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Special Briefing on September 17-18 Meeting of the Major Economies Forum on Energy and Climate

Special Briefing
Todd Stern
Special Envoy for Climate Change 
and Michael Froman, Deputy National Security Advisor for International Economic Affairs
Washington, DC
September 18, 2009



OPERATOR: Welcome and thank you for standing by. At this time, all participants’ lines are on a listen-only mode. To ask a question during the question-and-answer session, please press *1. Please submit your phone and record your name clearly when prompted. Today’s conference is being recorded. If you have any objections, you may disconnect at this time.

Sir, you may begin.

MR. KELLY: Yes. My name is Ian Kelly. I’m the Spokesman of the State Department. I’d like to welcome you all to this press conference call which will be a readout of the Major Economies Forum on Energy and Climate which we’ve had here at the State Department September 17 and 18.

We have two speakers today. We have the U.S. Special Envoy for Climate Change, Mr. Todd Stern, and we have Deputy National Security Advisor for International Economic Affairs Michael Froman. We’ll start with opening remarks by Mr. Froman and then have some remarks by Mr. Stern and then we’ll open it up for your questions.

We have a total today of about 30 minutes. So Mr. Froman, if you could begin.

MR. FROMAN: Sure. Hi, it’s Mike Froman. As Ian said, I’m Deputy National Security Advisor for International and Economic Affairs. Over the past couple of days, I’ve chaired the Major Economies Forum on Energy and Climate. As many of you know, the Major Economies Forum, or the MEF, brings together the 17 largest developing and developed economies. And this was a meeting held at the leaders representative level. Those tend to be ministers of the environment, special envoys or special representatives of the head of state who are responsible for negotiating on behalf of their country on the climate change negotiations.

The purpose of the meeting was to build on the progress that was made at the leaders meeting in L’Aquila, Italy past – last July, and to explore concrete initiatives and ways of working through the issues necessary to reach a positive resolution of the UN negotiations – the UNFCCC negotiations leading to Copenhagen. The Forum also seeks to advance the exploration of concrete initiatives and joint ventures on technology cooperation and the supply of clean energy. And let me just briefly walk through the agenda and then turn it over to Todd, who will go into greater detail.

The meeting started on Thursday afternoon, and there was a general exchange of views about the role of the MEF and how it can contribute to a successful outcome in Copenhagen. We then moved to a discussion of adaptation and – followed by a discussion of ways in which countries’ mitigation efforts might be reflected ultimately in an agreement. Australia and Korea both made presentations on that subject. And this morning, the Forum reconvened at the State Department, where there was a discussion of technology and technology cooperation. As you recall, the leaders in Italy agreed to a robust technology cooperation program, and this was an opportunity to update on the progress that had been made since that time.

This was followed by an extensive discussion of potential frameworks for measuring, reporting, and verifying efforts undertaken by countries as part of the agreement. And there was some further discussion of how the mitigation efforts themselves might be reflected in an agreement. And finally, we concluded late this afternoon with an exchange about next steps towards a successful outcome in December. It was a very candid and open discussion, a very constructive tone. It’s exactly what the MEF was intended to do in terms of working through issues.

And now, let me turn it over to Todd to go into further detail.

MR. STERN: Thank you, Mike. I will just be very brief. I don’t have that much to add to what Mike just said. I would say generally that the purpose of this set of meetings that we’re planning to do this autumn, starting with the one today, is fundamentally to narrow differences in an effort to get us toward a successful outcome in Copenhagen. Obviously, what happens here has to be taken back into the formal negotiating process in the UNFCCC, the Framework Convention on Climate Change process. But this is an important – I think very important forum to be able to have candid conversation.

I think today and yesterday was a very good meeting. We went in depth on the issues that Mike talked about. We started off with a session led by South Africa on adaptation. We had a technology session that had been planned for 45 minutes and went for about two and a half hours. It was quite detailed and touched on a number of different kind of elements of the overall technology picture. There were significant interventions by many different countries, including the United States.

We spent a lot of time, both yesterday and today, and to some extent at a dinner that involved the heads of delegations last night, discussing how mitigation actions and commitments could be reflected. It is – that sounds like a technical issue, and to some extent it is, but it’s really important. I mean, it is clearly the case that countries, including the developing countries, are doing a lot at home. The question is how to capture that in an international agreement. And that’s the – that was the focus, centered around, as Mike said, presentations and a discussion led by Australia and South Korea. And then there was also extensive conversation today on, again, a technical-sounding but really important issue on how you measure, report, and verify actions and emission reductions.

I think that if you asked virtually any person coming out of the meeting, any of the leading participants in the meeting, for their view, I think you would find a quite positive feeling about the discussion over the last two days. I think there was some narrowing of differences. There are plenty of differences that remain. But it was a pretty full ventilation of views in a way that, as Mike said, the MEF is designed to promote.

So with that, I’ll take and Mike will take questions.

OPERATOR: Thank you. At this time, if you would like to ask a question or make a comment over the phone, please press *1. Please submit your phone and record your first and last name when prompted. To withdraw your request, you may press *2. Once again, to ask a question, please press *1. One moment, please.

Again, to ask a question or make a comment over the phone, please press *1. Please submit your phone and record your name clearly when prompted. To withdraw your request, you may press *2. One moment, please, for our first question.

The first question comes from Edward Luce of Financial Times.

QUESTION: Hi, could I – hi, Mike and Todd. Could I ask both of you to look forward a little bit to the G-20 next week? I know it’s not formally part of the G-20 talks, but climate change is sort of, by osmosis, entering many different fora and talks. And could you just flesh out whether we’re going to have any bilaterals or anything more formal at the multinational level next week in Pittsburgh after the – after UNGA on the whole climate change agenda?

MR. FROMAN: Well, Ed, as you know, next week is a climate-filled week, first with the Secretary General’s summit on Tuesday that the President will speak at. He will also attend a dinner that evening on climate organized by the Secretary – Secretary General. And as you also mentioned, there will be the G-20 summit Thursday night and Friday in Pittsburgh.

At the Major Economies Forum leaders meeting in L’Aquila, the leaders asked the G-20 finance ministers to take up the issue of climate finance and to do the work. There have been some very good working group efforts in that regard that were discussed by the finance ministers and central bank governors earlier this month in London, and there will be – there is likely to be some discussion of that among leaders at the G-20 as well.

It’s one of several issues on the G-20 agenda, as you know, including – there will be a discussion of energy security issues, more generally regarding disclosure in markets, and also with regard to energy subsidies and the impact that a reduction of subsidies might have on greenhouse gas emissions.

QUESTION: Thank you.

OPERATOR: The next question comes from Susan Goldberg from The Guardian.

QUESTION: Oh, hi. Thank you for doing this call. I wanted to get back to a point that if – to ask Todd Stern if you could perhaps give a bit more details about one point you made in how to recognize what developing countries are doing in the context of an international agreement. I’m taking that to mean you might perhaps be referring to sort of an announcement – the moves we’ve seen coming out of China, for example. I’d like it if you could give more detail.

MR. STERN: We – it’s not so much a question of recognizing what they’re doing, but establishing a mechanism by which countries can inscribe or indicate, in an international agreement, what they’re doing. And there have been two proposals made in particular – there may be others, but there are two kind of the most prominent ones made during the last number of months on this subject, one by South Korea and one by Australia.

Australia sets forth – has set forth a system of schedules, if you will, in which countries, both developed and developing, would enter their – in the case of developing – developed countries, their actual reduction targets below a baseline; in the case of developing countries, a set of actions that would be designed to reduce their emissions below a business-as-usual level. Australia doesn’t – their proposal doesn’t say, per se, either of those things. It sets up the structure by which those things could occur, and the nature of the commitments that would be made in each case. So – and then South Korea has something that they call a registry. Theirs is designed, in the first instance, as a mechanism for developing countries to register their national actions, again, intended to produce a reduction against business-as-usual.

And so there was a discussion, quite a thorough one, of both of those concepts.

QUESTION: And which one is favored, if any?

MR. STERN: Oh, I don’t want to characterize the – I think they were both seen as useful contributions with points that can be – that could be – that can provide a benefit to the overall, and it was a good discussion. I don’t want to characterize the – who said what about what, but I think it was – I think both of them were regarded as quite constructive proposals that could make a contribution.

QUESTION: But is there a sense now of sort of perhaps moving away from sort of setting a peak year or clear, you know, universal targets? Is that what this means?

MR. STERN: No, it doesn’t mean that at all. I mean, we’ve – the peak year concept has only really appeared in the context of the Major Economies Forum declaration, leaders declaration. We think that’s quite a good idea. It was included because a number of us pushed for it in Italy, and the concept was embedded in the leaders declaration, although not with any particular year. I think that there, part of the Copenhagen discussion involves some kind of long-term global aspirational – a target, whether aspirational or not, or a goal – goal would be a better word – and there’s different ways to think about that.

There were two different concepts that are potentially relevant discussed in L’Aquila, one having to do with a reference to the scientific – the broad scientific view that two degrees above pre-industrial levels is – Centigrade – is a limit that we shouldn’t go beyond, and then the other one, this peaking year idea. We didn’t discuss those ideas in this meeting, but they have – they are completely compatible with a South Korean idea or an Australian idea. The discussion about those ideas has nothing to do with, or doesn’t move toward or away from either of those ideas in the context of a longer-term goal.

QUESTION: Thank you.

OPERATOR: Joe Hebert from the Associated Press. Your line is open.

QUESTION: Yeah, Joe Hebert with the AP. Was there – has there been any discussion in these meetings in terms of the financing issue, or is that put off to some other forum?

MR. FROMAN: In – it’s Mike Froman. In previous MEF meetings, we did talk about financing. In this case, because the Major Economies Forum leaders had asked the G-20 finance ministers and working groups to explore the issue, it wasn’t on the agenda today because it will likely be taken up by leaders at the G-20 summit next week.

QUESTION: Okay. Thank you.

OPERATOR: Steve Power from Wall Street Journal, your line is open.

QUESTION: Hi, thank you both for doing this call. I was just wondering – first of all, Mr. Stern, you mentioned a narrowing of differences on certain issues. But I didn’t catch exactly where – what issues you were referring to there. So I was wondering if you could elaborate on some examples of where differences were narrowed.

And secondly, I was wondering if you could respond to – or comment on, rather – the comment yesterday by Ambassador Bruton, who said that if the Senate were to delay action on climate legislation until next year, it would open the U.S. to the charge that the U.S. does not take its international commitments seriously. Do you agree with that assessment?

MR. STERN: Let me take the first question first. On the narrowing of differences – and this will be a quick answer because I don’t – again, I don’t want to get into a discussion of the particulars of the substance.

I – we did – I told you what the issues were that we discussed, and so the – I think the narrowing had to do, actually, with all of those issues – adaptation, technology, the way you reflect mitigation actions, and the nature of MRV, again – measurement, reporting, and verification. Again, the narrowing doesn’t mean the differences have disappeared. It means that there was a thorough airing, people understood, and I think that there was a – I think there was a narrowing of differences, but they haven’t disappeared.

With respect to Mr. Bruton’s comment, of course I don’t agree with it. I think that the President has – came into office aggressively on this issue and has never stopped. You need to recall that $80 billion of our stimulus is devoted to green investments. That’s a huge amount. I mean, just as a matter of a point of comparison, we have – we average – we have averaged somewhere in the range of two, three, four billion dollars a year in energy – total energy technology spending. This is a huge commitment, and it happened because the President was personally – the President-elect was personally driving this all through the transition, where – I mean, I saw it because I was there and he was personally insistent on the inclusion of a strong green technology and investment part of the package.

Then EPA put in place the strongest auto standards that we’ve ever had in March, and then the House passed our comprehensive energy and climate change legislation, including cap-and-trade, in what has to be record time for a bill of that complexity and size, around Memorial Day. The Senate is now doing what the Senate does on large, complex legislation. It has jurisdiction in a number of committees. It is a highly consequential bill that probably affects every corner of the economy. They are also wrestling with major healthcare legislation. That’s the way our process goes. It may be that some people on the other side of the pond don’t understand the system that well, but that’s – that is the way our system works, and we’re pushing ahead.

QUESTION: Thank you.

OPERATOR: Our next question (inaudible). (Inaudible) line is open. (Inaudible) Chipman, your line is open.


OPERATOR: Go ahead.

QUESTION: Thank you. Sorry.

MR. KELLY: Who is this talking?

QUESTION: Kim Chipman from Bloomberg News.

MR. KELLY: Thanks, Kim.

QUESTION: Great. Thank you for doing this. I was wondering – I know that there’s been a lot of questions in the last few days about climate finance and how it’s going to play at the G-20. I was wondering, Mr. Stern, if you could talk about – if you could elaborate on a comment you made earlier this week at a conference about climate finance playing a bigger role in the upcoming remaining MEF and the outlook for coming up with more of a consensus, maybe some hard numbers, before Copenhagen. Or is that something that really can’t happen until the actual negotiations in December?

MR. STERN: Sure, Kim. This actually keys off of the answer that Mike gave to an earlier G-20 question. The President and leaders in the leaders MEF meeting in Italy in July agreed that finance ministers of the various countries would be asked to take a look at the financing question, which is what they have been doing and what Mike referred to with respect to the upcoming G-20 meeting in Pittsburgh.

In light of that referral, if you will, and in light of that meeting which is happening just, obviously, a week after the MEF meeting that has just concluded, we decided, partly as a tie, as a matter of sort of apportioning focus and partly as a matter of managing time, which is always too short to cover the issues that need to be covered, we decided we would not pick up financing in the MEF right now since, again, the G-20 was picking it up next week.

What I said earlier in the week is that in the subsequent MEF meetings this fall which we anticipate having in October/November, I would fully expect the finance issue to come back into the MEF discussions themselves. So that’s what that reference was. I certainly hope that we can make good progress in coming to a consensus with respect to a number of the critical financial issues. There are a lot of – there are actually a lot of important questions that have to do with kind of the structure, architecture of a financial package – where the money comes from, what – how it – the institutions through which it’s channeled, how decisions are made with respect to financing, what the governance is for controlling – for making those decisions, et cetera.

I think there’s a lot to be done. There has been a lot of work on that already, but I think there’s agreement to be reached on those issues. And I think – I don’t know whether there will be hard numbers before Copenhagen or not. There will certainly be discussions of at least indicative amounts.

QUESTION: Thank you. May I ask a quick follow-up question? Senator Kerry said earlier this week he was disappointed that climate finance wouldn't be a larger part of the agenda at G-20. When President Obama called for the finance ministers to report back, did the Administration expect it to be a larger part of the agenda, or is this always what it had in mind, or did the London meeting affect how it’s playing out in the Pittsburg meeting?

MR. FROMAN: I think this is – this is Mike. This is, I think, what we always had in mind. Just you have to recall that the G-20 agenda is primarily focused on the response to the international economic and financial crisis, where we are in the recovery, steps that need to be put in place to prevent future such crises, reform of international financial institutions, development policies, as well as trade. So it’s a broad agenda over what is effectively about eight hours of discussion among leaders. And climate finance will be one of the issues on the agenda, but it was not intended to be the major focus.

QUESTION: Thank you.

MR. KELLY: This is Ian Kelly. We only have about five or ten minutes left, so if we can just limit the questions to one so we can get as many in the next five or ten minutes as possible.

OPERATOR: Our next question comes from Min Xiong from the 21st Century Business Herald China.

QUESTION: Thank you. This is Min Xiong from 21st Century Business Herald China. My question is to Michael Froman. Can you tell us what kind of tone you’re trying to set for the upcoming G-20 summit, and can you explain the dynamics in the exit strategy designing process?

MR. FROMAN: I think the tone for the G-20 – let me take a step back. If we go back to the G-20 first summit meeting in November in Washington and then in April in London, there has been an unprecedented degree of concerted action among countries to deal with the international economic crisis, in putting forth stimulus packages, looking – fixing financial systems, putting in place new regulations, and at Pittsburgh we will be looking forward to also laying the foundation for balanced and sustainable growth going forward. So we expect the tone to be very constructive in nature, reflecting a very strong degree of coordination among the G-20 countries that has developed over the last ten months.

MR. STERN: Can we have the next question?

OPERATOR: Our next question comes from Gloria Gonzalez from Environmental Finance. Ma’am, your line is open.

QUESTION: Yes. Just to follow up on the question earlier about the Senate, I’m just wondering, Todd, if you could give me a sense of what you would like to see happen, given the talk of pushing back the climate bill until next year. What do you see – what do you need to see happen in order to help you in terms of the negotiations? Is it enough to have sort of a committee vote or does a full vote of the Senate – is a full vote of the Senate needed to get to an international agreement?

MR. STERN: I have said on many occasions, including in testimony I gave in the House last week, that we would like to see the maximum possible action, which means passage of the bill and enactment of the bill into law before Copenhagen, if that’s possible. If we – if it doesn’t get that far, we want it to get as far as it possibly can. I don’t think it’s – it is not the case that if the bill doesn’t pass, we have no capability of moving in Copenhagen. But it is – the more positive action that can be taken, the better.

The people who I interact with internationally watch this very closely. They watched the Waxman-Markey bill move through the House. And each step along the way, they were gratified and pleased when it moved through committee. They were more gratified and pleased when it moved the whole House. So each step along the way is a – is very useful and helps the U.S. in terms of both leverage and credibility.

OPERATOR: Margaret Warner from NewsHour, your line is open.

QUESTION: Hi, Todd. My question is what would you consider – what is your definition of success out of the “climate change summit” next Tuesday? What do you actually want to achieve there, I mean, other than, you know, conversations, and so on?

MR. STERN: Well, look, the – I think that we’re looking for this President to make a strong statement. It’s an opportunity for him to speak before the nations of the world on this issue. And I think in that respect, that is – that’s a good opportunity and one where I think he will again have an ability to articulate in a particularly relevant forum what the U.S. has done, where the U.S. stands, where the U.S. thinks this process needs to go, and I expect that he’ll do that.

In terms of the overall meeting, this is – at some level, that’s a question more to direct toward Ban Ki-moon and the UN. They – it’s a summit that they set up. But in terms of what we hope to achieve, I think it’s along the lines of what I just said.

MR. KELLY: Yeah, this is Ian Kelly. I think we have time for two more questions.

OPERATOR: Fiona Harvey with Financial Times. Your line is open.

QUESTION: Oh, hello. Yes. My question is about carbon trading. I’d like to know whether carbon trading was discussed today. And I’d like to know what the current state of discussions is on carbon trading, a global carbon trading mechanism, and the governance thereof.

MR. STERN: Hi, Fiona. It wasn’t discussed per se today. I think that it is broadly recognized that carbon trading is an important part of an overall ultimate agreement. It is – a lot of static on the line.

STAFF: Excuse me, can we have someone mute their – Fiona, can we have someone mute your speaker?

QUESTION: I’m sorry?

STAFF: Can you please mute your speaker? We’re getting a lot of static.

QUESTION: I’m sorry, I don’t have a speaker.

MR. KELLY: Phone – your phone.

QUESTION: Yeah, I’m sorry. I don’t know how to mute it.

MR. STERN: Okay. It’s okay. All right. We’ll carry on. Fiona, the short answer is we did not discuss it. It’s clearly – it’s a clearly important issue. It’s highly relevant to the movement of carbon – of finance to the developing world, and an important way in which developed world companies can meet various kinds of commitments.

So it’s important. There are discussions about the offset system and such that have been going on at – I think at a fairly robust level in the UN negotiating context, but not – we have not discussed it per se in the MEF.

MR. KELLY: And the last question?

OPERATOR: Our last question comes from Traci Watson from USA Today.

QUESTION: Mr. Stern, you said last week and – to the House that countries needed to get a little bit more pragmatic to reach success at the end of the year. Have they reached the necessary level of pragmatism at this point?

MR. STERN: We’re working on it. I think that – as I said before, I think this was a very good meeting in the last two days, and I think that moves in that direction. I mean, my basic view here is that there are a handful of really important issues that are core to getting to get a deal done, that there is a deal there to be done if countries evaluate what they can do on the basis of their own real interests, their own economic, material, and political interests. There is a lot of ideological baggage that has been carried – that has been sort of part of the DNA of these negotiations for the last 17 years. And that kind of baggage can hang you up and make agreement hard to get.

I think if people can focus on their real interests, what they can do, what they can’t do, respecting everybody’s own legitimate constraints, there’s a deal there to be done. I think that we will get a deal done, but that’s critical. That pragmatic viewpoint is going to be critical to having that happen.

QUESTION: Thank you.

MR. KELLY: Thank you all. We should have a transcript of this, and thank you for your participation.

OPERATOR: Thank you for participating. Today’s conference has concluded. Please disconnect.

PRN: 2009/943

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