ABSTRACT

Technological innovation, market transformation and technology transfer are critical to the success of many global environmental agreements, including the Montreal Protocol on Substances that Deplete the Ozone Layer and the Kyoto Protocol to the United Nations Framework Convention on Climate Change. The implementation of the Montreal Protocol shows that regulatory regimes that set strict standards but allow flexibility in implementation can spur competition, promote innovation, and speed the commercialization of environmentally superior technologies. This speeds the phasing out of old chemicals and technologies that are harmful to the environment. 2 The Montreal Protocol experience also demonstrates that when regulatory regimes are designed to reflect the perspectives and experiences of both developed and developing countries and are tailored to local conditions, the transition to the new technologies is easier, more cost-effective, and more environmentally and economically beneficial than maintaining the status quo.