Tutorial 5: Simple Policies

Motivation

Now that ABC Country has a solid business-as-usual baseline, let's explore policy interventions. In this tutorial, we'll add a sales permitting system that progressively reduces HFC-134a consumption in domestic refrigeration. However, that demand will not go away but, instead, will shift to the lower-GWP R-600a alternative.

Adding R-600a Imports

Before implementing our policy, let's first add import flows for R-600a to match the supply chain pattern we established for HFC-134a in Tutorial 4.

For Domestic Refrigeration, modify your R-600a consumption record:

• General tab: Enable "Import" (in addition to existing manufacture)
• Equipment tab: Add 0.07 kg/unit for import (same as manufacture)
• Set tab: Split your existing 2 mt by reducing domestic to 1 mt in year 2025 and adding import of 1 mt in year 2025.
• Change tab: Ensure your selection uses all sales which, as a reminder, refers to all consumption (in our case, both domestic and imports).

This gives R-600a a similar import/domestic split as HFC-134a, making the displacement mechanism clearer when we implement the policy.

Adding the Sales Permitting Policy

Now let's create ABC's permitting system that targets HFC-134a in domestic refrigeration, where displaced demand will shift to R-600a.

• Click Add Policy. Name it "Sales Permit". Then, select Domestic Refrigeration as the application and HFC-134a as the substance.
• Go to the Limit tab within your HFC-134a policy configuration and click Add Limit. Then, Cap all sales to 85% (or equivalently 85% prior year) during years 2029 to 2034.
• Displacing means that the demand lost from HFC-134a is then sent to another stream or substance. In this case, let's have it go to R-600a instead. Leave the displacement type as "displacing" for now. We'll discuss the other displacement options in a moment!
• Click Add Limit again. Set Cap on sales to 0 kg displacing R-600a starting in year 2035 (to onwards). This will conclude the phase-out.
• Click Finish to finish the policy

Creating the Permit Simulation

Now let's create a simulation to see how the permitting policy compares to business-as-usual.

• Click Add Simulation.
• Name it "Permit"
• Check the Sales Permit policy checkbox
• Set duration from years 2025 to 2035
• Click Finish

The simulation will now show both your original BAU and new Permit scenarios side by side.

Results

Let's observe how:

• HFC-134a consumption starts dropping in 2027 and goes to zero in 2035
• R-600a consumption increases to compensate for the HFC-134a reduction
• Emissions see a drop or a leveling off.

Specifically, under the Substances view with Permit selected under the Simulations radio button, you can see how displacement works: as HFC-134a is restricted, R-600a scales up proportionally. Since R-600a now has both domestic and import sources, the displaced demand gets distributed across both supply chains.

All that said, remember that without Attribute initial charge to importer checked, the visualizations show only the substance flows for servicing imported equipment, not their initial charge. Before finishing up, let's just quickly check that box once more and:

• Select the Simulations radio button
• Select All simulations
• Select the Consumption radio button
• Use the configure custom link to combine imports and domestic production.

The lines almost perfectly overlap when Attribute initial charge to importer is checked but are a little further off without it, especially in 2035. This is because, as the import / domestic ratios (and their growth rates) are slightly different for R-600a and HFC-134a, the trade attribution causes the numbers to shift around a bit even though the total global-level picture is essentially balanced. That said, in any case, there are very minor differences expected due to servicing differences between equipment.

As a teaser for later, you might notice that the equipment count is higher in the permit case than BAU. This is because we are assuming displaced volumes of substance. As the initial charge for R-600a is lower than HFC-134a, that results in more equipment. Depending on what you assume economically, this might be incorrect.

We will investigate this topic in more detail in Tutorial 8 but you can modify this behavior already if you would like. When we used "displacing" in our permitting policy, we relied on default "equivalent" behavior that matches whatever units were last used. As we are working in kg and mt right now, this used "displacing by volume" in the change tab. Switching to "displacing by units" in that dropdown allows you to diplace equivalent equipment population rather than substance volumes.

Conclusion

You've successfully implemented ABC Country's first policy intervention! The sales permitting system demonstrates:

• Targeted approach: Here we focused on the highest-impact substance (HFC-134a) first.
• Progressive reduction: Gradual reduction then complete phase-out.
• Market mechanisms: Displacement ensures demand shifts to R-600a rather than disappearing
• Supply chain realism: R-600a displacement works across both domestic and import channels
• Climate benefits: Emissions reduction through GWP-focused targeting (1,430 to 3 kgCO2e/kg)

The permitting system shows how a relatively simple policy can achieve significant impacts. This is also a very simple model but we are already incorporating socioeconomic projections and substance interactions.

Download the completed tutorial result at tutorial_05.qta which contains the complete model with sales permitting policies and displacement effects. It differs from the prior tutorial result in that it adds a policy intervention.

Next Steps

Tutorial 6 will add a recovery and recycling program targeting the same HFC-134a domestic refrigeration sector. You'll learn how recycling policies complement demand-side restrictions by providing alternative supply sources, and explore how multiple policies work together to achieve comprehensive overall outcomes.

Previous: Tutorial 4 | Return to Guide Index | Next: Tutorial 6