Danfoss Perspective: Let’s Ratify Kigali
Let’s imagine two futures: The first is for the U.S. to continue to be a world innovator in HVACR technology. In this scenario, we continue our present path to a low-GWP [global warming potential] future. In the years to come, America’s manufacturers put out a growing variety of sustainable, efficient equipment, and contractors continue to install world-leading technology.
The alternative future is one where the U.S. gets out of step with the rest of the global market. In this scenario, U.S. manufacturers have to serve a domestic market with one type of equipment and the growing global market with another. Even worse, some states decide to go their own way, creating multiple mini-markets that are impossible to satisfy. Smaller U.S. manufacturers fall by the wayside and larger ones lose much of their share of the global market.
At this point, things could go either way.
If the United States is to maintain its dominance in technology innovation, we will need to continue to successfully compete in global markets. It is as true for HVACR as for any high-tech industry. It means that we must be prepared to play by the same set of rules so that our products meet international norms. This includes the Montreal Protocol, which was amended in 2016 to include the phasedown of HFC chemicals. The amendment, signed in Kigali, Rwanda, will go into international force on January 1, 2019. The U.S. has yet to ratify the amendment but is taking steps that could lead in that direction. Ratification requires 67 Senate votes after the administration sends it to the upper chamber for their consideration. The result will impact all parts of the HVACR delivery channel: manufacturers, wholesalers, contractors, and users.
A recent study commissioned by AHRI and the Alliance for Responsible Atmospheric Policy shows that that ratification of the Kigali amendment will increase U.S. manufacturing jobs by 33,000, increase exports by $5 billion, and improve the overall balance of trade for these products. Economic and job benefits also accrue to downstream participants -- the wholesalers and technicians. On the other hand, failure to ratify the Kigali Amendment could transfer the current competitive advantage from the U.S. to other countries, like China.
Now is the time to develop support for Senate ratification. Why? In the U.S., we are already transitioning to new, low-GWP technologies. Any uncertainty that has come about due to the court’s EPA SNAP decision needs to be dispelled. Internationally, developing countries are quickly moving away from HCFCs. These countries, representing more than $1 trillion in HVACR sales in the next decade, are looking to see how their future technology needs can be met. The U.S. is in heated competition to sell to these growing international markets.
Without a coordinated move to low-GWP equipment, the U.S. would be out of sync with the rest of the developed world. We would not even be able to sell our equipment into Canada, as it would not meet their evolving standards. States like California and others would look abroad for the equipment they would need. Either that, or U.S. manufacturers would have to offer two lines: one for those states moving ahead with a phasedown and one for all others. The complexity for wholesalers and contractors would be enormous.
Fortunately, the industry’s presence in every state is allowing us to effectively deliver our message to Congress. It is important that we speak as one industry and that we educate our elected representatives on the importance of the Kigali Amendment.
Danfoss stands with a unified HVACR manufacturing sector: we support ratification of the Kigali Amendment.
Let’s work together to ratify Kigali.
Publication date: 6/6/2018