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Ambassador Mark G. Hambley, Alternate Head of U.S. Delegation and U.S. Special Negotiator on Climate Change and Mr. Jeff Seabright, Executive Director of the White House Task Force on Climate Change Press Briefing by the U.S. Delegation to the Fifth Session of the Conference of the Parties to the U.N. Framework Convention on Climate Change (COP-5) Bonn, Germany, October 25, 1999

Ambassador Hambley: Thank you and good afternoon everybody. It is very good to be here in Bonn--back in Bonn for many of us, who have been engaged in this process for a number of years. Bonn has been a very good home for us as we have tried to move forward on the challenges of climate change.

I'll just begin my remarks by thanking very much Environment Secretary of Argentina, Maria Julia Alsogary, for her dedication and hard work as the President of the Conference of the Parties through the Buenos Aires process up until today. I would also like to take this opportunity to welcome and congratulate Jan Szyszko of Poland for his election as President of the Conference of the Parties. This is a critical period of time in the climate change negotiations, and we are very pleased that President Szyszko, we hope, will help guide us through the discussions here in Bonn and throughout the coming year as we move towards COP-6.

I would like to start with a few key points on the U.S. perspective going into COP-5 and then we'll be happy to take your questions.

Let me begin by noting that, as I think many of you have reported, COP-5 is expected to be largely about process. However, the United States believes that this is critical process. The U.S. objectives here in Bonn are multiple. First of all, consensus on a clear workable process to complete the work outlined in the Buenos Aires plan of action is one key objective. We must establish clear guideposts for our efforts over the coming year if we are to ensure a successful outcome to COP-6.

Second, a mandate to develop negotiating text on the Kyoto mechanisms is another key objective. Negotiators need to have actual text soon if they are to get the job done in a timely fashion.

Third, the U.S. hopes to seek continued forward momentum on developing country efforts. We were very encouraged by developments last year in Buenos Aires, including commitments by Argentina and Kazakhstan to take on voluntary emissions targets and we are hopeful we will see more progress in Bonn.

The United States is fully committed to meeting the challenges of global climate change, both through strong domestic actions to reduce greenhouse gas emissions and by working with other nations to achieve agreement on sound, cost-effective global strategy. Over the past year the United States has launched significant new domestic actions to reduce its greenhouse gas emissions. These actions are taking place at the federal, state and local levels and throughout corporate America.

Joining me to day is my colleague, Jeff Seabright, with the White House who can answer in detail any questions you may have on U.S. domestic actions. I hope you will ask him questions because I think this is one area where we very much want to give you some clarity. Jeff is also an expert on the issue of technology transfer please feel free to ask him questions in that area too.

In closing, I'd like to add a few, observations. The United States, first of all, is fully committed to completing the work begun at Kyoto and looks forward to addressing the critical issues of cost and developing country participation so that the treaty can be ratified. But much remains to be done.

On the issue of cost, the United States will continue to insist that nations must be free to make full use of Kyoto's flexible, market-based mechanisms such as emissions trading. Limiting this ability would only make reducing greenhouse gases more expensive for everyone with no gain to the environment.

On the issue of developing country actions, we fully support developing countries in their efforts to grow their economies and improve the well-being of their citizens. We also firmly believe that this goal can be achieved without repeating the wasteful and polluting practices of the past century. Many developing countries have resisted making commitments to limit their emissions, because they believed this would constrain their ability to grow economically. We believe that this premise is false. We are committed to creating sustainable development opportunities through Kyoto's Clean Development Mechanism and through other partnerships between developed and developing countries.

In short, the U.S. objective for Bonn is to achieve the progress necessary to ensure that we can complete the important work begun in Kyoto by COP-6.

Thank you. I'd like to ask Jeff to make a few comments as well.

Mr. Seabright: Thank you very much, Mark.

Even as we meet here in Bonn to complete the important work begun in Kyoto, in the United States under President Clinton's leadership and Vice President Gore's leadership we are moving aggressively to take action on climate change at home.

Just during the past year, President Clinton launched a variety of initiatives that will help address climate change. In August he announced an Executive Order that will call for the tripling of the amount of bio-energy in the U.S. energy economy by the year 2010. This Administration commitment will reduce U.S. greenhouse gas emissions by up to 100 million metric tons of carbon equivalent. The equivalent of taking 70 million cars off the road.

In a separate Executive Order, also announced this summer, the President directed the federal government, which is the largest single consumer of energy in the United States, to reduce its greenhouse gas emissions from energy use in federal buildings by 30 percent below 1990 levels by the year 2010.

At the same time, this Administration continues to push aggressively on research and development in clean energy technologies through the Climate Change Technology Initiative, and a comprehensive package of tax credits to address energy efficient homes, cars, clean power and other issues. Across the board, there is a very strong commitment at home to address climate change at the federal level.

I would also like to point out that actions in the United States are not limited to the federal government alone. Important initiatives are taking place at the state government level, at local municipal levels and in corporate boardrooms. Some of you may have seen the recent announcement of DuPont Corporation in Washington last month. They announced that they would reduce their net emissions as a corporation by 65 percent below 1990 levels by the year 2010.

These are important efforts that are taking place across the United States, and many of these are documented in a brochure which I believe has been made available to all of you in the press packet, and I would certainly encourage you to take a look at the information contained therein. They are real actions that are leading to real reductions in the United States and they are a clear demonstration of the depth of the President's commitment to this issue. And for those of you who maybe covering the White House from time to time know, this President is deeply engaged on this issue and has been speaking out on climate change to the American people on a weekly if not daily basis.

I will be available for follow up questions after this session. You can be in touch with me or Paul Bledsoe from the White House Climate Change Task Force, who is our Communications Director. Thank you.

Question: Adam Tanner from Reuters. In this morning's speech, Chancellor Schroeder endorsed approving and implement the agreement before 2002. Is that something the U.S. also embraces or do you think it is unrealistic to have a 2002 date?

Ambassador Hambley: We're not talking about any date. I think the sooner we can fulfill what we need in order to present this agreement to the Senate for ratification, the better. And by that I mean we need to satisfy ourselves regarding costs and regarding developing country participation. I think we are now in a process here in Bonn at which we are going to try to get some of the ingredients available so we can move ahead towards getting this done by COP-6, and once we have that satisfied, we will be able to initiate the ratification process with the U.S. Senate.

Question: Is it realistic by 2002 that there will implementation of this agreement or is it a pipe dream?

Ambassador Hambley: I'd say it is not a pipe dream. It is certainly within the realm of possibility.

Question: Christian Schwaegerl, Berliner Zeitung. If climate protection measures don't necessarily harm the economy as you pointed out, and if you are taking such strong action, why is it that the U.S. is opposed to a 50 percent cap and the EU wants it?

Ambassador Hambley: Our arguments against the EU cap, this artificial ceiling, is basically based on the premise that we believe that any artificial ceiling on these mechanisms would, in fact, detract from their utility--would detract from their attractiveness to the private sector, which must be fully engaged in order to make them work and it would, in fact, raise costs. We want to achieve these reductions with the lowest costs possible and that means no caps on these mechanisms.

Question: Of course, the argument put forward by the EU is that you would actually produce what is called "hot air," that you could buy emissions licenses from Russia, that would not actually reduce the total amount of CO2 being emitted into the atmosphere.

Ambassador Hambley: We have heard this argument and it is an argument, that certainly has to be responded to. But I must say that looking at the enormity of the U.S. target, we are going to have to take domestic action. There is no doubt of taking domestic action. In order to trade emissions on the scale which I think many people think would be required in order for us to buy our way out of this agreement, [inaudible] which I don't think will be in place in time for us to do that frankly. I think what we are looking for is to put in place mechanisms which have valid measurement. We want to make sure every trade has an environmental aspect to it and that takes some time to do. We look forward to trading with whatever countries are available which want to trade with us. But first we have to get these mechanisms developed in a way which they have an environmental impact, also in ways that are properly monitored and verified and reported.

Mr. Seabright: I would just add to that, that achieving the least-cost reductions is critical to our ability to conclude a ratifiable Kyoto Protocol and clearly emissions trading, unrestrained emissions trading, is economically and environmentally essential to that goal.

Question: At the previous press conference the EU delegates said that they feared with this unlimited trading, that half the reductions under the Kyoto Agreement would come from the United States buying hot air and half of it from the world actually achieving a true reduction. Do you dispute these figures?

Ambassador Hambley: I don't know where they get those figures from... anybody can draw up figures like that in a notional sense. We are all in this to try to benefit our environment, at the same time we don't want to damage our economy. Now in order to do that, obviously there are going to have to be arrangements taken domestically, we know that. We have very ambitious programs already launched as Mr. Seabright has already indicated. Additional programs will come on stream, will come into play once the Kyoto Protocol is implemented. But until that time we can't take certain actions domestically. But I think trading programs do give us additional options. That's the whole reason why we've introduced these flexible mechanisms in the Kyoto Protocol to begin with. It is an additional option, additional way to assist us to reduce our overall costs in the most cost-effective manner.

Question: Christian Schwaegerl, Berliner Zeitung. If my figures are right, the U.S. carbon dioxide emissions have gone up since 1990 from about 5 billion tonnes to 5.8 billion tonnes. That's quite an impressive increase. Could you detail which proportion of the reduction, the seven percent reduction, under the Kyoto Protocol, should be made domestically and which by trading and by flexible mechanisms? What sort of proportions have you got in mind there?

Mr. Seabright: Well, we don't have a fixed percentage which will be taken by domestic action versus trading. We intend to implement a cap and trade system at home and allow market mechanisms to achieve the most cost-effective reductions domestically, and hope that the same would apply internationally.

Ambassador Hambley: I think as well, one should also note that although we have had indeed an increase in our greenhouse gas emissions since 1990, that's based on reasons which are quite understandable.

First, our economy has been booming and as an economy booms greenhouse gases increase. In addition, energy prices have throughout this period of time, from about 1994 in particular, have been rather low, very low, historically low. They are only now coming back up again. That also has unfortunately been a disincentive for reducing energy consumption and of course that has resulted in increases as well in terms of greenhouse gases.

And thirdly, we've had a number of voluntary programs that have been successful in the United States. I know they have not had a very good reputation in other parts of the world, perhaps in Europe, but in the United States voluntary programs have been very successful in reducing greenhouse gases and methane particularly. We have met our obligations under the Protocol using methane programs by 2010. But that aside, I think when you look at the percentage of increase I think that you'll find whereas it jumped quite a bit between 1995-1996, the last figures available between 1996-1997 show a very distinct downward trend. And it is that downward trend we are going to try to capitalize on in the near future.

Mr. Seabright: I would just add, that from 1996 to 1997, our emissions increased by 1.3 percent, down from a 3.3 percent increase of the year before. In the period 1997-1998, GDP growth was 3.9 percent and emissions growth was only .4 percent. Now there are various factors that go into those numbers but that is certainly the right trend.

Ambassador Hambley: There is another point which is important. The argument is made that if the U.S. trades, this will eliminate the benefits of Kyoto, and that is not the case. With or without trading, Annex I is obligated under Kyoto to reduce overall emissions by 5.2 percent below 1990 levels by the timeframe 2008-2012. So I think a lot of these arguments about trading are rather bogus. The trading, in fact, gives governments incentives to reduce greenhouse gases. What we have found with our sulphur dioxide trading program, which is the only extensive trading example in the world, is that by having an unfettered system of trading, we in fact exceeded the amounts of reductions in sulphur dioxide by a considerable margin. And we hope the same thing will take place with carbon.

Question: Carmen Valero from Agencia EFE: Would you please identify the developing countries that you would like to have on board, to announce commitments here?

Ambassador Hambley: I think it would probably be rather undiplomatic for me to be pointing the finger at any particular country. Let me just note that when we look at the developing world, we are not looking at one unified body of countries. Different developing countries have different capacities, as Argentina has made very clear repeatedly in terms of defending its own decision to take on a target. You have some countries which are very large polluters that have low incomes. You have other countries which are large polluters which have relatively high incomes. Other developing countries are low polluters but have relatively high incomes. Other countries are low polluters and have low incomes; most of Africa falls into that last category. We would not believe it appropriate for an African country to be taking on a target, by any means. And we are talking about taking on targets that are not similar to the targets that we've taken on with a 1990 baseline reduction target. We are talking about a commitment which would perhaps be a growth target off a business-as-usual trajectory by one or two percent. [We are talking about] taking advantage of that reduction for various mitigation options, which [could in turn] be played into very co-beneficial, environmentally sound contributions to a country's own efforts to sustainably develop; give them cleaner air, give them a more efficient energy infrastructure.

We feel that as time goes on with our own bilateral discussions we have had around the world since Kyoto, that countries are coming to conclusions that by taking a more pro-active stance on this issue, that indeed they may find ways in which they can benefit from trading or from taking on some kind of a target commitment. Other countries are not going to be in a position now or in the future to do that, but even by, for example, participating in the Clean Development Mechanism could be seen as something which is meaningful participation in their overall effort.

Question: If the response you are waiting for from the developing countries doesn't come true, will the United States be prepared to ratify the Protocol? Or is it one of your pre-conditions?

Ambassador Hambley: The President has indicated that he will not submit this Protocol for ratification to the Senate until two conditions are satisfied. First is the cost aspect which we have discussed a little bit this afternoon. Second [is that he will not submit this Protocol for ratification] until we can ascertain to the Senate that there is meaningful participation by key developing countries.

Now, as to what that participation actually would involve, this is something which is a developing target as I indicated. As we go around the world, we see what other countries are doing. Some countries are indeed taking very notable steps domestically in terms of addressing greenhouse gases. I think over time we will be able to put that into a [inaudible] a package of being meaningful participation. Obviously we would like to see some countries taking on firm targets in the first budget period. This is something we are still aggressively pursuing and we will [continue to] pursue. But in the end, we will have to wait and see what, in the final analysis, finally develops.

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