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Stuart Eizenstat, Head of U.S. Delegation/Under Secretary of State and Todd Stern, President's Climate Change Coordinator U.S. Delegation to the UNFCCC Conference of the Parties-4 Press Briefing Buenos Aires, Argentina, November 12, 1998 (Link to Spanish version.)

OPENING STATEMENT BY MR. EIZENSTAT: Good evening. As you know, I announced earlier that the United States would today sign the Kyoto Protocol. I am pleased to report that Peter Burleigh, our Acting Ambassador to the United Nations, in fact, signed the agreement at the United Nations just before 3:00 p.m. New York time. Our signing reaffirms America's commitment to completing the critical work begun in Kyoto. It ensures not only that we will stay engaged in the process, but in fact that we will have a stronger, more credible voice at the table for shaping the critical decisions we face. One of the most important is ensuring that we achieve our ultimate goal -- preserving our planet -- by harnessing market forces rather than ceding the table to those who would rather use heavy taxes and regulation. Our signing puts to rest any doubt that the United States would back out of the historic agreement we forged in Kyoto. If anything the mounting evidence of global warming over this past year, has strengthened our resolve. We are encouraged by the growing indications, both leading up to this conference and here in Buenos Aires, that many others have committed to stronger action as well.

Among developing countries, and among our partners in the private sector, there is a new openness to engage and to act. Major corporations are pledging significant reductions in emissions. Argentina yesterday became the first developing country to pledge to take on a binding target. Today, Kazakhstan announced its intention to join Annex I and Annex B. We have seen a real sense of engagement on the part of the G77 to all these issues, including flexible mechanisms, and not simply outright hostility.

Few would have predicted a year ago in Kyoto that we would advance so far in such a short time. It's against this backdrop that America today signed the Kyoto Protocol. We still have a very long way to go. We believe the Protocol serves our environmental, economic and national security goals. I'd like to emphasize that signing does not legally bind us to implement the Protocol. That can occur under our Constitutional system only with the approval of the United States Senate. The President has made clear, and we will reiterate, that we will not submit the Protocol to the Senate without the meaningful participation of key developing countries.

At the same time, signing sends a clear signal to every nation here that we will work with them to meet this profound challenge. Our message is heard. Ministers and delegates from many countries, both developed and developing, told me today how gratified they were by our signature. I sincerely hope our action today helps move us together along the path of turning the promise of Kyoto into a reality. However, no act by any one country can guarantee a positive outcome to our deliberations. So, too, our signing doesn't guarantee a positive outcome at Buenos Aires. We need to see this as a long distance race. These are difficult negotiations. This promises to be a long night with no assured results.

Let us remember, though, that as we confront a challenge so long in the making, we can not measure success, moment by moment or day by day. Indeed in many respects we have had such significant successes with the decision of Argentina and Kazakhstan already. Our goal must be to sustain the momentum that grew out of Kyoto, and in that I believe we have so far succeeded even beyond expectations. I'll be glad to take your questions.

REUTERS: You mentioned Kazakhstan. I was just wondering what the decision making process will be by Annex I, or {Annex} B countries, as to their inclusion, and will they be given a target? When? Is there any opposition to their joining? Second question is, the EU has said it would seek to extend funding from mechanisms for adaptation from the CDM to include JI and the emissions trading, and is that a battle that the U.S. will fight this evening, or is that something for COP-5?

MR. EIZENSTAT: With respect to Kazakhstan, by indicating a desire to become an Annex I and then an Annex B country, they will go through a profile, which they will receive assistance in doing, to measure their emissions-established baselines, determine what targets they might take under Annex B, and assume all the obligations, including reporting obligations that Annex I industrial countries have. I am hopeful that that process can be completed by the next COP. It's their process, of course, I can't speak for them. But by making this commitment, it is a very significant commitment. And, remember that Argentina is a developing country, so it was not suggesting joining Annex I. It was suggesting finding a new way to take a commitment. So, this is a welcome addition to the Annex I family.

With respect to extending this adaptation concept to other mechanisms, we have in {the} Kyoto {Protocol} a very clear understanding that there is to be an adaptation fund created by a small share of the credits that come off of each CDM project. There is nothing either in the language or in the spirit of Kyoto that would suggest moving that to additional flexible mechanisms. That would, in effect, be trying to renegotiate Kyoto. It would also complicate the operation of the other market mechanisms, and we do not support it in any way, shape or form, and we will oppose it.

INTERNATIONAL WILDLIFE MAGAZINE: When you were in the Carter administration White House 20 years ago, you were a leading advocate of the same kind of least cost environmental policies that you are now advocating in an environmental context. Since that time you were in the White House, the U.S. has lost dominance, and in some fields, even presence, in scrubbers, selective catalytic reduction, catalytic converters, wind and solar energy, advanced coal combustion, combined heat and power, high fuel turbines and other technologies that make clean growth possible. Hundreds of business executives have told me that this collapse of U.S. leadership is a direct result of least cost, short term policies of the sort you are now advocating. Do you agree with this, and if not, how do you explain the flight of these clean technologies from America?

MR. EIZENSTAT: Well, I thought you were going to say that since I was in the Carter White House 20 years ago, I had lost a lot of hair. I think that we did lose the election in 1980 but I am not sure it is for the reasons you are suggesting. That is just so patently false. We have never had a stronger economy. When I was Under Secretary of Commerce, before I took this current position on at State, we established an environmental export unit. It was the fastest export we had in the United States -- of clean technologies. Indeed what we are finding is that as developing countries develop a clearer sensitivity to the environment, quite apart from Kyoto -- clean water, clean air -- they are demanding the kind of technologies, Honeywell, for example, that U.S. companies are world class competitors in providing. So we set up a whole separate unit at the Commerce Department just to handle the tremendous volume. So, I frankly don't accept your position. I think we are world class leaders in all of these fields and I think there are very few countries in the world that wouldn't prefer to exchange our economy for theirs.

LE MONDE: I understand that you discussed in the group of the "friends of {the} President" on the timetable or action plan or mandate. I wanted to know if the U.S. delegation will accept that question of transfer of technology and of selling {sic...on domestic}, policies and measures will be on this action plan?

MR. EIZENSTAT: Technology transfer is an area that has been debated and is fairly close actually to decision. It is one of the areas that progress is being made on. The issue of policies and measures -- our reading of Kyoto is that coordinated policies and measures are only called for after the Protocol goes into effect. We think that's the clear reading of the Protocol. Number two, having been a veteran of Kyoto, this was one of the most hotly debated issues there because the Europeans wanted to require coordinated policies and measures, which is a code term for higher taxes and more regulation, on a coordinated basis. We rejected that and it is in Kyoto a discretionary. If they want to do that to themselves, it's up to them. But, we are not required to follow them. Third, this issue is an eleventh hour issue which by their own admission never went through the SBI, or other subsidiary processes, and has been thrown in at the eleventh hour which is not productive.

AUSTRALIA MEDIA OUTLET: You mention that one of the striking elements of this conference to you has been the advancement of the private sector's penetration or involvement in the issue of climate change since Kyoto. I would like to invite you -- or, it seems to me that has been marked principally by larger multi-national or national companies, certainly presenting here at Buenos Aires. I would like to invite you to forecast the future, if I may, between now and COP-5, in terms of how much that involvement of the largest of those companies will be a driver to a more, perhaps even spread, of industry?

MR. EIZENSTAT: That's a very important question. Let me just step back one year and recognize the very strong opposition that we saw in so many quarters, at least in the United States to Kyoto. And now look forward to the fact that we've got literally dozens of companies, world class companies, who want to be part of the solution; who have formed groups to try to make Kyoto work. Just today, literally today, the Southern Company -- the largest utility in the United States -- put out a very strong, positive statement about Kyoto, about participating in it, about making it work, about making the flexible mechanisms work. This is a sea change in the position of many companies. I don't want to in any way underplay the continued opposition of other large segments of U.S. business, but it's there. You are quite right that these are larger companies and let me suggest two things in that respect.

First of all, we have reached out very aggressively to the agricultural sector, made up by almost definition, smaller business units -- although obviously there are some large companies like Cargill and others -- but I mean smaller business units. We have talked to farm organizations who, again, had been very dubious. I'm not trying to speak for them and suggest that they've turned overnight into great supporters. But they are really willing to listen; they are open. We have had good debates and good discussions. We also have had, and maybe Todd could talk about this, a domestic outreach program which has included small and medium size businesses and Todd can talk about that now.

MR. STERN: Thanks, Stu. We have had quite an aggressive program going, run out of the White House Task Force on Climate Change, and with cooperation of a number of other agencies of the Executive Branch in the U.S., in which we have met with probably a dozen or more sectors of U.S. industry, and at the top management level with six different major sectors. Those sectors include steel and aluminum, electric power, cement and others -- forest products. It includes both large companies and smaller companies in those sectors and we have had quite positive dialogue at this point. We are working to encourage those sectors to undertake voluntary policies to reduce their emissions, improve their energy efficiency and have engaged, and are engaging, in an active process to seek ways in which we, as a federal government, can help to make their efforts go even more positively. So, this is a beginning and we will be extending that outreach program significantly in the year ahead and in the years after that.

MR. EIZENSTAT: May I just supplement Todd's remarks by one point. I think that one of the things that will be a driving force for smaller businesses becoming more engaged in this process will be the early credit bill that Senators Mack, Lieberman and Chafee have introduced. This will encourage early action. It will incentivize small and medium size, as well as large companies, to begin making their commitments. Interestingly, although again this is larger companies, a number of the larger companies that I have mentioned, have actually made commitments to reduce their greenhouse gases at levels below our own obligations in Kyoto. In addition, there are some multi-national companies that have large operations in the United States, like BP, that are actually starting their own internal trading system between their units to show that trading works, not just at the national level where we have already demonstrated in our acid rain program, that you get compliance. We've got almost an 100% compliance; we have 30% faster reductions; and we have 50% lower costs than had been anticipated. So we have proven it at the national level, these companies are trying to prove it in the intra-company level and that's also a very positive development. By the way, they are also talking about trying to encourage their suppliers who are small and medium size businesses, many of these companies, to get more engaged. So the large companies are going to set examples for smaller companies.

VOICE OF MEDITERRANEAN RADIO: You said earlier in this press conference, Mr. Eizenstat, that the U.S. wanted to see meaningful commitments from key developing countries. Now who are these key countries and how many of them are there? Does this mean also that you have a difference with the business roundtable that would like to see obligatory reduction of emissions for every developing country?

MR. EIZENSTAT: What we have said is that there will be a critical mass of countries that fall into various categories. Some will be those countries -- developing countries, who are high income developing countries -- some approaching, and indeed some exceeding, the per capita incomes of developed countries. There are other developing countries who are what we call middle-income, middle emitters. Argentina would be an example. There are still other countries that are huge emitters with low per capita incomes. And, there is another category of country, that are both low emitters and low income people -- Sub-Saharan African countries would be an example. The types of commitments that one would expect might vary depending on which category they came in. We recognize that they all can't take the same kind of binding commitments. They will differ depending on their circumstance.

One of the things also -- and I think this is misunderstood in a very real way and I'm glad your question gives me an opportunity to explain it -- what Argentina suggested is something that we think fits many of these countries, not all, but many. And that is what I would call an abatement target rather than a net reduction target. The Annex I countries by and large -- Australia is an exception -- have decided to take net reductions from their 1990 levels by the year 2010. What we would consider meaningful participation by many, not necessarily all, but many developing countries, would be taking a growth target so that emissions could grow but at lower than a business as usual basis.

NHK BROADCASTING: Do you expect to see some kind of results in terms of the participation of developing nations other than Argentina and Kazakhstan during this COP-4 meeting?

MR. EIZENSTAT: We have gotten some indications of that. I think we will have more to announce tomorrow because there are still some discussions going on, but I would not be surprised. I can't forecast it, but I would not be surprised if that might happen.

Thank you.

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