When economic incentives helped fix the ozone layer hole : The Indicator from Planet Money In the 1980s, a massive hole was discovered in the ozone layer. Since then, economic incentives, innovation, and a historic United Nations conference in Montreal set it on a path to close completely.

The Other Climate Crisis

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Darian Woods, welcome back to THE INDICATOR.


GARCIA: Darian, you have come to us with a story that you've co-reported with your colleague Kenny Malone, also from Planet Money. And I got to say it's kind of a hopeful story. It's about the economics of fixing the climate.

WOODS: It's true because we have actually solved a climate crisis before. So Kenny and I talked to a guy who had solved that crisis, Philip Woollaston.

KENNY MALONE, BYLINE: So can you point to the sky and tell us where the hole in the ozone layer was?

PHILIP WOOLLASTON: That a-way (ph). South is there.

MALONE: So, like, we're about as close as we could possibly get to where the hole in the ozone layer was.

WOOLLASTON: In New Zealand, you are as close to where the hole was as you could get in a modern country.

GARCIA: Darian, I remember the hole in the ozone layer. It was a huge deal back in, like, the '80s in my childhood. I remember people yelling at others about not using Aqua Net hairspray or something like that because the chemicals might grow the hole in the ozone layer.

WOODS: Yeah. I mean, I remember that, and we don't really talk about it anymore, kind of because we solved the problem. And one of the big reasons we solved the problem was thanks to economics.

GARCIA: Thanks to economics, solving big global problems - and we should be clear. This was not a global warming problem. But from what you just told me, there actually might be some lessons from this episode in history for how to deal with climate change. So after a quick break, I'm going to let you and Kenny take the story from here.


WOODS: Think of the ozone layer as the Earth's beach umbrella. It's this layer of naturally occurring O3 molecules high, high up in the stratosphere. These ozone molecules protect us from the sun. And without them, we'd have much higher rates of skin cancer.

MALONE: Yeah, and at the start of the show, we were in New Zealand, like, looking up at the Earth's invisible beach umbrella with the guy who helped fix the hole. And to get to how he did that, we need to start with a completely different person, a scientist all the way over in the U.K. named Jonathan Shanklin. He is the one who first sounded the alarm.

JONATHAN SHANKLIN: It went, really, from the first hints in our data to over half the ozone layer over Antarctica disappearing in just 10 years, as time short as that.

MALONE: Now, Jonathan helped discover this hole in the early 1980s. And the primary culprit, it turned out, was a group of chemicals mostly under the umbrella of a name that I never pronounce correctly. Darian, I'm just going to make you do it.

WOODS: Big pressure - chlorofluorocarbons.

MALONE: There you go. OK, yes - henceforth, CFCs, yes.

WOODS: Billions of pounds of this stuff was made every year to use as an aerosol propellant for bug spray and fire extinguishers. There were also refrigerants in air conditioners and fridges.

MALONE: CFCs were seen as this kind of wonder chemical at the time because they were cheap. They were non-toxic. They were nonreactive, at least, you know, down here on the human plane because when they floated up into the stratosphere, they were reactive and toxic for the ozone molecules, as Jonathan Shanklin discovered.

SHANKLIN: It's really sending a very big message to the world that it is ever so easy to change our environment in ways that we're not anticipating.

MALONE: So when Jonathan published his findings in the mid-1980s, it was like a giant red flag for people to do something about this problem. You know, he was a scientist, and he needed politicians to do their thing.

WOODS: Politicians like Philip Woollaston - Philip was an environment minister in New Zealand when all of this came to light. And because his country was right next door to Antarctica and to that growing hole in the ozone layer, he felt a different kind of urgency when he read about this new discovery.

WOOLLASTON: That in New Zealand got a lot of coverage because we would have an absolute plague of melanoma and other skin cancers. We were right there in the sights.

WOODS: I was right there in the sights, Kenny.

MALONE: Yes, Darian, our resident Kiwi, it's true. The stakes were high for him but for the whole world, really, because if this ozone hole wasn't fixed, like, the world was possibly looking at over 100,000 additional deaths from melanoma every year by the year 2020. And that's not even taking into account the kinds of damage that the extra strength from the sun could do to animals and entire ecosystems, really.

WOODS: The United Nations took notice and, in 1987, convened a huge meeting in Montreal with representatives from all over the world, including Philip. The goal was to get an agreement to phase out those groups of chemicals destroying the ozone.

MALONE: Which is not an easy task because for one thing, there were 200,000 American jobs tied to making CFCs, so that's one problem. But also, Philip says there were other reasons they couldn't just declare, you know, like, no more CFCs - a total ban.

WOOLLASTON: Well, ban everything tomorrow - boom. And, you know, that would have cost lives.

MALONE: Wait - lives.

WOOLLASTON: Yeah. I mean, you just think if suddenly all of your hospital refrigeration systems had to close down...


WOOLLASTON: ...In every country.

MALONE: OK. I see.

WOOLLASTON: Yeah. I mean, there are all sorts of implications.

WOODS: So instead, they were trying to work out some kind of phase-out where, in the first year, you might cut production by - I don't know - 20%, say, and then another 20% the next year and so on and so on until the ban finally arrives.

MALONE: Now, you know, these are gradual implementations of a regulation, and they were going to effect the chemical companies producing this stuff. And notably, in Montreal at this, you know, U.N. conference, the chemical companies were there, including American chemical companies like DuPont. And Philip remembers thinking that DuPont and other American chemical companies were kind of weirdly pro-chemical-phase-out on this.

WOOLLASTON: My suspicion has always been - and I can't recall whether I had any hard evidence - but that DuPont actually found they were further down the track to finding substitutes than anyone else was.

WOODS: And in fact, we now know that was the case. U.S. chemical producers realized that phasing out the old chemicals was good business if you're also the ones making the new chemicals - first mover advantage.

MALONE: Classic first mover advantage, which means that the other major chemical producers in the world, in Europe, did not have that advantage, which is one of the reasons why Europe, at this conference, was sort of dragging its heels with regards to these regulations. In fact, it was holding up the negotiations. Philip remembers being in a room, and the U.S. negotiator was there pushing for more regulations while the European negotiator was stalling and stalling. And Philip remembers thinking, this whole treaty is going to fall apart if someone doesn't do something.

WOOLLASTON: I had no training in diplomacy at all, and I just got pissed off at the end.

WOODS: Philip starts cross-examining this European negotiator. Late into the night, they argue about this treaty that could save the world if it's going to be agreed. And then finally, at 1:30 a.m., the European negotiator is like, OK, fine, and an agreement is reached.

MALONE: And so Philip Woollaston gets to leave that room as the man who saved the treaty, you know, sort of bleary-eyed, 1:30 in the morning.

WOOLLASTON: Walked, crawled, staggered off to bed - I hadn't had a lot of sleep for the previous 48 hours (laughter).

WOODS: The Montreal Protocol, as it's now called, is known as this pioneering, extraordinarily successful environmental treaty. The ozone hole is closing and is projected to be completely gone by about the year 2060.

MALONE: Now, regulation puts costs on businesses and on consumers for the old way of doing things, and it can have unintended consequences. But the protocol here - the Montreal Protocol illustrates this one big thing that could be useful to think about in the fight against climate change. If you make companies see the writing on the wall that real big regulation is coming, then something magical starts to happen. Those companies suddenly get very creative at finding solutions and becoming a first mover for a new market. And if they don't, then a new company will come along and do that. Clear constraints can spur innovation.

WOODS: Standing outside Philip Woollaston's house in New Zealand, we wondered how he felt about his legacy, literally helping to save the world three decades ago.

MALONE: Do you ever come out to your backyard and look south and think, that's part of my life's work - the fact that there isn't a hole there?

WOOLLASTON: Well, there's less of a hole (laughter). No, no, I don't. It's a nice thought.

MALONE: We're doing it right now though.

WOOLLASTON: Usually, if I come outside, I'll look and say, that lawn needs mowing. That tree needs trimming. There's work to do (laughter).

MALONE: Beautiful.

WOODS: We're going to put a few photos up on Instagram. You can check that out @PlanetMoney. This show was produced by Jamila Huxtable with help from Gilly Moon.

MALONE: It was fact-checked by Sean Saldana. Paddy Hirsch is our editor, and THE INDICATOR is a production of NPR. What a weird way to say NPR. Keep it, though. Keep it.

WOODS: (Laughter).


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