The white nouse washmoron February 6 1998 arevtoranbunt ror t rrestpent rron Topp stem RR xamiuern Mech ant stemperc ornEsrerLNc stmsecr Signing Kyoto Protocol — Timing This memo addresses th quesion o when to sign the Kyoto Protocol which willbe open for signature for one year begining March 16 Though we have already indicated that we expect to sign we have not sid when we plan to do so The Secretary of State i scheduled to tetly before Congress Fabniary 10 and Stu Eizentais esting February 11 They are ely to be asked about our signing plans so we need a decision on this by Monday February 9 Conceptual thee are thre options 1 sign in March when th Protocol opens fo signature 2 announce that we wil not sign untl afer th Buenos Ales mestng in November at which time we hope to have made progress on open points concerning certain key issus suchas rmissions trading or 2 make clear that we are going t ign bt defer signature forth ime bing retairing the Alxiit t ign at anytime that development suggest ths would b th bet course For reasons st forth below your advisos favor Option 3 Background The Kyoto Protocol was an historic tep and a substantia achievement for the United States In key respects — incluingtargtsand timetables fo industrialized nation the market mecharins of emissions trading and oin implementation I now goes under the new rubric of the Clean Development Mechanisn‘ th coverage of ll ix gases th inclusion of carbon absorting sinks uch as forests and th treament of miltary enissons — the Protocol reflects proposals advanced by the United States We hav atached a fit sheet should you wsh to review the specifics in more detail At the same time crtal dels of emissions trading and the new Clean Development Mechanism CDM remain to be worked out And a great del of work needs to be done t secure the meaninfil paricpaion of key developing countries The Protoco1is generally regarded by ts domestic supporter as an important step forward but atl a work in progress The cries — ther ae a table number both on the Hil and among business labor and firm groups — se ita a itly flawed accord n which the Unted Sates 1 accepted too stingent a target and go to ite in return especialy with regrd to developing countries They believe the U S should have made good on its claim thatit would walk away from a bad agreement Anabiic As noted he Protocol wil be open or signature fom March 1998 to March 1999 so fom a purely sibstanive viewpoint a signature at any time withi hat period would be re In deciding when o ign four key varaies ned to be considered 1 diplomat leverage 2 international signing polities 3 the Hil 4 the reaction of environmental groups and business Diplomat leverage Some on the Hl and in th business community argue that we should withhold our signature unil afer the Buenos Aires meting n order to ain more leverage i the iffeut upcoming negotiations over the rules fr miso riding and the CDM Ther argument is that counties ought tobe worried that if hey undermine those market measures through unhelfil nls they could ose U S support forthe whole Protocol They contend that ifthe United States signs before t knows th crtiel details of hese measires it wil ose its leverage ‘The counter argument is that appearing to make our signature conditonal on Buenos Aires wil anger our negotiating pariers and be counterproductive that we may undereat our leverage wth developing countries if they can hold ove us the fic that we haven‘t even signe the Protocol and that we rein all the leverage we need by making clear that unless requisite progress is made on the rule and on developing counties we won‘ sbnit the Protocol for rtiicaton Intermtional signing politics Given th trong U S leadership role n geting Kyoto done we do not want t ind ourselves as an outie on signing As things stand it does not appear that there is going to be a UN signing ceremony though that hasn‘t yet been ruled out The UK Taly Japan and Canada among others will likely sign ey Several European nations including the EU Commision may del untl June when new EU burdesharing arrangements are negotiated Russi Austria and New Zealand reported may wat unt les fo intenaional rnissions trading are beter defined in November at Buenos Ares In general State doesnot believe that othr counties expect us o sign early or that we wil fice interational pressure if we hold off unt afer Buenos Ales — provided that we don‘t make our signing explity conditional on achieving cein ests here Hovever deciions about signing are sill faid and we could end up more is lated than we think by th spring or summer TheHill Congressional views vary on when we should sign Two key Democnitic Senators Byrd and Dascie are urging us to wai In a foo statement last week Byrd endorsed many of the Kyoto accomplishment but noted that the Kyoto Protocol il to include the specifc 2 scheduled commitments for developing counties identifed asa conditon to signing in ast yer‘s 95 0 Ryrd Hagel Resolition He urged you to wai and see what the next November mectng will produce and what canbe accomplished in te meantime and sid that signing early will compromise the Presidents ecbiit n desling withthe developing counties over the next year Byrd also urged you no o signin an otherwise qute postive later he sent shorty aer Kyoto Byrd‘s view is important because as long a he is relatively sashed with the way we are proceeding he will probably refise t oin any hostle resolution that Sen Hagel might wish to offer and without Byrd Hage is unlily act As things sand now Hagel and Byrd have agreed nar to do any new resotion and that approach might hold even if we were o ign earl sil an early suring would rock the boat and might well prompt more aguressive steps by Hagel and his alles At the least signing wil lead Hage to demand that we submit the Protocol right away for the Senate‘ advice and consent and our filure to do so may provoke a premature Seate debate onlyore One more point on Sen Byrd Although there isa ood argument for tying notto antagonize him now by an eal signing we should also undestand that wating postpones but probably does not avoid confict with him Evenif we wat untl ater Buenos Ales we wil sll end up signing before crical mass of key developing counties is on board since tis very unlikely that hey willbe on board before the signing period ends and Senator Byrd won t ike that Senator Chafee one of our fw Republican supporters agrees with Byrd‘s view that we should ot sign right away Senator Daschle believe that signing now would b divisive within the Democrat auus Other Democrat Sentors —— including Lieberman Baucus and Bob Kezey —— believe we should sign soon although Kerrey‘s views may be afeted by local Nebraska politics o underscore our success at Kyoto Enviromental communitsbusinesslahor At this time the environmental community is inclned to eave the signing ise to our discretion ather than making t a major cause A number of them betiev hat keeping Sen Byrd in a moderate stance is quite important and see th vitue of not taking a step that could antagonize him Should signing become a high profile issu however the community would surely press for an early signing On the business sid the most significant constrctve coalition the Intemational Climate Change Parierstip including BP Enron DuPont GE anda number of other Forti 500 companies ivors wating untl afer Buenos Aires because they beleve that would strengthen our leverage in negotiating the riles of rating and the CDM Labor doesnt hink we should sign at all unl we get developing counties on board so wating t ign would at least defer a negative rection rom them Options 1 Signin March when Protocol opens for signature Signing immediately would send a strong signal tht you consider the Kyoto Protocol to be an important success would avid any 3 tisk of international isoition and would prevent an ant signing campaign from revving u — particularly if we signed without agreat del of advance notice The id are that we would make Sen Byrd unhappy and could provoke a premature ight in th Senate once Senator Hage demands that we immediately submit the Protocol for raifeation Protacted division in the Senate over Kyoto could complicate effrsto advance our domestic climate change agenda And shar debate on this iss during 1998 would likely be unwelcome among some number of House and Senate Democrats Labor is also ely t eset badly 2 Announce that we expect to sign the Protocol afer Buenos Aires This approach would be generally popular onthe Hil and would minimize th chance of divisive congressional resotions It would als be popular amang business But there are ubstanial downsides Fit this announcement would inevitably put intersifed forus on th issu o signing and raise th ba for Buenos Ares supgestingthat unless we got what we wanted in cerain key respec we might not sign Second we could find ourselves isolated intemationaly ifthe other major players sign the Protocol relatively eal Third we could find ourselves crtiized by the environmental communis if signing becomes an issue and they decide to press fr ary action 3 State clearly that we intend to ign but remain exible on the timing The object ofthis approach would b to defer signing intily whle recognizing that circumstances migh lead us to want to sign wellin advance of Buenos Ales The reason for deiring signature at the outst would b to avoid erosing swords with Senator Byrd and provoking an unwelcome debate onthe HHll o an eary atack from business o labor At thesame time we might conclude over tme that our falure to sign was threatening to become counteproductve — by diminishing our leverage withthe EU or developing countries or by provoking unvelcome iterational or domesti pressure For example ifthe other G 8 counts end up signing early and it appears that our fire to sign would b problematic in th context ofthe G—8 in Bimingham you night deside that we should sign promptly notwithstanding dificutes that might cause on th Fil Ar the least this approach would give us a fow more months to tyto build support fr ou policy before a debate s kunched At most his approach could lead uso sign fter the Buenos Aires meeting ata point when Congress would ave adjourned Senator Daschle would ses the approach as reasonable Senator Byrd whle prefering no signature untl we get developing counties on board would deitely prefer this approach t an immediate signing and would not crise us — at leas unt we signed Nor would this appronch be likely to provoke hostle action from Sen Hage Ou talking point for Administation offcils would be Like other counties we will b signing the Kyoto Procol within he one—year signing period provided for in the agreement We haven‘t made any determination yet as to the precise time of signing a This approach would cary some ris though not as great as Option 2 Holing off on signing «ven in an unspecifed way that reins flexibility would again rise the question of what progress enough dither at Buenos Aires or before to warrant signing But the prenise ofthis option is hat ifthe downsides of no signing came to appear signifcan we could always decide to ull the tiger and sign Jim Stanbery Kate Meginy Gene Spering and Todd Stem favor this approach as does Stare Option 1__ Option2__ Options __ Discuss s