Senate bill challenges China’s status as a developing country in new treaty

Most UN environmental treaties are bad business for the United States, and some are even worse because they give China a competitive advantage by classifying it as a developing country and treating it with more indulgence. In response, a group of senators presented the Ending China’s Unfair Advantage Act of 2022 (S. 5037), which would take the long-awaited decision to rescind China’s status as a developing country.

Unfortunately, it took the ratification of another bad environmental treaty to trigger this bill. On September 21, the Senate ratified the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer. The Kigali Amendment is a climate change treaty targeting hydrofluorocarbons (HFCs), a widely used class of refrigerants. This treaty, backed by all Senate Democrats and enough Republicans to pass it, will cost consumers dearly. HFCs are the refrigerants needed to run most air conditioning and refrigeration equipment currently in use, and limiting their supply will increase their prices and skyrocket repair costs while increasing the cost of new systems.

Opportunistic companies, led by Honeywell, which has patented a series of expensive substitutes for HFCs, have joined forces with climate activists in a years-long lobbying effort to get the Kigali Amendment ratified, as well as to enact similar national restrictions on HFCs.

Beyond the impact on the consumer, HFCs are used by many manufacturers. This includes their use in industrial process refrigeration systems that create the cold conditions necessary for many chemical processes. HFCs are also needed to make semiconductors. For many domestic manufacturers, rising HFC prices under Kigali will represent an additional expense, and a future point may be reached where some HFCs will become difficult to obtain at any price. Additionally, switching to systems designed to use one of the HFC substitutes involves very costly installation changes.

Since the United Nations currently classifies China as a developing country under the Kigali Amendment and subjects it to much less stringent requirements, Chinese manufacturers will have access to cheap and plentiful HFCs long after supplies in the United States will have tightened. To add insult to injury, the United States is also the largest contributor to a United Nations fund that helps developing countries listedincluding China, comply with Kigali.

Senators Dan Sullivan (R-AK) and Mike Lee (R-UT) offered an amendment which made ratification contingent on the United Nations reclassifying China as a developed nation. Surprisingly, the Sullivan-Lee amendment passed unanimously, 96-0. The global treaty adopted 69-27.

Sullivan and Lee were among the senators who voted against ratification, rightly arguing that China’s privileged status was just one of many issues with the Kigali Amendment. Nonetheless, it’s a better deal now that China’s unfair advantage is seemingly coming to an end.

Ending China’s Unfair Advantage Act explicitly states that unless the United Nations follows through on China’s reclassification, the United States will no longer provide its share of funding to implement the Kigali Amendment as well as the rest of the underlying Montreal Protocol.

This bill is important in itself, but it should also lead to the questioning of other environmental treaties that accord favorable treatment to China. China also enjoys developing country status in the 1992 United Nations Framework Convention on Climate Change.

The fact that the United Nations still treats China as a developing nation is both indefensible and damaging to American interests. Ending this disparity will not solve the other problems that plague most environmental treaties, but it is an important step.

Norman D. Briggs