When you compress gas, it gets hotter. When you expand its volume, it gets colder. Both these processes preserve the same amount of energy stored in the gas. Air conditioner is basically a loop exploiting this phenomena:
1. Compress the gas (it gets hotter)
2. Pump it through a radiator and remove excess heat with a fan
3. Expand the gas to its previous volume (it gets colder than before, because you have removed some energy on previous step)
4. Pump it through another radiator to heat it back to room temperature (draw energy from the room into the gas)
5. Rinse and repeat
So aircon works as a heat pump moving energy from one radiator to another. The circulating gas is called freon. It is engineered to be the most efficient in this process.
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