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Melinda Kimble, Head of Delegation/Acting Assistant Secretary of State, Bureau of Oceans and International Environmental and Scientific Affairs, Ambassador Mark Hambley, Special Negotiator for Climate Change, and Dirk Forrister, Chairman of the White House Task Force on Climate Change U.S. Delegation to the UNFCCC Conference of the Parties-4 Press Briefing Buenos Aires, Argentina, November 5, 1998 (Link to Spanish version.)

OPENING STATEMENT BY MS. KIMBLE: Thank you, Susan. I think today was a very interesting day. We started to see basically the rubber meet the road, so to speak. The Contact Groups that worked through the day yesterday started talking about decisions. We have a draft decision moving on things like sinks; we have a number of papers produced either by individual delegations or groups now being floated for discussion, that includes three papers or three collective papers on flexible mechanisms, one from the Umbrella Group, one from the European Union which covers a number of areas, and one from Mexico. And I think what is most striking is the commonality between these papers, particularly the Umbrella Group and Mexico, and I think what we also see is striking points of common ground even with the European Union -- and even though the Flexible Mechanisms Working Group is not planning to meet again until tomorrow, we are working in informal discussions across this whole day on the ideas that were put forward in these various groups. So, I think that's encouraging and I might ask my colleagues Mark Hambley and Dirk Forrister to make a few remarks.

AMB HAMBLEY: Thank you very much, Melinda. I think as Assistant Secretary Kimble has indicated, what we are seeing I think is in fact the glacial progress, I think what we are seeing some real legitimate progress. It's very slow, to be sure, there's no doubt that the tasks ahead of the various Contact Groups are considerable. But I think the fact that large number of countries are engaged in trying to find productive responses to these very complicated issues is indeed forward movement and we look forward to continuing this process throughout this week until I guess our Monday or Tuesday deadline, whenever that is, thank you.

MR. FORRISTER: I thought I would offer just a couple of comments from the White House perspective to give some of you a sense of what's going on in the United States domestically and our action to combat global warming, because there has been a very vigorous plan emerging in the United States and for those of you that were a part of briefings that we did last time in Kyoto, it's actually gotten bigger and better, and I want to describe that for you just a little bit.

I think the first feature I want to point to is the President's Climate Technology Initiative which when we briefed in Kyoto we were expecting to be a $5 billion/five year plan. In fact when we went before the Congress earlier this year and proposed our budget, we proposed a $6.3 billion/ five year plan, and in the waning days of the Congress, achieved a good chunk of the first year portion of that in a last minute budget showdown with the Congress -- where we achieved an additional $130 million in the accounts of investments in renewable energy and other kinds of energy efficiency investments.

The key areas that those programmatic dollars are going to be going is into a partnership for a new generation of vehicles, our hallmark program with our automobile manufacturers aimed at tripling the fuel efficiency of our vehicle fleet of new vehicles by the year 2002. Also we have a partnership for advanced technology in housing that is advancing 50% more energy efficient homes over the next decade and 30% more efficient retro-fits. In addition to that, we have additional funding going into what we call our Energy Star programs that promote efficiency in an entire range of office products and home energy products, and put a little seal on them to show that they are the most energy efficient product with an energy star on them. In addition to that, we've got significantly more money in programs to propel wind, photovoltaics, and other forms of renewable energy into our market place.

The secondary progress that we have had underway has been in a set of very productive industry consultations with key emitting sectors, this is an effort to develop voluntary agreements to improve emissions for key emitting sectors of our economy. And I can't tell you that we have reached agreement with any industries yet, but I can tell you that we are in active dialogue with some of our most energy intensive sectors, notably the electric power sector, our natural gas pipelines, our steel sector, our aluminum sector, our cement sector, and our commercial building sector. So we have a great deal of activity under way in industry consultations.

The other thing that we have done this year to advance our domestic implementation is to propose electric utility restructuring legislation in our country in a way that would achieve greenhouse gas benefits. It's got a package of programs designed to achieve reductions in the electric power sector on the order of 25 to 40 million metric tons. Congress did not enact that legislation this Congress but it's something we are hopeful for next year.

In addition to that, we are improving our own performance as an energy user in the federal government by an aggressive program that will be launched through a series of Executive Orders building on existing legislative authority to improve the federal government's own energy efficiency in its facilities. This is all building on a strong portfolio of programs that were developed -- aimed at our year 2000 goal. We think that these are all going to deliver tremendous benefits both locally and globally, but it's a very strong package of initial efforts to improve emissions.

The other thing that has been a tremendous change in the United States that you can pick up information around the hall, as beginnings of a change in attitude in the business sector. We've seen the formation of several new initiatives between environmental organizations and our private sector and we've seen the formation of the Pew Center on Climate Change that has a very progressive set of companies joined on board trying to pursue action. You will see some of their exhibits out around the hall today and I urge you to take the time to talk with some of them and get a sense of the changing attitude in U.S. business. On the U.S. Climate Change Action Plan, I don't know how many of you have seen it but there is a nice package put together with a lot more detail than I am able to describe here, but I wanted you to have the sense that there is a great deal of activity underway in the United States in improving our greenhouse gas emissions efforts. VOICE OF AMERICA: We just heard the European Union's news conference in which they were saying that they expect the United States to take definite actions in cutting emissions before they would entertain discussions about flexibility in emissions trading, and so forth. Now what Mr. Forrister you were just talking about is there is anything specific in that you can offer in terms of how much the emissions would be cut through these various programs you were talking about?

MR. FORRISTER: I can't give you a firm figure. I gave you some figures in there about certain programs, but I guess I think the sky's the limit in some sense with these voluntary compacts that industries are sitting down and working through with us in terms of what they are able to put on the table. These discussions are aimed at looking sectorially at what's going on over the next decade and looking at ways that we can partner in terms of research and development programs or federal procurement programs or potential tax incentives to bring about an accelerated change in these key industrial sectors. There are other sectors that we hope to reach out to as well, but I really think that at this point in time, there's an awful lot of opportunity for firms to put tons on the table if you will but I haven't got quantified numbers yet, because those discussions are not completed.

MS. KIMBLE: I'd just like to add to that that it is very important to understand Kyoto agreed to flexibility mechanisms, four of them, and one of them is the European Union bubble. So, I don't think whether or not we use flexibility mechanisms is at issue here. That was agreed last year in Japan.

RADIO CANADA: Talking about the European Union bubble, the Europeans agreed that if you make your own bubble like with Canada and Mexico, there's no problem under the Kyoto Protocol. But they argue also that the flexibility mechanisms must absolutely be open to everybody and they would put a veto if a group of countries would try to have flexibility mechanisms just for themselves. So, what do you think about that? Is it possible to have flexibility mechanisms without the Europeans, if they require caps on flexibility mechanisms and you don't agree?

MS. KIMBLE: Well, somehow I feel like I'm back in Kyoto. But anyhow, the Europeans I think are mixing apples and oranges all the way around. I mean first of all the Umbrella Group has issued a number of papers, including a recent paper leading to decisions on flexibility mechanisms that makes very clear where we want to go on the mechanisms and this would be, of course, open to the European Union as long as they met the requirements required of every state who is going to enter the trading mechanism for monitoring, measurement, reporting and verification. So one of the things we wanted to ask the European Union is let's get the monitoring, measurement, verification, reporting systems right before we start talking about capping and compliance, because the way these mechanisms are designed is to ensure that they work almost in a self-enforcing way. And, our commitment at this meeting is to start the process of designing the system.

AMB HAMBLEY: I would just add that the various papers which have been submitted by the Umbrella Group of countries, those nine countries including Japan, the United States, Australia, New Zealand, Norway, Iceland, Ukraine and Russia, those papers have been offered in an effort to try and find areas of convergence to try and get the dialogue going in a positive way so that we can move forward from the decisions taken at Kyoto. And so I would hope that our European colleagues will receive those papers in that spirit so that we can indeed achieve progress at this meeting.

CLIMATE CHANGE NEWS AUSTRALIA: Madame, you mentioned I think in your introduction a draft decision on sinks. I just wonder if you could bear it, to take us through the highlights of that draft decision.

MS. KIMBLE: Well, this is primarily a process decision implementing our agreement in the course of the Bonn meeting to set up a working group to look at sinks both in Articles 3.3 and 3.4. The draft decision will refer to certain decisions that came out of the workshop that was held in Rome and talk about where we go from here. There will also be a portion citing the work on Article 3.4 which will highlight the fact that the United States has offered to host a workshop on the 3.4 mechanisms, and I think that probably captures it but Mark may have more information.

AMB HAMBLEY: I would just note that as we speak here, this Contact Group is at the moment meeting to try and develop draft language. It will draw upon the intervention made by the European Union on this particular topic, on an intervention made by the United States, by Australia, New Zealand and other countries -- Norway -- which have an interest in finding a good resolution to this problem. But the indications we have, as well as the G77/China has also introduced some modifications to the Chairman's draft text, but I must say that in sum that the indications we received from this Contact Group as of about 30 minutes ago was that they think they will come up with a decision which will be forward looking.

QUESTION: Developing countries' participation is a key issue for the U.S. Could you perhaps inform us on the progress in the informal consultations over the Argentinean proposals and do you know which countries have participated so far? And is there any key developing countries who have flatly refused to take part in such consultations? Thank you.

MS. KIMBLE: Well, since the United States is not in charge of the consultations it is a little hard for me to get into the details of them. I know that Argentina has been talking to a number of countries in the Latin Group and a number of other countries in the Group of 77, and within Annex I I know that all the countries have indicated their willingness to participate in whatever the Chair wishes to do on this issue, and I understand the Chair has received some encouragement from developing countries but I think this process is in its very, very beginning stages.

INTERNATIONAL WILDLIFE MAGAZINE: Mr. Forrister described a number of ambitious programs in the United States to ultimately reduce carbon dioxide emissions. U.S. has the least efficient motor vehicle fleet in the world and certainly among the least efficient power plant fleets in the world, and thus ample room....In light of this, is the United States willing to commit to any domestic reductions in greenhouse gases including carbon dioxide at all, concrete limits, say one pound?

MR. FORRISTER: We have committed to a 7% reduction in our basket of gases, contingent on the availability of flexibility mechanisms and we are not interested in setting specific limits. We want to develop an aggressive domestic program that allows firms the same flexibilities that are available to everyone under the Protocol. That would be our intention. The President has expressed his intent after moving through the phase of getting voluntary commitments from businesses and through tax incentives and other programmatic technology efforts, to move into a domestic emissions trading program over time. And that is our belief of where this is going. The President committed to that prior to Kyoto, believes that's the right direction for us to go domestically, but we want to take these other steps first -- build the system, get things on a better trajectory before designing our domestic emissions trading program. But that's clearly where it's headed and that will involve setting specific limits and specific sectors, and allowing tradeability among them but also tradeability outside.

We just think that it is a fundamentally inefficient economic message to send to the private sector to set any specific limits. I think it's been one of the beauties of our acid rain trading system that, Curtis, I know you know well, that is delivering environmental reductions way ahead of schedule and way below cost. And it's because it leaves the freedom of choice in the private sector to decide to how to go about making reductions and how much they do in their own plant, and how much they enter in joint investments or purchases from outside their systems. We think that free market mechanism is the best way to go, and we're going to stand by it.

INTERNATIONAL WILDLIFE MAGAZINE: So the answer is that the United States is unwilling to commit to a domestic CO2 reduction?

MR. FORRISTER: I'll stand by my answer.

NHK JAPAN BROADCASTING: How far or how narrow is the difference between the U.S. and the EU in terms of capping issues of emissions trading? Could you explain where we are in terms of this problem?

MS. KIMBLE: Well I think the United States believes there should be no concrete caps or quantitative caps on the trading mechanisms, on either CDM, Joint Implementation, or international emissions trading, and the European Union has said and while the European Union as a group has not defined certain numbers, many individual European countries have suggested figures like 50% and other figures like that, and much, much lower figures for the Clean Development Mechanism. And we clearly have a lot of concerns about this, one because it limits the cost effectiveness of the international emissions trading system, but two if you really severely restrict the opportunities available under the Clean Development Mechanism, the potential for transferring technology and new investment into developing countries is severely limited.

AMB HAMBLEY: I would just like to add that both the United States and its partners in the European Union and its associated states have recognized that we have this difference of view. But we came here frankly not to challenge each other on this particular point if at all possible, and to focus on those areas of convergence where we find a certain amount of commonality and try and make some progress in those areas.

MS. KIMBLE: I would just add I think that we are very much convinced if we build on where we agree, we will begin to see that it is less necessary to get into specifics about how much you can trade because as I said, you can design a system to be self-enforcing, self-regulating and clearly you can have a system that will draw both domestic and external reductions.

ORANGE COUNTY REGISTER: If you know, by what year does the administration expect U.S. emissions to begin declining?

MR. FORRISTER: That is a hard question for me to answer in the midst of the consultations we have underway with industry. I think once those conversations ripen over the next few months, and we get voluntary plans in place, which I am optimistic that we will achieve that with many of those sectors, although it is not a certainty that those sectors will want to enter commitments, but we are active in the conversation. Once we have those, we will be able to tally them up and give you a better sense, but it is still a little early for me to be able to do that.

USA RADIO: Two quick questions to take it back home, Mr. Forrister, like you started out. Can you kind of explain what the consultations are like, that you are having with the U.S. industry. I am married to a small business owner in Texas and I know the last person in the world that we want to talk to is the government. And the second question, quickly, you also said that you were trying to decrease, or make be more efficient the federal government in decreasing emissions. Can you explain how that will affect our U.S. military?

MR. FORRISTER: I will go to the first part and then turn to you on the military, maybe. My efforts and consultations are actually, I think, a very positive experience, although maybe you would want to test it with some of the business people who are here. But I seem like a nice enough guy, I think, so, generally what we are doing actually is beginning with sessions at a staff level with senior people from these sectors and large companies in these sectors that have expertise in the environmental area and we look together at where their emissions are going and what the opportunities are for improving their emissions. And then, generally after we scope it out a little bit, we've been bringing together Chief Executive Officers from those key companies into the White House for meetings with senior White House officials and senior agency officials from whatever agencies of expertise might be important for a particular conversation. Usually that involves our Environmental Protection Agency and our Energy Department, and oftentimes our Commerce Department or Agriculture Department, depending on the interest of the sector. And we are trying to get CEO vision set for these consultations and buy in at the CEO level to work together in a partnership in this effort..

But most of the activity, I have to say, is in the hands of the private sector. We offer whatever expertise we in government can bring to bear in a particular -- understanding what is going on with a particular sector. But in the end we are looking for agreements that do four fairly simple things. And in those agreements we are looking for firms to agree to take their own emissions inventory and measure their emissions on an ongoing basis. That is the first thing. Secondly, that they commit to undertake a bottom-up review of all the opportunities available in their sector. That thirdly they try to quantify a commitment, what we are calling a stretch goal, of where they think they could get if we in government partnered with them in removing barriers to technology deployment. And fourth, that as part of that setting of that stretch goal, they actually commit to an action plan of what they would be willing to do.

From the government side we are offering several ways that we think we could help in barrier removal, whether it's research and development partnerships, or tax incentives or procurement incentives. Probably the most powerful thing that we are offering, that I think you'll hear a lot of conversation in the halls or in private sessions here, is that we are assuring credit for early action that is taken. The President has personally committed to this, as has the Vice President, and now we are in conversations in these consultations, of specifically how we can do that. How we can ensure that firms that want to get ahead of the curve, that are forward leaning, from whatever sector, have a system to begin opening an early action account, an early banking account, and begin depositing emission reductions that they achieve in the near term. And I think this is a very positive area of conversation with our industries, large and small, and I have met with some small ones. I've even offered to meet with the National Federation of Independent Business, our largest small business group, and a personal childhood friend of mine is the head of that now. But he hasn't said yes, yet.

MS. KIMBLE: Just to briefly answer your question on the military. First of all, the United States Department of Defense, including the services, the operations, the installations of the Department of Defense, are the largest federal consumer of energy. But let me say this, since 1990 the Department of Defense has raised its efficiency and conserved greenhouse gas emissions at a very high rate. Efficiency, energy efficiency is a very high priority for the Department of Defense because they want to maximize every defense dollar. So the less they spend on energy, the more efficient they are at using energy, the better they are at doing other things in defense.

When we undertook the negotiation of the Kyoto Protocol, we were able to work very closely with the Department of Defense on two concerns they had, where {much} of their energy consumption continues to reside -- {international} bunker fuels (aviation fuel, and marine fuel). Those are {reported but do not count} under the Protocol. {The second concern was emissions from multilateral military operations pursuant to the U.N. Charter. Those are also reported separately.} Beyond that, to ensure that there is no, no threat whatsoever, to operational readiness or {training}, the President made a decision subsequently that {those domestic activities would not be adversely affected.}

But, at the same time I want to stress very clearly that if you in theory had a domestic cap and trade system, based on 1990 levels, and you permitted the Department of Defense to trade, they would have some of the largest reductions to sell in the United States. So I think the way you look at it is, you know, very innovative. I doubt that they will let the Department of Defense trade their emission savings, but I think we have to be very, very proud that the Department of Defense has been such a leader in promoting energy efficiency, particularly since they are a such a large consumer.

QUESTION: Do you have any new information on when the President is going to sign the Protocol?

MS. KIMBLE: No (laughter).

[end of document]

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