THE ECONOMICS OF CFCS : ISSUES AND IMPLICATIONS FOR SINGAPORE

Abstract

This Academic Exercise first addresses the issues pertaining to the CFC problem, including those related to a cost-benefit analysis of the control of CFC emissions. The Montreal Protocol, an international agreement to phase out the use of CFCs is discussed next, in terms of its implications for businesses, for example the costs of compliance. Several policy measures have been undertaken by the government to implement this phasing out. This includes a consumption quota, financial and technological assistance schemes, which are then evaluated for their effectiveness in treaty compliance without compromising the competitiveness of the economy. This AE also reviews and assesses the responses of certain affected industries like electronics, air-conditioning and refrigeration, to the government measures. Finally, some policy recommendations are discussed in the light of the speeded up timetable for the phase out.