d THE WHITE HOUSE WASH INGTON March 28 1998 lA- u-qj Op» e J CoS MEMORANDUM FOR THE PRESIDENT FROM TODD STER ZC SUBJECT Climate Change Weekly Report I thought it would be useful to start giving you a weekly report on our climate change efforts In this report I will provide an overview on domestic diplomatic congressional and communications activity In subsequent reports we’ll just give you updates Domestic Policy There are three principal climate change initiatives as well as a number ofsmaller initiatives and ideas on the drawing board The major initiatives are 1 the $6 3 billion budget package $3 6 billion tax $2 7 billion spending 2 our federal energy usage and procurement effort and 3 our industry by industry collaboration As you know our electricity restructuring proposal was also announced this week with some anticipated environmental criticism on climate change reiterated by the Washington Post on its editorial page See CEQ Report for more on this Budgetpackage The action on the budget package is on the Hill reported below Like your other initiatives this one faces tough sledding Federal energy There are a number ofinteresting ideas on the federal energy side - such as If expanding Energy Saving Performance Contracts e g to leased federal and subsidized non federal facilities or assisting state and local governments to adopt ESPCs doing a new executive nrd r nn fftdftral pfp -nr tn« nt cpo«»H tVio acquisition of energy efficient equtpnteni a new partnership to improve the ener efficiency offederal aircraft ships and vehicles 43% ofthe government’s $8 billion energy bill an executive order to promote combined heat and power the Trigen idea electrifying the federal postal fleet We need a unified plan for federal energy built around these or other good ideas to be rolled out over the next several months I am pushing to get this developed rapidly Private sector collaboration This initiative will be ready to launch soon Preliminary meetings have been going on for several weeks both internally and with several industries and labor The basic idea patterned in part on DOE’s successful Industries ofthe Future program is to collaborate with the key energy intensive industries on establishing ambitious goals for reducing emissions as well as roadmaps for achieving those goals The dialogue will include exploring ways the government can remove barriers or otherwise promote energy efficient activity We are likely to begin consultations with the steel aluminum pulp and paper chemicals cement electric T ’J S - Lj power and airlines industries all ofwhom have expressed interest We will work with scheduling i to set up a meeting for you and the Vice President with top CEOs in the key industries to help I launch this effort and underscore its importance Diplomatic Situation The Kyoto agreement was an historic step forward but it left a substantial unfinished diplomatic agenda Developing countries must be engaged rules for emissions trading must be written the “Clean Development Mechanism” must become a reality Work is underway on many fronts The next full-scale international meeting following Kyoto will be in November in Buenos Aires with a preparatory mid-year meeting in Bonn in June Last month Stu Eizenstat hosted a meeting ofthe “umbrella group” -like-minded developed nations not in the EU who share our interest in a robust emissions trading regime Key players include Russia Japan Canada Australia and New Zealand Bilateral meetings are scheduled between many key countries including Russia Chile Brazil India Japan and others In early May key Chinese officials will be in Washington under the auspices ofthe Vice President’s environmental dialogue with Li Peng with climate change high on the agenda Climate change is on the agenda at the Summit ofthe Americas in Santiago April 18-19 and G-8 Summit in Birmingham May 15-17 In preparation for your Santiago state visit we are working intensively with the Chileans to fashion a forward-leaning statement on climate change similar to the “Declaration ofBariloche” you signed in Argentina last fall We expect climate change to be an important topic of discussion during your China trip in June Congressional Situation The first period of post-Kyoto hearings was reasonably successful Katie McGinty testified before the House Science Committee Stu Eizenstat testified before the Senate Foreign Relations and Agriculture Committees and the House Science and Commerce Committees Janet Yellen testified before Senate Ag and House Science Janet’s economic testimony went relatively well although there continues to be a clamor for more details concerning economic analysis The criticism of her testimony so far has tended to be that her scenario is overly optimistic about potential costs We face challenges this year on two fronts First the Senate budget resolution zeroes out our $6 3 billion climate change initiative as it zeroes out your other new initiatives In addition the resolution includes Sense ofthe Senate language saying that no funds shall be provided to put into effect the Kyoto Protocol language that is thanks to Sen Gorton actually better than what Sen Gramms initially proposed The Sense ofthe Senate language is of course non binding on the tax-writing and appropriating committees We are pursuing a strategy to frame our budget requests as making good economic and environmental sense — even independent of climate change - and seeking bipartisan support for our distinct budget requests We hope to have a bipartisan Dear Colleague letter and perhaps a bipartisan Sense ofthe Senate amendment T'-i H Ion the floor in support ofthe energy R D portions of our requests In the House we are siniilarly seeking bipartisan support for our budget proposals in the face ofunwarranted criticism 7 that such requests are merely a back-door attempt to implement Kyoto prior to ratification Second we are receiving extensive document requests We are working with Counsel's Office to fashion a response that will protect the integrity of our internal policy-development process without creating unnecessary additional controversy on the Hill over our climate change initiative J Communications Upcoming Events PA TH Energy Star Buildings Houses We are working on an event -- potentially for Earth Day — featuring three building sector announcements 1 launch ofDOE HUD Partnership for Advanced Technology in Housing PATH bringing the federal government together with construction insurance and financial industries to develop new technologies for building houses that will be far more energy efficient and durable and cost less to own and operate than conventional houses 2 announcement that Energy Star label will be available for retrofitting 1 houses with a checklist of energy efficient technologies 3 announcement that Energy Star label will be available for commercial buildings jBethlehem Steel On April 30 Bethlehem plans to be the 400th organization to sign on to EPA’s Climate Wise program at its Bums Harbor Indiana steel mill described as the newest integrated mill in the country and one ofthe world’s most efficient The event will occur in conjunction with a DOE Steel Technology Showcase demonstrating around a dozen technological advancements made through partnership activities between DOE and the steel industry NOAA We are working with NOAA on interviews for NOAA Administrator Dr James Baker ith some ofthe weather forecasters who visited the White House last fall The theme would be to report on this winter the warmest and wettest ever noting the effects ofEl Nino and stressing that although we cannot say at this time that climate change contributed to El Nino we can say that El Nino has shown us the kind ofsevere weather events we could anticipate in the warmer wetter world that climate change is expected to bring Science workshop On March 23 NOAA’s Dr Baker participated in a workshop in New York examining potential regional impacts of climate change — the latest in a series ofregional workshops cosponsored by OSTP Stories appeared in local tv radio and print media Affairs We arranged with Foreign Affairs to have them publish a response by Stu Eizenstat to a negative piece on Kyoto in the current issue and worked closely with State on preparation ofthe response It will run in the next issue Foreign Policy Validators We are working to arrange a VP Secretary of State dinner with major players fi om the foreign policy establishment to build support for the need for action on climate change and for our basic approach