In Partnership with Economic Impacts of U.S. Ratification of the Kigali Amendment Report Prepared for the Air-Conditioning, Heating, & Refrigeration Institute and the Alliance for Responsible Atmospheric Policy April 19, 2018 Final Report Economic Impacts of U.S. Ratification of the Kigali Amendment For more information about the report, please contact: Douglas S. Meade, Ph.D. Executive Director Inforum (301) 405-4608 [email protected] JMS Consulting in Partnership with: Inforum www.inforum.umd.edu Prepared for: The Air-Conditioning, Heating, and Refrigeration Institute 2111 Wilson Blvd, Suite 500 Arlington, VA 22201 and Alliance for a Responsible Atmospheric Policy 2111 Wilson Blvd., 8th Floor Arlington, VA 22201 Blank Page Economic Impacts of U.S. Ratification of the Kigali Amendment Table of Contents Abbreviations .................................................................................................................................................... iv List of Tables ....................................................................................................................................................... iv List of Figures ....................................................................................................................................................... v Executive Summary .......................................................................................................................................... 1 Background on the Kigali Amendment .................................................................................................... 1 Industry Summary .......................................................................................................................................... 2 Industry Segments ...................................................................................................................................... 4 Industry Trends ............................................................................................................................................ 5 Impact of Kigali Ratification ........................................................................................................................ 6 Jobs and Economic Output .................................................................................................................... 6 Global Trade ............................................................................................................................................... 7 Conclusion ...................................................................................................................................................... 9 1. Introduction .............................................................................................................................................. 10 1.1 Study Objectives ................................................................................................................................... 10 1.2 Background ............................................................................................................................................ 11 1.3 Footprint, World Trade, and Scenario Analysis ................................................................................ 11 2. Current Economic Footprint .................................................................................................................. 12 2.1 Overview ................................................................................................................................................. 12 2.2 Industry Segments .............................................................................................................................. 13 2.2.1 Manufacturing Industries .............................................................................................................. 13 2.2.2 Repair and Maintenance ............................................................................................................. 14 2.2.3 Wholesale ........................................................................................................................................ 15 2.2.4 Contractors...................................................................................................................................... 15 2.3 Historical Data ........................................................................................................................................ 16 2.3.1 Shipments and Receipts ............................................................................................................... 16 2.3.2 Employment .................................................................................................................................... 17 2.4 Indirect and Induced Impacts ........................................................................................................... 20 2.4.1 Definition of Indirect and Induced Impacts ............................................................................. 20 2.4.2 Results for Manufacturing ............................................................................................................. 20 2.4.3 Results for Downstream Industries ............................................................................................... 21 2.4.4 Results for Manufacturing and Downstream Combined ....................................................... 21 3. World Trade Summary............................................................................................................................. 22 3.1 Current US Imports and Exports .......................................................................................................... 22 3.1.1 Fluorocarbons ................................................................................................................................. 22 3.1.2 Air-conditioning and Refrigeration Equipment ........................................................................ 23 ii Economic Impacts of U.S. Ratification of the Kigali Amendment 3.2 The World Export Market .................................................................................................................. 26 3.2.1 Fluorocarbons ................................................................................................................................. 26 3.2.2 Air-conditioning and Refrigeration Equipment ........................................................................ 26 3.3 World Market Outlook ....................................................................................................................... 28 4. Scenario Analysis ..................................................................................................................................... 28 4.1 Framing of the Analysis and Assumptions ........................................................................................ 28 4.2 Impact Analysis .................................................................................................................................. 31 5. Summary and Main Findings ................................................................................................................. 34 References........................................................................................................................................................ 38 Appendix A – Data Sources and Methodology ..................................................................................... A-1 A.1 Data Sources ....................................................................................................................................... A-1 A.2 Methodology for the Economic Impact Analysis ........................................................................ A-6 A.3 The UN Comtrade Database ........................................................................................................... A-7 A.4 Questionnaire for Industry Experts ................................................................................................... A-8 A.5................................................................................................................................................................. A-9 Kigali Specified Controlled Substances .............................................................................................. A-10 A.6 Principal Investigators ...................................................................................................................... A-11 Inforum iii Economic Impacts of U.S. Ratification of the Kigali Amendment Abbreviations A5 Classification for Developing Economies (Article 5) AHRI Air-Conditioning, Heating, and Refrigeration Institute ARAP The Alliance for Responsible Atmospheric Policy BEA Bureau of Economic Analysis BLS Bureau of Labor Statistics CAA Clean Air Act CFC Chlorofluorocarbon EC Economic Census EPA Environmental Protection Agency GDP Gross Domestic Product GHG Greenhouse Gas GWP Global Warming Potential HCFC Hydrochlorofluorocarbon HFC Hydrofluorocarbon HFO Hydrofluoroolefin HS Harmonized System HVACR Heating, Ventilation, Air-Conditioning, and Refrigeration INFORUM Interindustry Forecasting at the University of Maryland IO Input-Output MAC Mobile Air-Conditioning NAICS North American Industry Classification System ODP Ozone Depleting Potential ODS Ozone Depleting Substance SNAP Significant New Alternatives Policy (EPA) UNEP United Nations Environment Program