The U.S. and Climate Change: Washington’s See-Saw on Global Leadership

As noted above, the Reagan administration played a crucial leadership role in securing agreement to the Montreal Protocol on Substances that Deplete the Ozone Layer. This cable reflects the administration's commitment to begin taking steps to limit emissions as soon as possible, stressing that, "The broadest possible participation in the protocol is important to its effectiveness -- because of the long atmospheric lifetime of the chemicals, emissions anywhere affect the ozone layer over the entire globe and over many decades. " The urgency to act was underscored by recently released preliminary findings of a study of springtime depletion of ozone over the Arctic. The continued reduction in ozone identified by this study "strongly suggests that both chemical and meteorological mechanisms perturbed the ozone." The U.S. also believed it was important to secure the widest possible adherence to the Montreal Protocol, especially with regard to developing countries, stressing that with regard to China, India and newly-industrializing nations, "It is essential to the protocol's effectiveness that countries with significant potential future production/use sign and ratify." To this end, the cable includes specific instructions to embassies in these countries for urging them to join the agreement.

This cable reports on steps being taken by the U.S. to implement the Montreal Protocol, including the EPA issuing proposed regulations and President Reagan plans to submit the agreement to the Senate in December 1987. It also instructs the embassies to make sure their respective countries are aware of the new Antarctic ozone finds, as noted in the previous cable, noting that "the preliminary Antarctic findings indicat[e] that the loss of ozone was greater than ever previously recorded. While the scientists are still analyzing their data, we believe the preliminary findings confirm the wisdom of the Montreal Protocol." The cable also noted that "On November 3, the Senate passed a resolution calling for steps toward ratification to be taken as quickly as possible. The resolution reflects broad support for the protocol and additional concern raised by recent Senate hearings on the preliminary results from the Antarctic."

This cable addresses the concern, noted in document 1, that India and China adhere to the Montreal Protocol, as part of the essential effort to have the broadest possible participation in the agreement. The concern is that otherwise both countries could potentially become major producers of ozone-depleting chemicals, a concern stressed by a recent report by the congressional Office of Technology Assessment and that will likely be pressed during Senate hearings on the agreement. Among the talking points for the embassies to use in pressing this issue with India and China are "The atmospheric science and environmental effects: The risks are real and substantial;" and "International standing: other major countries are participating; the Chinese and Indians should not want to be seen as potential "pollution havens."

This cable provides greater detail on the newest scientific findings regarding ozone depletion, which further buttress the need for quick implementation of the Montreal Protocol. The report of the Ozone Trends Panel, established in October 1986 by NASA, NOAA, the UNEP and other agencies to reassess ground and satellite data to see if this supported the findings of two 1985 reports that found significant reduction in atmospheric ozone. A key finding of the panel's report, released on March 15, 1988, was that "There is undisputed observational evidence that the atmospheric concentrations of gases important in controlling stratospheric ozone levels continue to increase on a global scale because of human activities." These findings confirmed the prediction of models and in some cases exceeded the decrease in ozone that they predicted, and show that "man-made chlorine species are primarily responsible" for the decreases in ozone.

This cable contains the statements made by the U.S. head of delegation, William A. Nitze, the Deputy Assistant Secretary for Environment, Health and Natural Resources in the Bureau of Oceans and International Environmental and Scientific Affairs, to the first special session of the governing council of the United Nations Environment Program (UNEP), held in Nairobi. The meeting was convened to consider three forward planning documents designed to coordinate the UN system of agencies, governments, non-governmental organizations and publics around the world with respect to a System-Wide Medium-Term Environment Program (SWMTEP) for the period 1990-1995; a UNEP Medium-term plan for the period 1990-1995; and extension of the 1984-1989 UN medium-term plan through 1990 and 1991. The range of issues covered by these plans was ambitious: stratospheric ozone depletion, destruction of tropical forests and the biological diversity they support, global climate change, air and water pollution, and international shipments of hazardous wastes.

Nitze confirmed the U.S. intention to play a leading role in framing and implementing the overall goals of these plans, and aligning U.S. environmental priorities with these goals:

"With respect to global climate change, the U.S. will continue to take a leadership role in implementing the Montreal Protocol on ozone depleting substances. Before considering development of an international convention on the overall climate change issue, however, we must learn much more about the global and regional impacts of climate change and the full range of possible response strategies to deal with those impacts. The U.S. strongly supports creation of an intergovernmental panel reporting jointly to UNEP and WMO which would simultaneously (1) stimulate and assess scientific research into the extent, distribution and effects of global climate change and (2) begin to develop a range of possible response strategies to deal with those effects."

This support came with an important proviso: "Whatever response strategies are finally adopted will have to take into account other social and economic goals." This hedging would only grow stronger in the future for the two Bush administrations. Furthermore: The UNEP was "not in a position to enact or enforce environmental laws, regulations or policies. This must be done by the individual countries concerned. UNEP's proper role is to facilitate the development and implementation of such laws, regulations and procedures by individual countries and to assist those countries in establishing the institutional and legal mechanisms necessary for their effective implementation."

This memorandum lays out proposed U.S. positions on global environmental issues that would establish President Bush as a leader on these topics at the Economic Summit to be held July 13-17, 1989 in Paris. This is seen as very important, as British Prime Minister Margaret Thatcher, French President Francois Mitterrand and Canadian Prime Minister Brian Mulroney had already staked out strong environmental positions, while the U.S. has so far "remained silent." Working in response to a charge from the White House Summit Group, the State Department created a group composed of representatives from State, EPA, Energy, Commerce, and other federal agencies that developed a program that aimed at "breaking the link between economic development and deterioration of the environment." The memorandum recommends that President Bush stress the theme that runs through these proposals of "wise, active stewardship over the resources of our planet. This is a responsibility we have to ourselves and as our legacy to future generations."

The first set of proposals outlines three initiatives to combat environmental pollution, focusing on industrial pollution prevention, prevention and clean-up of oil spills, and the state of the world's oceans. The second set focuses on global warming. The three initiatives discussed here stress studying the most cost-effective ways to slow warming in the future. They are 1) steps to address deforestation and reforestation; 2) increasing fossil fuel efficiency and expanding renewable energy; and 3) support for nuclear energy both for energy security and to contribute to solving the greenhouse problem. The memorandum acknowledged that the last initiative would likely be unpopular with environmentalists. All the proposals are discussed at length in the memorandum, along with the pros and cons for each. The proposals were seen as having only modest budgetary implications for the U.S., though in some cases would call for action by international bodies to whom the U.S. was in arrears regarding its financial support, which could be "embarrassing."

This memorandum was prepared as part of the U.S. participation in the IPCC Response Strategies Working Group (RSWG), which was established to "examine existing legal and institutional mechanisms to determine how they may be used to implement options to limit or adapt to climate change" and "consider new legal and institutional mechanisms that could be used to implement options to limit or adapt to climate change." The bulk of the memorandum is taken up with a list of relevant existing legal and institutional mechanism, while the last part examines possible elements of a framework climate convention. It is this last part (pages 18-21) that is of the most interest as a window into developing U.S. ideas for a climate change treaty, as seen from the State Department.

Looking first at the general principles that should guide a climate agreement, first was the need for the widest possible participation, with emphasis on those nations that make up a significant majority of the world's population and those that produce the greatest percentage of greenhouse gases. The framework convention should follow the model of the 1985 Vienna Convention for the Protection of the Ozone Layer and provide an institutional framework for ongoing assessment of global climate change and possible responses. Its twin goals should "be to provide a framework for: 1) increasing our understanding of the scientific aspects of global climate change and its potential impacts; and 2) protecting social, environmental, and economic well-being from adverse impacts likely to result from climate change." Finally, the agreement should provide for involving and assisting developing nations address climate change.

The Vienna convention was a good model, as it established broad principles of cooperation, not specific and likely contentious provisions dealing with areas such as liability, financial measures or enforcement, and established an institutional structure through which the participants can discuss specific future steps in light of ongoing scientific research. One interesting emphasis is on how the framework goals should not be defined. It should not be "protecting the climate," as some had put it. "Protecting the climate per se is not our objective; rather, our objective is to protect social, environmental, and economic well-being from the adverse effects likely to result from global climate change." Instead, the "framework convention should implement its twin goals by generally adopting the conceptual approach taken by the IPCC. Thus, the convention should focus on cooperation in 1) assessing the relevant scientific information related to global climate change; 2) assessing potential impacts of global climate change and their likelihoods; and 3) formulating and evaluating appropriate response measures, on the basis of such assessments as well as social, economic, and environmental factors and cost effectiveness."

The memorandum underscores the significant importance of ongoing scientific assessment to the success of any framework agreement. This process should be augmented by increased cooperation and coordination, supported by the agreement, in research and climate monitoring "to improve knowledge about the origins, mechanisms, and effects of global climate change." This work should also be the focus of expert panels created by the framework convention "to collect, analyze, and report to the parties on relevant scientific, technical, environmental, social and economic information...," so that his information can be used to develop future response protocols. Financial measures to support these responses would likewise be the subject of future discussion and agreement. Finally, with respect to the participation of developing countries, the framework should provide for cooperation in the development and transfer of technologies to limit or adapt to climate change.

This memorandum lays out the positions the U.S. participants should take in the upcoming October 2-6, 1989 meeting of the UN Response Strategies Working Group, where the agreed report was to be produced. The U.S. had submitted papers, produced by a "lengthy" interagency process, on the five main topics to be covered by the report: legal and institutional measures; technology assistance, development and transfer; financial measures; economic measures; and education and information measures.

Anticipating other governments will be pressing views different from the U.S. this memorandum provided the common policy guidelines the U.S participants should follow in the discussions. Also important would be keeping in mind President Bush's desire "to lead the efforts of the international community to protect and enhance the quality of the global environment while maintaining acceptable economic growth." Therefore, the U.S. positions should be presented positively in terms of ultimately contributing to the "decisive action . . . to understand and protect the earth's ecological balance' called for by the President and other leaders" at the recent Paris Economic Summit.

The section of the memorandum dealing with legal and institutional measures closely follows the U.S. paper on this topic, which includes the scope and goals of a climate framework agreement (see Document 8). The section on technology also repeated the points made in the other document about providing for cooperation in the development and transfer of technologies need to address climate change, with due protection for intellectual property rights and maximum use of existing governmental and non-governmental institutions and mechanisms.

Likewise, the report's discussion of financial measures should describe existing bilateral and multilateral financial assistance mechanisms and encourage their use. The report should not recommend specific financial measures such as global climate funds, but should call for creation of a working group under the proposed convention to study possible mechanisms to assist LDC's in responding to "anthropogenically induced global climate change."

Regarding economic measures, the report should emphasize the importance of using market mechanisms, including price signals, in combination with regulations and product standards to reduce greenhouse gas emissions, and should note the advantage of giving the greatest possible flexibility to find the most economically efficient way to reduce these emissions.

Finally, with respect to education and information steps, the report should stress "the need to present the science of climate change and its impacts on natural resources and socioeconomic conditions in a balanced and objective way which reflects all of the areas of agreement and the uncertainties." Finding this balance would be increasingly difficult not just for Republican but also Democratic administrations.

This memorandum to the Secretary of Energy flags issues that DOE saw in the Executive Summary and Policymaker's Summary of the initial report by Working Group I, which focused on the science of climate change, of the International Panel on Climate Change (IPCC). The IPCC was formed in October 1988 by the UN Environmental Program and the World Meteorological Organization to prepare, in addition to the report on science, reports on the socioeconomic impacts of climate change and possible strategies to mitigate these impacts. These reports were to be presented at the Second World Climate Conference in October 1990 and to the United Nations General Assembly in November 1990. The U.S. participation in drafting the Working Group I reports had been headed by members of the Working Group on Global Change of the Committee on Earth and Environmental Sciences (CEES), which was part of the U.S. Global Change Research Program.[9]

The draft reports had been reviewed by the CEES and the National Academy of Sciences. There were few concerns regarding the full Working Group I report, which is described as providing a "a reasonable picture of the current scientific consensus on climate change and also addresses some recommended approaches to narrowing the scientific uncertainties." However, there were concerns whether the two summary reports accurately reflected the findings of the full report (the Executive Summary is attached). These, it was felt, "make too strong a case for global warming and do not adequately represent the scientific uncertainties." Specific revisions to the executive summary itemized in the memorandum provide evidence of how the summary should be changed, mostly by making statements more conditional with respect to what the science says about the causes and likely future course of global warming. Given the "political realities" of the European governments whose views dominate the summaries, this was not unexpected, but looking forward, the memorandum recommends that the Energy secretary stress the full report and work to deemphasize the two summaries.

This memorandum discusses issues expected to be raised at an interagency meeting on the new administration's climate change policy, with a particular focus on economic aspects of climate change mitigation . Ron Suskind provides a summary of the meeting in his book on Secretary O'Neill and the Bush White House.[10] The bulk of this document is a set of PowerPoint slides that address key economic and financial costs associated with pricing carbon emissions, cap and trade vs. carbon tax schemes, past and projected U.S. emissions, estimated compliance costs for the U.S. in accepting the Kyoto commitments, and the impact of flexibility provisions and the use of carbon sinks to offset costs.

The major points are itemized in the attached Tab B, "Economics of Climate Change Mitigation." These include:

• The key policy is to put a price on carbon-equivalent emissions, so that economic activity incorporates the environmental cost of greenhouse gas emissions.
• The US has a very ambitious target under Kyoto, but so do others.
• Emissions reductions are much more costly if they must be done quickly, requiring premature scrapping of capital.
• Developing country participation can greatly lower our costs and benefit them. Nonetheless most are opposed on principle to taking even modest, growth targets.
• Options for major changes from Kyoto, in particular more modest targets and a cost cap, could greatly lower costs.

This PowerPoint presentation, prepared by the State Department for Treasury Secretary O'Neill, also dates from the period when O'Neill, along with EPA Administrator Whitman, thought the new Bush administration was going to carry out a reasoned, fact-based assessment of its position on global warming and the next steps to negotiate a climate change treaty based on the Kyoto protocol. It likely parallels the State Department's presentations made at the inter-agency meeting held the previous day (see document 10).

The presentation outlines four possible courses of action for the U.S.: stay the course; toughen positions; seek major changes in the Kyoto agreement; or abandon the negotiations, with the strategy, goals, assumptions and prospects for success in terms of domestic and international acceptance of each course identified. The one salient point that emerges is that domestic and international acceptance tended to be diametrically opposed; for example, staying the course to make Kyoto work as negotiated would likely have low chances of ratification in the U.S. but would be popular overseas, while seeking major changes in the proposed treaty would play well domestically with some audiences (the opposition to Kyoto was largely Republican, but there were Democratic critics of the treaty, as seen when the Clinton administration decided not to submit the treaty to Congress for ratification) but fare less well internationally in the near term, though this may change over time. In the event, it would be the last option, abandoning the effort to implement Kyoto, that Bush would take, largely guided by Cheney's push to place energy security ahead of environmental concerns.

The presentation acknowledged there were criticisms of Kyoto and a number of contentious issues to be resolved before any post-Kyoto agreement could be reached. The recent COP-6 meeting at the Hague in December 2000 had ended stalemated on efforts to reach agreement on key outstanding issues, such as how market mechanisms would work to curb emissions, how to include forests and farmlands, and securing participation by developing countries, a particular U.S. concern, and the push by these countries for significant financial and technological assistance. In the U.S., some felt a legally binding target for reducing emissions was a bad idea: there were uncertainties regarding the potential cost of the proposed mechanisms for such reductions, and non-participation by developing countries could harm U.S. competitiveness.

The scorecard was mixed regarding the current situation in terms of U.S., EU and developing country objectives for the negotiations. The UN Framework Convention on Climate Change and the Kyoto Protocol did reflect the U.S. goals of establishing an overall framework for the negotiations and seeking non-binding targets for reducing emissions to 1990 levels by 2000 through the use of market mechanisms such as emission trading, and potential credits for supporting emission reduction projects in developing countries and for "carbon sinks" such as forests and farmlands. These were seen as key to the U.S. goal of incorporating flexibility into the means by which nations could work towards their emission reduction goals, and to avoiding undue economic costs.

This success was counterbalanced by the EU focus on top-down regulation and limited flexibility in how nations could seek to meet their emission goals, and the rejection by developing countries of emission targets, combined with their stress on financial and technological aid in addressing global warming.

Finally, the U.S. had to address the view that it was a "profligate" consumer, representing about 20% of the world's greenhouse emissions, with per capita emissions 3-4 times that of the EU and 8 times that of China. Moving forward, the U.S. could expect to encounter international resistance to any new approach. To overcome opposition, the U.S. would need to establish a clear standard for U.S. ratification, if sought, and strong domestic action.

This memorandum was first published in the updated edition of Ron Suskind's book on Treasury Secretary O'Neill, The Price of Loyalty, and is included here as the document is no longer available on the book's website.[11] In Addition to President Bush, copies also went to Vice President Cheney, Christine Whitman at EPA, Defense Secretary Rumsfeld, Secretary of State Powell, and other cabinet-level officials with a stake in the issue. In it, O'Neill lays out a way for President Bush to ground the policy debate over climate change on expert opinion to more clearly determine existing and potential greenhouse emissions and concentrations, their sources, and options to reduce these over time. O'Neill acknowledges the problems with the Kyoto agreement: if fully implemented, it would only delay the projected accumulation of greenhouse gases by 11 years, a trivial step against what ONeill saw as a "very big problem;" it would, however, result in cutting projected U.S. energy consumption by over 30% in the 2008-2012 time period. The limited results and significant impact on the U.S. were the result of not including developing countries in the emission targets. O'Neill wrote that environmental groups recognized the limited impact of Kyoto, but supported it as a first step, a means of getting "the nose under the tent."

To place the Bush administration on a more productive path, O'Neill proposed that Bush first arrange to be briefed by a group of experts on the substance of the issue and the history of U.S. policy in developing a climate change treaty. This briefing would be publicized to demonstrate the administration's reasoned approach to crafting its climate treaty policy. After this briefing, Bush should establish a group of experts to prepare a public document that spells out the established scientific facts regarding greenhouse gas emissions, their projected concentrations, how these affect climate change, and key assumptions behind these linkages. These experts would then develop a process for establishing a consensus on the targeted limits on greenhouse gas concentrations, along with catalogues of the sources of these emissions and possible steps to reduce them, including assessment of economic costs and likelihood of success. Th1s would serve as the basis for analyzing the available options for amending or replacing the Kyoto agreement, and recommendations on how best to engage other governments "in a re-consideration and replacement of the treaty with a plan that is grounded in science and aimed at reducing concentrations rather than emissions. "

This work would provide the basis for the Bush White House to formulate its climate change policy. O'Neill felt this could be done in time for the next post-Kyoto climate change conference in the coming summer. Given the cross-agency nature of the policy, he suggested that Bush consider rolling the work on the climate change policy into Vice President Cheney's existing energy task force. O'Neill also suggested people outside government who could helpful in the process, including former secretary of state George Shultz, and environmental scientists Michael Oppenheimer of the Environmental Defense Fund and Jared Cohen, president of Carnegie Mellon University.

This memorandum preparing Secretary O'Neill for a meeting with White House advisor Gary Edson, who served on both the NSC and the National Economic Council, still reflects O;Neill's efforts to shape President Bush's views on climate change policy. The section on climate change, prepared by the Treasury Department's Office of Economic Policy, offers observations on O'Neill's statements at the February 21 interagency meeting (see documents 10 and 11) and his memorandum to Bush (document 12).

With respect to O'Neill's statement that the current Kyoto emission targets would result in only a brief delay in greenhouse gas concentrations, the memorandum notes that the parties to the negotiations have assumed that each consecutive commitment period would bring into force new and likely more stringent targets, as well as the eventual inclusion of binding commitments by developing countries. Seen in this light, the impact of the evolving Kyoto targets was not necessarily the only, or even the most plausible, outcome of the current agreement.

With respect to O'Neill's observation to Bush in his memorandum that some see the Kyoto protocol as a way to get "the nose under the tent" as the basis for further talks, the memorandum says that most economists working on climate change mitigation agree that, while the Kyoto targets and timetables are infeasible, a good mitigation approach would be "to establish a modest carbon price signal and increase it gradually and predictably. " This would allow the economy to adjust and adopt practices that involve less greenhouse gas-intensive production and consumption. This adjustment could, in theory, be "accomplished with a series of commitment periods with reasonable but decreasing targets (perhaps in combination with a safety valve) as the basic Protocol structure envisages, or with approaches such as gradually increased harmonized taxes." A key problem in implementing the Kyoto Protocol is that the short run price elasticity of such substitutions is very low, making an ambitious first period target very expensive.

Finally, with respect to the projected impact on the U.S. of fully meeting the Kyoto targets, if the flexibility in means of response pushed by the U.S. is included, it would not necessarily mean that the U.S. needed to reduce its emissions or energy consumption by more than 30% by the 2008-2012 period. Models predicted that over half of the emission cuts the U.S. would have to make under Kyoto could be secured by importing emission allowances, i.e., receiving credit for supporting emission reductions in other countries.

Another part of this memorandum, dealing with the Global Environment Facility (GEF) discusses how U.S. support for this agency was encountering funding issues with Congress because politicians were linking the GEF and the Kyoto Protocol. The GEF was created on a pilot basis in 1991 to help finance investment in developing countries that produce environmental benefits, with one focus is addressing climate change through support of energy sufficiency and renewable energy projects. The GEF was facing a major budget crisis, due in part to the fact that U.S. payments in support of the facility were in serious arrears. This arrears problem was linked to the misperception in Congress that the GEF was financing "back door" implementation of the Kyoto Protocol. Treasury had worked hard to prevent any linkage between the GEF and Kyoto, but recent positions taken by the State Department in the climate change talks, where proposals were discussed to have the GEF manage funds created out of certain Kyoto protocol mechanisms (a tradable emissions fund and a Clean Development Mechanism). was complicating this effort.

This memorandum to Jeffrey Kupfer, Treasury Secretary O'Neill's deputy chief of staff, looks at questions surrounding efforts to curb carbon dioxide (CO₂) emissions as part of a comprehensive climate change agreement as discussed in draft climate change memoranda reviewed by Adele Morris of Treasury's Office of Economic Policy. The memorandum's brief summary of the science is that the risk of climate change was real, based on the science, so the administration could anticipate continued domestic and international pressure to take it seriously. The assessment of policy options was carried out in the context of a Department of Energy study that evaluated very stringent caps on carbon dioxide; i.e., 1990 levels of utility emissions by 2005 or 2008 and 7% below that by 2008 to 2012. The DOE study made the seemingly common sense observation that either adopting less stringent limits or extending the time frame for implementing them could work to reduce the overall costs of compliance.

Evaluating the options in light of the growing conclusiveness of science about climate change, Morris argued there was no need to adopt either of two extremes: it was inadvisable to deny the idea of eventual mandatory reductions in greenhouse gasses, while there was no environmental or economic reason to immediately initiate "costly and severe" cuts in CO₂ emissions by power plants. Furthermore, a commitment to reduce greenhouse emissions did not necessarily result in a policy to control CO₂ using the utilities-based emissions approach found in recent legislation. Other options needed to be analyzed, in particular a broader climate effort that could be more efficient than a sector-based approach, given that electric utilities represent only 30% of U.S. greenhouse emissions. The memorandum proceeds to provide a detailed discussion of the merits of developing price incentives for fossil-fuel producers to curb emissions, arguing that a "modest, predictable and broad price signal would produce the greatest reductions in greenhouse gas emissions for the least cost to the economy." Also, regulating CO₂ emissions as part of an overall clean air policy could reduce costs and regulatory uncertainty for utilities compared to regulating conventional pollutants first and then unexpectedly limiting CO₂ later. Also key will be how a cap and trade system for utilities would operate.

While most of the conclusions and recommendations are redacted, what is released indicates openness to regulating CO₂ as part of an innovative strategy. On the other hand, carbon dioxide was a compound on which life depends. The overall balance that was being sought was summed up in the view attributed to President Bush: "The President recognizes the value of reducing the regulatory uncertainty that makes long term planning difficult, but he believes that it is appropriate to take the time to develop the right approach to the complex issues raised by global climate change."

This PowerPoint presentation provides the Bush administration's take on the discussion and outcomes of the recent climate change conference held in Milan, Italy in early December 2003. The presentation was given by Dr. Harlan Watson, the State Department's Special Representative and U.S. senior climate negotiator, to representatives from the National Association of Manufacturers (NAM). As the largest manufacturing association in the United States, NAM was a powerful body with deep vested interests in the economic and financial implications of any climate change treaty.

The December 2003 Milan meetings included the ninth session of the Conference of Parties (COP) to the UN Framework Convention on Climate Change as well as sessions of two subsidiary bodies, for Implantation (SB 19) and for Scientific and Technological Advice (SBSTA).[12] The ministerial sessions of the COP involved roundtable discussions on climate change, adaptation, mitigation and sustainable development; applications of technology to address climate change; and assessment of progress to date at all levels in fulfilling the goals embodied in the climate change agreements. The Milan COP was seen as a "breather" before tackling the difficult task of negotiating a post-Kyoto treaty, with the discussions focused in many cases on building confidence among the parties. The U.S. delegation's priority was making clear the Bush administration's policy on climate change.

Most of U.S. interest and concern was focused on financial issues discussed at the meetings. First was the matter of the biennium budget for 2004-2005. Here, the U.S. secured a clear distinction between UNFCC and Kyoto costs, and the clear understanding that it would only contribute to the former; the U.S. would also withhold funds for any Kyoto elements of the convention's "core" budget and would no contribute to any other Kyoto costs. The U.S. also helped to identify Kyoto's costs at over $17.5 million in 2004-2005, and worked with Japan to fight against any increase in the convention's "core" budget, which in the end was agreed to increase by 6% over the previous biennium (against the 29% increase requested by the UNFCC secretariat and the 9% sought by the EU). The U.S. also will indicated it would not contribute to the Special Climate Change and Least Developed Country funds, as they are part of a Kyoto package in which it does not participate.

The U.S also pressed its views on scientific and technological issues taken up by the SBSTA. In discussions on the IPCC's Third Annual Review (TAR), the EU sought to set broad agendas, including discussions about atmospheric concentrations of greenhouse gasses and national burden-sharing, while the U.S. and other nations, including Japan and Australia, pressed for a focus on "bottom-up" discussion of practical opportunities and solutions to climate change. In the end, the SBSTA opted for the more practical approach, which the U.S. believes will produce a more useful exchange of information among experts and parties to the convention.

This cable reports on a "frank" exchange between U.S. and European Union officials about addressing climate change under the related frameworks of the UN FCCC and the U.S.-initiated Major Economies Process (MEP). The latter was launched by President Bush in May 2007 with the goal of bringing together the major greenhouse gas emitters and energy consumers to work on drafting a new post-2012 framework agreement on climate change by the end of 2008. The nations involved included Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia, South Korea, South Africa, United Kingdom, the and EU, as well as UN representatives. The MEP was not seen as an alternative to the existing UN framework, but a complement to it, and stressed the need to foster energy and economic security, along with new clean technologies, as key elements of any climate change agreement.[13]

Representing the U.S. at this Brussels meeting were Paula Dobriansky, Under Secretary of State for Democracy and Global Affairs, Jim Connaughton, Chairman of the White House Council on Environmental Quality, and Dan Price, Assistant to the President for International economic Affairs. The EU delegation was led by Janez Podobnik, Slovenian Minister of Environment and Spatial Planning (for the EU Presidency), Stavros Dimas, European Commissioner for the Environment and Pierre Vimont, French Ambassador to the U.S.

The cable provides a detailed account of the often technical exchanges between the U.S. and European officials about targeted reductions in greenhouse emissions under a climate change framework agreement, as well as discussions of new technologies such as biofuels and clean coal, so only a few of the key exchanges will be summarized here. The U.S. delegation sought EU agreement under a MEP "Leaders Declaration" to a number of points, including a long-term global goal; legally binding, nationally determined mid-term (i.e., sometime between 2020 and 2030) goals backed by national plans; and financing mechanisms, but the EU environmental commissioner was noncommittal, saying each proposal would have to be evaluated individually.

With respect to the UNFCCC discussions, CEQ chairman Conaughton said that the U.S needs binding commitments from other nations, including developing countries, to secure congressional assent to an international agreement on greenhouse gas emissions, and urged a commitment to this goal at the upcoming MEP leaders' summit, leaving the exact mid-term goals to the UNFCCC negotiations. The Europeans again refused to make a commitment but criticized the U.S. for failing to ratify and implement the Kyoto Protocol, to which Connaugton repeated the argument that the protocol was not binding as it was not enforceable, and was flawed because the U.S. and the EU together cannot halt global emission increases without participation by China and developing countries.

Clearly the question of binding emission reductions was a major point of contention between the two sides, as seen in the discussion of mid-term goals and whether developed countries must make absolute reductions in their emissions by 2020. The U.S. side acknowledged that some nations, such as South Korea, Italy, Spain and Greece, would find this impossible, and argued that if the EU pressed the U.S. for absolute reductions, Washington would insist that Austria, France, Ireland and other EU nations with a similar energy profile to that of the U.S. to likewise commit to absolute reductions. As it was, the EU side had to acknowledge that under the proposed plan to work towards pan-EU reduction targets, some members would actually be permitted absolute increases in their emissions.

Similar detailed exchanges, often on the lines of dueling statistics, took place on the value of emissions trading schemes, such as a global carbon market (which the U.S. argued would, in the absence of caps on all emissions, create an incentive for some nations to avoid making real commitments to reduce emissions), and a detailed summary of the recently-passed Energy Independence and Security Act of 2007 (EISA), which Connaughton said locked in U.S. mandatory mid-term commitments to address climate change.[14] He noted that under EISA U.S. emissions will begin a downward trajectory, with prelIminary estimates showing that the legislation will prevent 6-10 billion metric tons of greenhouse gas emissions in the U.S. by 2030, but admitted that the U.S. will not reduce its emissions to 1990 levels, but later. Such reductions, however, were inadequate in light of what was needed. As Connaughton pointed out,

'. . .emissions from the non-OECD countries are projected to be double that of the OECD nations by 2050, highlighting the need to engage developed countries. A 38-gigaton reduction in projected 2050 global carbon dioxide (C02) emissions is needed to halve global emissions, an enormous amount, given that one gigaton of C02 equates to the savings from 273 clean, zero-emission, coal-fired power plants, of which we currently have none. We are nowhere near the scale of what we need to reduce emissions."