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Rasha Rehman headshot

4 Reasons Why Companies Should Embrace the Kigali Amendment

The Kigali Amendment, which seeks to phase out HFCs in 30 years, is an opportunity for businesses worldwide - here are 4 reasons why.
By Rasha Rehman
Kigali Amendment

When you think of climate change and earth’s depleting ozone layer, you may associate it with carbon dioxide (CO2). But the hydrofluorocarbons (HFCs) lurking in our atmosphere are by many estimates more than 100 times more potent than CO2. One addition to the Montreal Protocol, the Kigali Amendment, came into effect January 2019 with the goal to gradually phase out HFCs in the next 30 years. The majority of cooling appliances, including refrigerators and vehicle air conditioning systems, use HFCs, which can percolate during these items’ production and repairs, if they are not disposed properly.

Prolonged and unusual heat waves and thunderstorms increase demand for products in the HVAC (heating, ventilation and air conditioning) industry. This demand is spiking global electricity usage, which is expected to make up nearly a quarter of global electricity consumption by 2050.

The Kigali Amendment is estimated to prevent a 0.4 degree Celsius rise in global temperature by 2100 while protecting the earth’s ozone layer. The first phaseout was expected by developed countries like the U.S in 2019, followed by a freeze by such countries like China and finally, a reduction by all remaining countries by 2028.

If greenhouse gas emissions are not reduced by 2050, temperatures are expected to increase by at least 5 degrees in the U.S. This can result in catastrophic effects on people, the environment and businesses.  

Companies and their industries must take the Kigali Amendment seriously. Here’s why:

Opportunities to lead in new markets

The Kigali Amendment one part of the global effort to tackle climate change and industries are already moving towards achieving the United Nations’ sustainable development goals (SDGs).

Turbulent weather will undoubtedly damage infrastructure, factories, alter transportation and affect the production and cost of materials. As products using HFCs are phased out, global companies will compete to become pioneers of clean, efficient and innovative technologies that can either replace HFCs products or reduce their damage.

The global HVAC industry is expected to more than double in the next decade creating new markets of opportunity. To that end, the Air-Conditioning, Heating and Refrigeration Institute pledged $5 billion from 2015 to 2025 for research, development and investment toward Kigali-friendly products.

Creating sustainable, impactful and socially responsible jobs

In the southern U.S., extreme weather is expected to reduce economic productivity by 3 percent and result in up to $160 billion worth of lost wages. By adhering to the Kigali Amendment, businesses and entrepreneurs can tap into new, eco-friendly and energy consumption industries while creating sustainable, impactful and socially responsible jobs. In fact, U.S implementation of the amendment is estimated to create 33,000 direct jobs and 117,000 indirect new jobs. This amendment hence offers an opportunity to rethink the HVAC industry, employment and global economic growth.

Rising global temperatures disrupt agriculture, health and environmental wellness

Extreme weather has ramifications for not only a country’s economic growth but also its infrastructure, citizens’ health, and environmental wellness.  It is estimated that global cooling-related greenhouse gas emissions will increase as much as 15 percent by mid-century. The resulting risks could disrupt wildlife, drown or reduce crops, overwhelm flood infrastructure and have a huge effect on people's health. These rising temperatures also will drive demand for electricity. If industries can pivot, redesign and tackle rising global temperature, its solutions would be monumental and sustainable in the future.

The Kigali amendment can burnish brand reputation

Coming up with solutions to one of the most pressing global issues of today is exciting and empowering. To achieve the Kigali Amendment’s goals, new products and technologies could become a vibrant part of global trade. Participating research and development organizations, businesses and thought leaders will achieve brand recognition for their contributions.

And it’s already happening. One startup, and finalist of the Global Cooling Prize contest, Transaera, is developing affordable and energy efficient cooling systems. Another startup, SkyCool Systems, sees potential in the development of rooftop cooling mirrors.

The Kigali Amendment is challenging us to rethink the technology on which we are dependent. A directive that can result in new jobs, improved technology and the securing of health and environmental wellness is the direction we must move towards. If acted upon immediately, this amendment can halt the catastrophic environmental predictions and create prosperous, sustainable businesses. It’s a win-win for the planet and our economy.

Image credit: Tim Mossholder/Unsplash

Rasha Rehman headshot

Rasha is a freelance journalist with experience in external communications and publicity. She is a Ryerson School of Journalism graduate and has worked on various media and communication campaigns in film, home development and the nonprofit sector. Rasha is passionate about storytelling for impact, whether she focuses on social enterprise, transforming our food system or making the business world more inclusive.

Read more stories by Rasha Rehman