With the Obama administration focusing on addressing some of the low-hanging fruit like conservation and energy efficiency to tackle energy and climate challenges, energy efficiency has become a key issue in policy discussions in the United States. E&ETV traveled to Paris for the annual Energy Efficiency Global Forum and Exposition, hosted by the Alliance to Save Energy, for a series of interviews and panel discussions about the challenges to, and potential of, energy efficiency. Today's segment features E&ETV's interview with Niels Christiansen, president and CEO of Danfoss A/S, one of the world's leading manufacturers of electronic and mechanical components for refrigeration and air conditioning. Christiansen comments on domestic and international climate talks and discusses how legislation can help energy efficiency reach its full potential.

Transcript

Monica Trauzzi: Mr. Christiansen, thank you for joining me today.

Niels Christiansen: Thank you.

Monica Trauzzi: We're at the EE Global Conference in Paris and it's bringing together business leaders, members of governments from around the world to talk about energy efficiency. Compare U.S. and European efforts in the field of energy efficiency and what you see directly in your line of work, the differences between these two countries.

Niels Christiansen: I think we've seen the European countries having a lot of focus on energy efficiency for quite awhile and having addressed that situation, via standards and via legislation. Whereas, it has recently really become more important I think in the U.S. and you start to see a lot of initiatives coming there also. So it's interesting how right now we probably see the U.S. gearing up and getting much more momentum and two different ways of getting there, both of them actually leading to more energy efficiency.

Monica Trauzzi: From a policy standpoint, what do you believe is needed to help energy efficiency be propelled to the forefront in the United States?

Niels Christiansen: I think in general there is a strong agreement that energy efficiency is probably one of the good places to invest. It is probably a quicker and better pay off than a lot of the renewable energy sources that we are investing in. But it doesn't happen by itself and to some extent the technologies are there and the real challenge is to make consumers buy the type of products that are more energy efficient. And there are all kinds of ways around minimum standards, labeling type concepts or even subsidies of different kinds to promote buying the right type of equipment. And I think that's what's needed.

Monica Trauzzi: There's talk right now in the U.S. Congress, particularly in the Senate about legislation that would impose an efficiency mandate on small retail energy providers, which would basically mean that electric and natural gas distributors would be essentially forcing their customers to reduce their energy consumption. Do you think that that's a necessary mandate? Should something like that be mandated by the government?

Niels Christiansen: I think we have some proof that in some European countries that has actually worked, but I don't think it can stand alone. It would really have to be followed in parallel by activities to push the consumers to start to think about. This is about comparing a first-time buy or price with a full-time ownership cost and very often we go in to the shop and we buy the cheapest air conditioning equipment, not thinking about that over 10 years it is probably going to be much more expensive than the one next to it on the shelf that may have a little bit higher price in the beginning, but offers a much lower running cost over time. And I think we need to educate consumers that they have a choice and that actually the new technology is there. It's on the shelf and they should start buying it.

Monica Trauzzi: Where do you see the most potential for growth? What are the next steps for Danfoss?

Niels Christiansen: I think there are several areas, but I think definitely within energy efficiency in buildings. It's kind of the low-hanging fruit of energy efficiency. That's where we have a lot of the technologies and solutions and it's pretty easy to get at. And that's within heating and that's within air-conditioning and doing that more efficient.

Monica Trauzzi: On cap and trade, the debate is in full swing in the United States. Where do you see the debate going this year leading to the Copenhagen talks and, overall, how does that affect the energy efficiency portion? Does energy efficiency sort of get lost in all the cap-and-trade discussion?

Niels Christiansen: I don't think so. I would rather say that coming out of the carbon trade discussion there's a lot of focus on renewable and we all talk about wind power, which I think is all good and right, but it should not be at the expense that we forget about energy efficiency, because it's actually probably a more short-term, more efficient way of getting payback. But I think and really hope that the Copenhagen meeting will lead to a new agreement that can take over from the Kyoto agreement that runs out, an agreement that will be more global in nature, so we'll have all of the big countries, including the U.S. and China, onboard on something that will drive towards less carbon. And I'm very convinced that if we get that kind of agreement towards less carbon than people will have to start looking at energy efficiency. It's a must to accomplish those targets. So it will follow if we're successful in Copenhagen.

Monica Trauzzi: How convinced are you that the U.S. can actually get the votes to ratify a treaty though back at home?

Niels Christiansen: It's the big issue. It's the big issue. I think a lot of things are moving in that direction. I think there is a sincere wish to do it, but it's not easy. So I wouldn't be certain today that we'll get an agreement, but I can tell you that I've been traveling in the U.S. and I've been talking also to some of the Chinese people, including the ones who are going to negotiate in Copenhagen and there is a will some there. There is a will to make it happen and I would not rule it out.

Monica Trauzzi: Okay, we'll end it right there. Thank you for joining me today.

Niels Christiansen: Thank you.

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