‘America First’? Climate rule tests Trump pledge

Source: Maxine Joselow, E&E News reporter • Posted: Tuesday, September 18, 2018

Since taking office, President Trump has repeatedly touted his “America First” policies. But in at least one significant climate battle, his administration is siding with foreign companies over American ones.

At issue is the fate of heat-trapping chemicals known as hydrofluorocarbons, or HFCs. While short-lived in the atmosphere, HFCs are thousands of times more potent as greenhouse gases than carbon dioxide.

The Obama administration made phasing out HFCs a key part of its climate agenda. In 2015, EPA issued a rule effectively banning uses of the chemicals across four industrial sectors: aerosols, air conditioning for new cars, retail food refrigeration and foam blowing.

But two foreign HFC manufacturers — Mexico-based Mexichem Fluor and France-based Arkema SA — sued EPA over the rule. And in an August 2017 majority opinion penned by Supreme Court nominee Judge Brett Kavanaugh, the U.S. Court of Appeals for the District of Columbia Circuit sided with them, ruling that EPA had exceeded its authority under the Clean Air Act (Greenwire, Aug. 8, 2017).

The Trump Justice Department initially defended the Obama rule in court. But DOJ flip-flopped and last month filed a Supreme Court brief aligning the Trump administration with Kavanaugh and the foreign companies, arguing that the split D.C. Circuit ruling should be left intact (Greenwire, Aug. 29).

On the other side of the debate: Honeywell International Inc. and Chemours Co., two American chemical companies that have made significant investments in safer alternatives to HFCs. Honeywell, for example, last year opened a $300 million Louisiana facility to manufacture an HFC replacement for use in cars.

In a court brief last week, the two companies argued that the D.C. Circuit ruling was inconsistent with the Clean Air Act and would have a “devastating” impact on human health and the environment.

The administration’s stance is hard to square with some of Trump’s favorite rhetoric.

“From this moment on, it’s going to be America First,” Trump said in his inaugural address. “Every decision … will be made to benefit American workers and American families.”

The irony hasn’t been lost on Trump’s critics.

“It’s ironic to see the Trump EPA side with two foreign chemical makers who make old and dangerous chemicals over American companies that invested billions in innovation to make safer alternatives,” said David Doniger, senior strategic director of the Climate and Clean Energy Program at the Natural Resources Defense Council, which has also asked the Supreme Court to step in and overturn Kavanaugh’s decision.

Adding another wrinkle: Trump’s famous campaign promise to prevent a Carrier Corp. factory from moving to Mexico.

The move of the Indianapolis factory to Mexico drew national headlines and was expected to result in the loss of 1,400 jobs. Then-candidate Trump made saving Carrier’s “big, beautiful” plant a cornerstone of his stump speeches and protectionist stance on trade. (Incidentally, the plant ended up moving and laying off more than 500 employees.)

Carrier, too, is at odds with Trump over HFCs.

The air-conditioning company and four other firms that together make up more than 75 percent of U.S. residential and commercial refrigeration manufacturing filed an amicus brief in support of the Obama rule. They warned of dire economic consequences if it’s rolled back (Greenwire, June 26).

The companies said they had invested “well over a billion dollars” in developing replacements to HFCs. “But the impact of the decision below,” they said, “goes well beyond this dollar amount. The decision completely upends a regulatory program that has worked well for almost 25 years.”

Francis Dietz, vice president of public affairs at the Air-Conditioning, Heating and Refrigeration Institute, said the majority of member companies support the rule because it creates regulatory certainty.

“It’s not typical for industry to be seeking regulation,” Dietz said. “But in this case, we saw the writing on the wall. We knew that there were entities around the world and within the United States that were probably preparing to try and regulate HFCs themselves.”

He added, “Industry likes certainty. A lot of people misunderstand and think industry is just reflexively opposed to regulations. But that’s simply not true.”

Art of the deal?

The legal brouhaha over HFCs is playing out in the larger context of a global pact to curb potent greenhouse gases.

The Kigali Amendment to the Montreal Protocol is one of the world’s most significant greenhouse gas reduction pledges. Finalized in October 2016, it would avert enough emissions from air-conditioning units and refrigerators to reduce warming by 0.5 degree Celsius (0.9 degree Fahrenheit) by 2100.

Nearly 200 countries have ratified Kigali. But in the United States, the amendment has languished now that it lacks a champion in the White House (Greenwire, Feb. 19).

George David Banks resigned in February from his post as Trump’s climate and international energy adviser. He was widely seen as a moderate voice in the administration who could convince Trump to support climate policies if an economic case could be made.

Banks is now at the helm of Let America Lead, a coalition of industry and conservative groups pushing Trump to send Kigali to the Senate for ratification (Greenwire, July 24).

In an interview, Banks said he believes he can convince Trump that regulating HFCs is consistent with his “America First” vision.

“You can make a very sound argument that the Montreal Protocol has helped lock in a U.S. competitive advantage that we’re really benefiting from now,” Banks said. “Without the Montreal Protocol, I would probably argue that Chinese state-owned enterprises in particular would come to dominate the global market.”

He added, “If I were in front of the president, I would say: ‘Sir, you have to know what happens if we don’t ratify. If we don’t ratify, we’re going to have a situation where the Chinese come in and dump cheap HFCs into the U.S. market. They knock out a big chunk of manufacturing in this space.'”

If that pitch didn’t work, Banks said he would appeal to the president’s penchant for making good deals, encapsulated in his 1987 book “The Art of the Deal.”

“The president likes to talk about making deals that are good for the United States,” Banks said. “In the case of the Montreal Protocol, there’s no question that the U.S. has a deal that promotes U.S. leadership at the expensive of foreign competition.”

‘It’s a win-win’

In the absence of federal leadership on HFCs, blue states are filling the void.

Connecticut last week joined Maryland, New York and California in directing their state agencies to draft standards phasing out the use of HFCs.

“By phasing out super-polluting HFCs and turning to safer alternatives, these states are demonstrating strong national leadership in that global fight,” said NRDC’s Doniger. “They’re protecting our children and future generations from climate chaos. And they’re countering the Trump administration’s heedless backing of polluters.”

On Capitol Hill, there’s bipartisan backing for tackling the potent chemicals.

In February, Sens. Tom Carper (D-Del.) and John Kennedy (R-La.) introduced legislation calling for EPA to ban HFCs. The “American Innovation and Manufacturing Act,” S. 2448, would essentially bypass the courts and provide a legislative path for phasing out the chemicals.

Carper, an outspoken climate hawk, is tailoring his pitch to a president who cares about keeping jobs on American soil.

“I’ll continue fighting for passage of my bill with Senator Kennedy that would phase down HFCs contributing to human-caused climate change and provide certainty to American manufacturers working to advance and export new technologies,” Carper said in a statement to E&E News.

“It’s a win-win for our environment and for American jobs.”