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Cooling India with Less Warming: Examining the Business Case for Phasing Down HFCs in Room and Vehicle Air Conditioning

David Doniger

Posted November 19, 2012 in Curbing Pollution, Health and the Environment, Solving Global Warming

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As living standards rise for tens of millions of people, India is on the verge of an enormous expansion in room and vehicle air conditioning that could strain the country’s electric grid and magnify the impacts of global warming.  Choices made in the next few years about refrigerants and energy efficiency will shape whether Indian consumers, companies and government authorities can turn the challenges of the room and vehicle air conditioning expansion into business advantage and national opportunity while reducing climate change, improving air quality, and making air conditioning more efficient and less costly to operate.

Four partners – the Council on Energy, Environment and Water (CEEW), the Natural Resources Defense Council (NRDC), the Institute for Governance & Sustainable Development (IGSD), and the Energy and Resource Institute (TERI) – in consultation with the Confederation of Indian Industries (CII), the Refrigeration and Air-Conditioning Manufacturers Association (RAMA) and the Society of Indian Automobile Manufacturers (SIAM), are conducting a study of the business case for Indian companies to leapfrog or phase down unsustainable technologies based on the potent heat-trapping chemicals called hydrofluorocarbons (HFCs). 

The project team is in the midst of interviewing and consulting with Indian companies, international firms doing business in India, government officials, and other experts to better understand the business case for an HFC phase down.  The study includes exploring the market opportunities and barriers to adopting more climate-friendly alternatives while also raising air conditioners’ energy efficiency.  Based on our extensive consultations, the project team has issued a preliminary paper, “Cooling India With Less Warming,” that examines potential options for moving to a future based on climate-friendly refrigerants and energy-efficient equipment designs that will cool Indian buildings and vehicles while reducing dangerous climate change.

The paper’s preliminary findings are that: (1) Indian manufacturers are adopting or exploring a growing number of available and emerging technical options for room and vehicle air conditioning; (2) market and regulatory forces in other regions of the world are moving away from HFCs; and (3) the Indian government and international institutions have opportunities to assist Indian industries to profitably manage the transition by resolving policy uncertainties and providing financial and technical assistance. 

Here is a bit more on the paper’s findings.  If present trends continue, a perfect storm of regulatory and economic forces will drive up HFC use dramatically in India and other rapidly developing countries.  On the one hand, India and other developing countries are about to begin phasing out current refrigerants called hydrochlorofluorocarbons (HCFCs) under the Montreal Protocol because those chemicals deplete the stratospheric ozone layer.  On the other, air conditioning demand is booming as living standards rise for tens of millions of Indian citizens.  Room air conditioner sales in India are growing at 30 percent per year and the total number of units in use in India may reach 200 million – nearly 10 times the current number – by 2030.    

HFCs are not ozone depleters.  But many of them are potent greenhouse gases with high “global warming potential” (GWP).  If India and other countries choose high-GWP HFCs to replace the HCFCs, the air conditioning boom will contribute to a large increase in global production and emission of these climate-changing gases.  While they are only one or two percent of today’s greenhouse gas inventory (on a carbon dioxide equivalent basis), scientists project that they could account for 20 percent or more of the world’s heat-trapping burden by 2050, erasing the climate change bonus delivered by the Montreal Protocol. 

As I’ve written here, domestic policies are being introduced in Europe, North America, Japan, Australia, and other nations to limit and reduce HFCs while increasing energy efficiency standards.  Internationally, proposals have been made under the Montreal Protocol to gradually phase HFCs down over several decades, on a differentiated schedule for developed and developing countries.  While India has opposed those proposals in recent Montreal meetings, world leaders endorsed a gradual HFC production and consumption phase-down at the Rio+20 Summit last June, and the issue is likely to remain on the international agenda. 

Based on consultations so far, the paper reviews a number of alternative refrigerants – both fluorocarbon and non-fluorocarbon – that Indian and foreign firms are already commercializing or planning to introduce.  For room air conditioners, the paper finds that alternatives include hydrocarbons (such as propane, used in air conditioners made by Godrej & Boyce), and medium potency HFCs (such as R-32, used by Daikin and Panasonic).  Over the next few years, these solutions will become the norm in developed country markets, and they are also gaining market share in other big developing country markets such as China, a consideration for Indian companies wishing to participate in the export trade.

For car air conditioners, the paper reviews the coming transition from high-GWP HFC-134a to low-potency alternatives (with GWPs less than 150 and as low as 4) in Europe, North America, Japan, and other markets.  While most cars manufactured in India are for the rapidly growing domestic market, some Indian and international firms build cars in India for export to markets where 134a will soon be obsolete.  In interviews with Indian car and component makers, the project team explored the considerations that will go into their choice of refrigerants for the domestic and export markets. 

The paper preliminarily examines policy issues before the Indian government on the choice of replacements for HCFCs, energy efficiency standards, and other matters.  It explores some areas where the Indian government and international institutions, such as the Montreal Protocol and its multilateral fund, could supply further policy guidance and technical and financial assistance. 

The project team will continue interviews and consultations in early 2013, especially to pursue analytical recommendations made by the Confederation of Indian Industries, and will report updated results.

The project participants hope that this paper and their further work will assist Indian companies and the Indian government in managing the HCFC phase-out under the Montreal Protocol, understanding the business case for market transformation, and taking domestic and international decisions on the future of HFCs.  

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Switchboard is the staff blog of the Natural Resources Defense Council, the nation’s most effective environmental group. For more about our work, including in-depth policy documents, action alerts and ways you can contribute, visit NRDC.org.

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