Date: Sat, 18 Jun 1994 23:07:08 -0400 (EDT) From: Competitive Enterprise Institute Subject: CEI LIST - ENVIRONMENTAL BILLS COME DUE To: Jeff Chan ENVIRONMENTAL BILLS COME DUE By Ben Lieberman, CEI's environmental research associate appeared in *The Journal of Commerce*, 5/26/94 In the next four months, about 25 million Americans will get a lesson in environmentalism, and they will not like what they learn. By now, most people have heard about the thinning of the ozone layer, and the phaseout of chlorofluorocarbons (CFCs), a widely used class of refrigerants believed to cause the damage. But few have any idea what it will cost to eliminate CFCs, and more importantly, who is going to pay for it all. For the 25 million car and truck owners whose air conditioners will need fixing this spring and summer, the answer will be painfully clear. CFC-12 is the refrigerant used in most of the air- conditioned vehicles now on the road. The costs of servicing these air conditioners has increased, due in part to the dwindling supply of CFC-12. Although the total ban on CFC production does not begin until the end of 1995, production restrictions are already in effect. In 1994 and 1995, chemical companies can produce no more than 25% of what they made in 1986. Heavy CFC taxes have further increased the price. Consequently, CFC-12, which cost less than $1 a pound a few years ago, now retails for $16 or more a pound. An inoperative air conditioner may require up to 3 pounds of CFC-12. As a result of EPA regulations to prevent any CFCs from escaping during servicing, labor costs also have increased. The government has outlawed the sale of small cans of CFC-12 to the public, so it is no longer possible for consumers to recharge their own air conditioners. Millions of former do-it-yourselfers will be forced, like everyone else, to take their inoperative car and truck air conditioners to an EPA-certified mechanic or dealer and pay the higher rate for a recharge. Those who service vehicle air conditioners say that they are charging $50 to $200 more than just a few years ago. Having a mechanic "top off" an air conditioner with additional refrigerant for less than $40 is a thing of the past. Today, many air conditioner repairs are as expensive as a transmission repair or brake job. Lower-income and elderly persons will be the hardest hit, as they often own older cars that need more frequent air-conditioner repairs. A new, CFC-free refrigerant is now being used in most new cars and trucks. But it cannot be used in older systems designed for CFC-12 without extensive modifications. General Motors estimates the cost of a retrofit will be between $250 and $1,000, depending on the vehicle, and there are uncertainties regarding the performance and reliability of retrofitted air conditioners. The CFC phaseout will affect consumers in other ways as well. Household air conditioners and refrigerators will be more expensive to own and maintain. Rents in air-conditioned buildings, refrigerated and frozen food prices and the cost of many other goods and services that have used CFCs may increase. Higher vehicle air-conditioning maintenance costs are only the first of several unpleasant surprises consumers will face. Of course, the price of this phaseout would be acceptable if it were necessary to avert ecological catastrophe. But a growing number of scientists are saying that both the imminence and the severity of ozone depletion have been exaggerated. The worst-case scenarios, which have driven the policy debate, are far from being realized. And even if they eventually come true -- which appears unlikely to many scientists -- that will not mean disaster. Under the worst-case scenario, the expected increase in ultraviolet radiation would be approximately 10%. Since ultraviolet radiation naturally increases 5,000% from the poles to the equator, this increase would be no greater than the ultraviolet increase experienced by moving 50 to 100 miles closer to the equator, say from New York City to Philadelphia. As one commentator noted, ozone depletion seems more a nuisance than a catastrophe. Thus, just as people begin to be hit in the wallet by the rapid CFC phaseout, they will learn that it may not have been necessary. A slower and more sensible retreat from CFC use would have provided adequate environmental protection at a considerably lower cost. Requiring new vehicles to use non-CFC refrigerants, without imposing any restrictions on those already on the road, would have been a less expensive way to achieve the same goal. Since cars and trucks have a 10% annual attrition rate, there would be few CFC-using vehicles left within a decade. Unfortunately, in fashioning the CFC phaseout, political and environmental leaders gave little thought to the impact on consumers. By EPA's estimate, the total cost of all environmental regulations will be more than $150 billion this year. Most of these costs are indirect, and the public is not aware of the causal relationship between environmental regulations and their own finances. But when 25 million people try to get their vehicle air conditioners fixed, many will learn, for the first time, that runaway environmentalism can be expensive. It will be a costly lesson, but one that may be necessary to restore reason to our nation's environmental policies. _______ __________ ___________ / | / | | | |__________ | | | | \ | | \ _______ |__________ ___________ COMPETITIVE ENTERPRISE INSTITUTE 1001 Connecticut Ave. NW #1250 Washington, DC 20036 202-331-1010, fax 202-331-0640 Permission to copy granted as long as these lines are left intact. To subscribe to the cei list, send a message to cei@digex.com. "The Virtual Hand: CEI's guide to the information superhighway" is available for $5. CEI's monthly newsletter, "CEI UpDate," is free to contributors of $25.