There's money in the air: the CFC ban and DuPont's regulatory strategy

James Maxwell and Forrest Briscoe

Business Strategy and the Environment, 1997, vol. 6, issue 5, 276-286

Abstract: DuPont, the world's dominant CFC producer, played a key role in the development of the Montreal Protocol on Ozone Depleting Substances. We argue that DuPont's pursuit of its economic interests, along with the political impact of the discovery of an ozone hole and the threat of domestic regulation, shaped the international regulatory regime for ozone‐depleting substances. International regulation offered DuPont and a few other producers the possibility of new and more profitable chemical markets at a time when CFC production was losing its profitability and promising alternative chemicals had already been identified. DuPont's organization and strategy were key to the successful leveraging of the Montreal process. For example, the Freon Division had close interaction with public officials and external groups, and benefited from the input of DuPont's external affairs department. This positioned DuPont to exploit the situation when regulatory discussions were stepped up. From a public policy perspective, the Montreal process offers a valuable example of harnessing diversity in industry: some producers stood to gain more from the envisioned regulations than others. Such industry heterogeneity provides frequent opportunities for coalitions of ‘the green and the greedy’, such as that between DuPont and environmental interests. Methods to encourage potential industry winners into supporting environmental initiatives deserve further attention. © 1997 John Wiley & Sons, Ltd and ERP Environment.

Date: 1997
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