Danfoss Sees Opportunities After COP15

Maritime Activity Reports, Inc.

January 6, 2010

Although the delegates to the 15th United Nations Climate Change Conference (COP15) Dec. 7 - 18 in Copenhagen failed to agree on a legally binding replacement of the Kyoto Protocol, many opportunities already exist to save energy and reduce carbon emissions through improved energy efficiency in homes, schools, offices and other commercial buildings.

"While it's true that the removal of political and economic barriers would provide a significant boost to global energy efficiency, it's important to remember that many of today's technologies produce the desired effect -- improving energy efficiency, saving money and reducing carbon emissions in the process," said Robert Wilkins, president of Danfoss North America.

Danfoss, an official sponsor of COP15 through its association with the Confederation of Danish Industry (DI), co-sponsored a reception in Copenhagen immediately following the Alliance to Save Energy (ASE) forum on Dec. 14. U.S. Energy Secretary and Nobel Prize winner Dr. Steven Chu addressed the reception and reiterated the Obama Administration's emphasis on energy efficiency, "...not just as low-hanging fruit, but as fruit already on the ground," ready to be picked up. Sec. Chu went on to say, "Energy efficiency means saving money as well as saving the planet."

"The increased emphasis on energy efficiency will provide a boost for our industry, leading to both job creation and energy savings," Wilkins remarked. "With the appropriate incentives, millions of old, inefficient air-conditioning, heating and refrigeration systems in the field could be replaced with today's much more efficient equipment or tomorrow's super-efficient equipment being developed today utilizing variable frequency drive (VFD) technology."

One incentive already benefitting Americans is the result of The American Recovery and Reinvestment Act of 2009. This legislation provides tax incentives to homeowners -- credits as high as 30 percent of the installed cost, or up to a total of $1,500 of residential projects installed from Jan. 1, 2009, through Dec. 31, 2010 -- for qualified improvements with high-efficiency heating and air-conditioning systems.

Prior to his appearance at the ASE reception, Sec. Chu announced a $350m initiative, the Climate Renewables and Efficiency Deployment Initiative, designed to encourage the rapid deployment of renewable energy in developing countries. He pledged that the United States will contribute $85m to the fund.

According to Wilkins, the broader the applications of energy efficient technologies, the greater the benefits would be. "The implications for the United States alone are significant," he noted. "Improved energy efficiencies means reducing our dependence on foreign energy supplies, increasing energy security, improving our balance of trade, reducing the toll that energy costs have on our economy, and reducing surface pollution."

But, the United States is only one player in a global team needed to reach agreement on actions for reducing global greenhouse gas emissions. Albeit controversial, the Copenhagen Accord, which was drafted and released on the final day of the Conference, cites critical, though non-legally binding, agreements seeking cooperation between developed and developing countries. The Accord notes the importance of a low-emission strategy for sustainable social and economic development while combating climate change.

In its most recent draft, the Accord calls, in part, for the following:
-- Global emissions cuts of 50 percent (based on 1990 levels) by 2050;
-- Emissions cuts by developed countries of 80 percent by 2050;
-- A commitment of $30 billion from developed countries in 2010-2012 to help developing countries adapt and meet goals.

Regarding mitigation actions by developing countries, the Accord does not contain any specific emissions reductions objectives. It mainly elaborates on the measurement, reporting and verification of developing country actions, which was one of the major stumbling blocks in the negotiations leading to Copenhagen.

The Accord contains a compromise between U.S. and China stating that there will be provisions for 'international consultations and analysis.' And, what experts believe to be the most successful part of the Accord relates to short and long-term financing -- $30b from 2010 - 2012 and an additional $100b a year by 2020 will be mobilized from a variety of sources.

The Copenhagen Accord, however, did not agree on specifics for controlling and phasing down high global-warming-potential (GWP) HFC (hydrofluorocarbon) refrigerants. Earlier, the U.S., Canada and Mexico formally proposed including HFCs in the Montreal Protocol, which has been a very effective global process for reducing ozone-depleting substances including CFC (chlorofluorocarbon) and HCFC (hydrochlorofluorocarbon) refrigerants. That proposal has been supported by the European Union and other countries, and is expected to advance during 2010 regardless of the broader climate change issue.

"While Copenhagen did not produce a legally-binding global Climate Change agreement," Wilkins concluded, "it certainly heightened awareness that energy efficiency is the most viable way to reduce carbon emissions, while saving money and reducing dependence on volatile foreign energy sources."

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