between baseline and first control measure / 6 years / 5 – 7 years / -
Time between decision year
& baseline year / 1 year in past / 8 – 10 years in future / -
Time between decision year
& first control measure / 5 years in future / 15 years in future / -
Methyl bromide
Year of MOP decision / 1992(8) / 1995(9) / 3 years
Baseline elements & year / Consumption or production in 1991 / Average consumption
or average production
in 1995-1998 / 4 – 7 years
First control measure / 1995 (freeze) / 2002 (freeze) / 7 years
Time between baseline and first control measure / 4 years / 4 – 7 years / -
Time between decision year
& baseline year / 1 year in past / 0 – 3 years in future / -
Time between decision year
& first control measure / 3 years in future / 7 years in future / -

(1)The Montreal Protocol of 1987.

(2)The CFC (Annex A) production baseline for A5 parties was introduced later, by the 1997 adjustments, with the same years as the A5 consumption baseline.

(3)In 1987 the Parties agreed to freeze CFC consumption 7 months following the entry into force of the MP, and the resulting initial freeze date was July 1989.

(4)For simplicity, the number of years between decisions, baseline years and first control measures has been calculated from mid-year to mid-year. This provides an indicative period of time.

(5)1990 London Amendment agreed at MOP2.

(6)The CFC (Annex B) production baseline for A5 parties was introduced later, by the 1997 adjustments, with the same years as the A5 consumption baseline.

(7)The CTC production baseline for A5 parties was introduced later, by the 1997 adjustments, with the same years as the A5 consumption baseline.

(8)1992 Copenhagen Amendment agreed at MOP4.

(9)1995 adjustments agreed at MOP7.

Table 2: Baseline years for HCFCs, year of decision, and year of first control measure[6]
HCFC consumption / Non-A5 parties / A5 parties / Years between A5 and Non-A5 provisions
Initial decision / Revised decision
Year of MOP decision / 1992(1) / 1995(2) / 2007(3) / 3 / 15 years
Baseline elements & year / Sum of 1989 HCFC consumption + 2.8% of 1989 CFC consumption (4) / Consumption
in 2015 / Average consumption
in 2009-2010 / 26 / 20 – 21 years
First control measure / 1996 (freeze) / 2016 (freeze) / 2013 (freeze) / 20 / 17 years
Time between baseline and first control measure(5) / 7 years / 1 year / 3 – 4 years / -
Time between decision year
& baseline year(5) / 3 years in past / 20 years in future / 2 – 3 years in future / -
Time between decision year
& first control measure(5) / 4 years in future / 21 years in future / 6 years in future / -
HCFC production
Year of MOP decision / 1999(6) / 1999(6) / 2007(3) / 0 / 8 years
Baseline elements & year / Average of 1989 HCFC production + 2.8% of 1989 CFC production and 1989 HCFC consumption + 2.8% of 1989 CFC consumption / Average HCFC production and consumption in 2015 / Average production
in 2009-2010 / 26 / 20 – 21 years
First control measure / 2004 (freeze) / 2016 (freeze) / 2013 (freeze) / 12 / 9 years
Time between baseline and first control measure / 15 years(7) / 1 year / 3 – 4 years / -
Time between decision year
& baseline year / 10 years in past / 16 years in future / 2 – 3 years in future / -
Time between decision year
& first control measure / 5 years in future / 17 years in future / 6 years in future / -

(1)1992 Copenhagen Amendment agreed at MOP4.

(2)1995 adjustments agreed at MOP7 (Vienna).

(3)2007 adjustments agreed at MOP19 (Montreal).

(4)The baseline adopted in 1992 included 3.1% of 1989 CFC consumption. In 1995 this was adjusted downward to 2.8%.

(5)For simplicity, the number of yearsbetween decisions, baseline years and first control measures has been calculated from mid-year to mid-year. This provides an indicative period of time

(6)1999 Beijing Amendment agreed at MOP11.

(7)The time period between the baseline and first control measure appears unusually long because the baseline for HCFC production was set 10 years in the past, in the same year as the CFC freeze (1989), because of the technological link between these two groups of substances.

1. Evolution of ODS baselines

This section outlines the decisions taken by parties on the baselines for selected groups of ODS, as illustrative examples: Annex ACFCs, carbon tetrachloride (CTC), HCFCs and methyl bromide. The text also includes brief information about the initial control measures adopted for each group of ODS, to illustrate the variations in the period of time (number of years) between the baseline year(s) and the initial control measures.

3.1 Baselines for Annex A CFCs

Figure 1 below provides a schematic representation of the sequence of MOP decisions relating to Annex A CFC consumption baselines in Non-A5 and A5 parties. The figure also includes the first control measures,and the final CFC phase-out dates to illustrate the overall timescale.

Figure 1: Timeline of baseline decisions and key control dates for Annex ACFC consumption[7]

Non-A5 baseline for CFC consumption: When developing the original Protocol text of 1987 the negotiating countries faced major differences in opinions.[8] They set up four working groups to deal with the most difficult issues; one of these working groups addressed control measures and baselines.

The eventual text adopted in 1987 established a consumption (and production)baselinefor Annex A CFCs for non-A5 parties, as well as a freeze and two reduction steps.[9] The baseline year for Non-A5 parties was set at 1986, one year in the past, even though consumption data from Non-A5 parties was limited. A historic baseline year was chosen to prevent countries increasing theirconsumption (or production) in order to increase their baseline level. In addition, the parties wished to send a clear signal to industry that it was necessary to take urgent steps to protect the ozone layer, as a precautionary measure.

It was not feasible to basethe baseline on reliable data at that time, because no formal CFC data reporting existed (notably, even by 1989-1990 the reported data for 1986 CFC consumption was not reliable).Conscious of this fact, the parties inserted clauses in Article 7 that would allow parties to report ‘the best possible estimates’ of statistical ODS data for baseline years ‘where actual data are not available’ (Article 7, paragraphs 1 and 2).