February 7, 2007

Statement of the Chief Officer of the Multilateral Fund at the 24th Governing Council of UNEP

The Multilateral Fund: A culture of success.

A statement to the 24^th Session of the UNEP Governing Council by Maria Nolan, Chief Officer of the Secretariat of the Multilateral Fund for the Implementation of the Montreal Protocol.  7 February 2007

Thank you Mr. President.

 Distinguished delegates, ladies and gentlemen,

The Multilateral Fund is the single largest Trust Fund within UNEP, with a total income of over US$ 2.1 billion as of November 2006.   Donor countries have demonstrated their commitment to the objectives of the Montreal Protocol by paying around 90 percent of their pledged contributions to the Fund.  With that, 83 % of projects approved by the Fund have been completed and technical assistance and capacity building has been provided to 141 developing countries. Most of these countries are currently in compliance with the Protocol

The creation of the Multilateral Fund for the Implementation of the Montreal Protocol in 1990, to assist developing countries to comply with the control measures of the Protocol, marked the start of a new approach to solving global environmental issues.   Through an unprecedented model of global cooperation, the Fund’s ongoing efforts provide for the building of capacity, access to technology and empowerment of governments in developing countries to enable them to take on their responsibilities to implement the Protocol. The achievements of the Multilateral Fund are justifiably cited as a prime example of successful international environmental cooperation.

In the 1990’s the primary objective of the Multilateral Fund was to slow down and inhibit the growth in the consumption and pro­duction of ozone depleting substances (ODS) in developing countries. The Fund prioritized projects based on the most cost-effective use of funds per volume of controlled substances to be phased out. It also provided incentives to coun­tries that enabled closure of plants producing ODS and discouraged the establishment or expansion of the industries using them. The effective intervention of the Fund in these years succeeded in stunting the growth in consumption of ODS in developing countries.

Today in the year 2007 the overwhelming majority of developing countries are now well‑positioned to comply with the impending control measures for ODS set by the Montreal Protocol and we can rightly celebrate its 20^th anniversary.  Yet despite this considerable success I must express a few words of caution. So far the Fund’s work has been relatively straightforward but there are still substantial challenges ahead.

One particular area of concern to the Multilateral Fund is the phase-out of CFCs by 2010 in the refrigeration servicing sector in developing countries.  The Fund is doing its utmost to ensure plans for CFC phase-out in all countries are approved (particularly for small consuming countries), funded and implemented in a timely manner. Despite this, it will be a considerable challenge to tackle the estimated 119 million vehicles being cooled by CFCs or the 500 million CFC refrigerators currently in use in developing countries.  This phase-out must also be achieved without causing negative economic and social consequences, in particular to the smaller sector industries and workers affected.  

Another major concern is that the production and use of HCFCs in developing countries is increasing at a considerable pace since there are no restrictions on their growth in these countries until 2015.  Not only are HCFCs ozone depleting substance but they also have a very high global warming potential compared to CO₂.

Further, sustaining planned decreases in consumption and maintaining zero consumption in developing countries is also an emerging challenge.  The co-existence of legal versus controlled uses of some of the substances controlled under the Montreal Protocol, specifically carbon tetrachloride and methyl bromide, means that there is a real risk of a cross over from legal to illegal use.  The current oversight systems will therefore need to be reinforced and to continue beyond the Protocol’s phase-out dates if compliance is to be monitored and sustained. Increasing stockpiles of ODS could also be a source of unauthorized trade in these substances across borders, particularly in the absence of functioning national import-export licensing controls and inter-regional information exchange. 

Finally, your investments, both in developed and developing countries, in national capacities and infrastructure, namely, the ozone units that enabled countries to take ownership of their national ozone protection programmes, must not be lost after 2010.  Not only will this infrastructure aid the monitoring of compliance with the Montreal Protocol,  but could be used to assist developing countries in the management of national environmental matters.

Mr. President, distinguished delegates, thank you for your attention.