SMITHMYER: How Mobile AC Credits Protect the Environment and Business from China

One of the ways the United States responds to China’s flouting of global trade norms is by creating regulations to ensure that China plays by maintains certain standards when operating within the United States. It’s a consideration that the Trump administration should keep in mind as it continues its review of Obama-era regulations on auto emissions. Claiming the mantle of “deregulation,” Chinese corporations and their U.S. counterparts are lobbying the EPA to overturn mobile air conditioning (MAC) credits. Doing so would provide little benefit to U.S. companies, but would allow China to flood the market with dangerous coolants.

Few regulations have been as effective in curbing Chinese dumping into the United States as MAC credits. When the EPA ruled that HFO-1234yf (also HFC-152) was an acceptable coolant for automotive air conditioners—and removed CFC-12 and HFC-134a from the list acceptable coolants—the United States surpassed the Chinese as the lead producer of high efficiency cooling systems and ultimately became the global leader in advanced refrigerant products.  The EPA ruling against “dirty” coolants prevented the Chinese from dumping cheap coolants based on fluorspar, which they have a large supply of, on the United States market. Companies instead were incentivized to use American-made coolants that comport to higher environmental standards than fluorspar-laced coolants imported from China. 

Coolant is a dangerous substance that the world has seemingly forgotten about since the 1980’s.  Modern environmentalists focus their attention on the carbon-monoxide and carbon-dioxide output of nations to advance their broader climate change agenda, ignoring the problems that chlorofluorocarbons (CFCs) have caused since the late 1970’s and early 1980’s.  It was CFCs that caused the hole in the Ozone Layer, a scar on the environment that has not healed yet. In January 2018, Newsweek reported, “We see very clearly that chlorine from [CFCs] is going down in the ozone hole, and that less ozone depletion is occurring because of it.” 

MAC credits in fact are helping the environment more than residential or commercial regulations on air conditioners.  Residential and commercial air conditioners have more coolant, but the odds of a unit being damaged are very low. Yes, a tree may fall on the system, someone may drill into the line set or a lawnmower may chuck a stone through the coils, but the likelihood of them being damaged is very low.  Conversely, automobile air conditioners are in a position where a slight accident or a jostle from a deep pothole could create a slow leak, letting coolant into the atmosphere at a steady rate.  When this happens in one car, this is not significant; however, with an estimated 17,250 automobile accidents in the United States alone, those small leaks add up.  By removing the MAC credit, companies would no longer have incentives to reject the Chinese coolant. With each pothole, fender-bender or major accident dangerous coolants would be released into the environment.

Lobbyists are now citing conservative rhetoric about “deregulation” to convince lawmakers to repeal the MAC credits. MAC credits, however, should not be conflated with the regulations the Trump administration is targeting to unleash economic growth. U.S. companies have already adjusted to the MAC credits, with the net effect of advancing U.S. competitiveness while protecting the environment. The effort to repeal the MAC credits has less to do with “deregulation” and more with Chinese companies and globalist cronies seeking to legitimate Chinese trade practices. Combating these abuses are the cornerstone of President Trump’s “America First” promises.

The MAC credit is a baby in danger of being thrown out with the bathwater of the onerous environmental regulations the Trump administration is removing. The MAC credit program has been effective in curbing Chinese dumping, and is doing so in a way that encourages companies to use cleaner, less environmentally damaging chemicals. 

– Christopher Smithmyer is an adjunct professor of business at Penn State University in their World Campus and an adjunct professor of Business at the University of South Florida St. Petersburg’s Business School. He holds an LLM in International Environmental Conflict.

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