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Frank E. Loy, Under Secretary of State for Global Affairs and Head of the U.S. Delegation; Mr. David B. Sandalow, Assistant Secretary of State for Oceans and International Environmental and Scientific Affairs (OES); and Ambassador Mark Hambley, U.S. Special Negotiator 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, November 4, 1999

Under Secretary Loy: Thank you and welcome. Our goal here in Bonn when we arrived was to achieve steady progress toward completing the work that was begun by our nations two years ago in Kyoto.

We were trying to build a truly global, cost-effective agreement that protects future generations from the risks of global climate change. In our view, this Conference has met that goal. We have made significant progress across the full spectrum of substantive issues from emissions trading, to sinks, to compliance -- significant progress. We have seen continued forward momentum on the issue of developing country efforts and, perhaps most critically, we have been able to redouble our efforts between now and next year's conference in The Hague. In short, we have charted a course for the critical year ahead and together have demonstrated the kind of political will necessary to resolve the major issues before us.

The Kyoto Protocol provided a blueprint for global efforts, and we leave Bonn with a mandate to negotiate a text that will refine these elements and weave them into an environmentally sound agreement.

One of the things that we are happy about is that among the substantive issues that were recognized and that were advanced is the issue of cost-effectiveness. Because as we have said, we think it has to be squarely addressed. Moreover, I would say that for the first time in these meetings, I believe, the broad outlines of an effective international emissions trading system began to take real shape. There is an agreement on what the essential elements must be: a strong system for monitoring and reporting emissions; a common unit for emission trades; an airtight global accounting system; full private sector participation; and perhaps most critically, a strong and effective system to ensure compliance. Those are elements of a trading system which were only vaguely recognized a while ago and they are now much more in place.

Over the coming year we have to move toward a full agreement on the shape of each of these components. We have to reject efforts to put artificial caps on them. We can only mobilize the financial capital, the ingenuity, and the entrepreneurial drive that we think is necessary to meet these ambitious targets all countries have taken on by putting the power of the marketplace to work for the environment.

That is not a philosophical point. This is not a point made by somebody who is in love with market mechanisms for their own sake. This is, in our opinion, the practical solution to a huge, huge problem.

One of the things we saw in Bonn was progress on the developing country efforts. We applaud Argentina's leadership in becoming the first developing country to announce a binding emissions target. We think Argentina's action reflects a genuine commitment to participate meaningfully in the international effort to meet this huge global challenge. It illustrates how a developing country can fashion a target that benefits the environment while contributing to its own sustainable development.

We applaud as well, Kazakhstan's formal request for inclusion in Annex I. We call on the Conference to accept that.

More broadly than that, we were very encouraged by signs throughout the Conference that other developing countries are taking real measures to address global climate change. There were many, very impressive presentations that illustrated that. The United States asked for a dialogue to build on the successes the developing countries had, and to explore at a high-level the full range of market-oriented strategies that can create sustainable development opportunities for countries that are trying to reduce their emissions.

When we talked to developing countries we noted that they were very interested in the Clean Development Mechanism because they could see how it would work to their benefit, and how it would work at the same time to the benefit of the climate. We think we ought to try to find ways in which all the mechanisms contemplated by Kyoto can be used in that fashion and we intend to explore that. We are at the beginning of that exploration but we hope there is payoff there.

The last thing that we accomplished was procedural but critical. The Parties agreed to more than double the time devoted to negotiations and related activities between now and The Hague. We are going to hold two intersessional meetings over the next year, one in June, one in October, as well as a series of workshops. In addition, the Parties have invested the President of the Conference of Parties with the authority to take all necessary steps to intensify the negotiating process. All of that seems to us to be important and the intensity of the effort in the next year is a mark of the fact that this whole Conference believes it is important.

Between now and COP-6 we intend to intensify our own efforts at home to meet the challenge of global warming. We are going to continue to work with other countries to address the issues of cost-effectiveness and to achieve meaningful participation by key developing countries. These are not new ideas but I think they were given a boost at this Conference and we are going to continue to address them.

None of that, I am afraid, is the high drama of Kyoto. It makes it very hard for you, the working press; I apologize for that. Your job is different from our job. But you know, when you think about this, what we are engaged in is a big job -- to turn an idea, and in a sense Kyoto was just an idea with some numbers attached to it, into a workable program -- one I think everyone in this room realizes is enormously complex. We set ourselves a two-year period at Buenos Aires, we are half-way there. I would say that first year has produced a lot. We think we are on the right track toward finishing the important work that was begun in Kyoto and that was boosted in Buenos Aires, but we have to keep going. I am reminded by one of my colleagues here that today, November 4, is the birthday of the American humorist Will Rodgers. He once said, and I think this is somewhat apropos, that "even if you're on the right track, you'll get run over if you just sit there." The world cannot "just sit there" as the planet warms. We have to keep moving. I think the story of Bonn in November 1999, is that we met, we addressed the problems we had to, we got substantive agreement on text, we got the political will to negotiate further text, we got the political will to have an intensified process to COP-6, and we got increased interest from developing countries to become part of it in some fashion and to show how much developing countries are participating today in the reduction of greenhouse gases. That is very encouraging and gives us great hope that we are on our way to a successful COP-6.

Question: Clare Nullis, Associated Press: Do you think any of the progress you say was achieved here will help ease the objections in Congress to Kyoto?

Under Secretary Loy: One of the things about the American Congress, and that's different, I think, today from two years ago, is that there is very widespread agreement that the science tells us that global climate change is a real problem and that we have to do something about it. There is clearly a difference of views as to what we ought to do about it, as you well know, but I believe that as we get closer to an agreement, we will gain support from all parts of America -- if it has the elements that we have talked about, if it has the elements of a cost-effective agreement. It is going to be hard to sell an agreement that does not address that well. As long as it is global in scope in some sense -- we have defined that as meaningful participation by developing and, of course, developed countries -- as long as it is global in scope, as is the problem, I think we made progress in both of those directions. Therefore the answer to your question is yes, I think it will make a difference.

Question: Le Figaro: Mr. Loy, you said that there has been some progress on the sinks issue. Can you be more specific on this?

Ambassador Hambley: I believe we have made progress on sinks. We have outlined a period of time during which the data which has been requested will be submitted. The Parties are requested to submit certain amounts of data regarding the sinks issue. Also, the process to reach a framework for decision has been addressed in that decision. I think that is very positive. There will be a workshop after the IPCC report comes out, but I think the debate allowed governments to express their points of view, to present their proposals in ways which created a better air of understanding, and now we will be able to move forward on this issue with a greater sense of productivity in the coming months.

Question: Agence France-Presse: I was wondering if it is true that the Ministers first thought of publishing a statement but that you didn't manage to do that so finally you reversed to having conclusions from the President which are reflected in Decision #1.

Under Secretary Loy: There was a clear feeling that we shouldn't assemble in Bonn as we have without there being some product that reflects our discussions and our labors. Various people suggested various forms - ministerial declarations, and minutes, and communiques, and statements of the Chair. The conclusion was that it would be a statement of the Chair. The Chair read an oral version of that this morning. I am sure that everybody might have wanted to edit it a little bit but I think people felt pretty good about that and therefore I think people were quite satisfied with it in general.

Ambassador Hambley: In addition, the proposal submitted by the President for a decision by the Conference on the implementation of the Buenos Aires Plan of Action also will be a contribution to our efforts. This particular decision which was somewhat controversial was eventually adopted by consensus. It is something which reinforced some of the positive elements which grew out of this meeting, the elements of a growing sense among the world community that [global climate change] is a problem which must be addressed, and the sense that it must be addressed in a way in which Parties must intensify their efforts to solve those problems. The decision will give further impetus to the President and to others to create the kind of intersessional activity which we need in order to reach conclusions.

Question: Albert Pilgram, Dutch Radio & Television: You mentioned yesterday some dispute between the United States and Europe about the compliance issue. You thought the European Union had a few points that were too vague. Is that issue still underway at this moment so that you can report more compliance in the European Union toward the United States?

Ambassador Hambley: Actually, the compliance discussions have been one area which has produced a remarkable degree of unanimity amongst the Parties, both from the European Union and the United States and most of its Umbrella partners, as well as several members of the G-77/China. From the beginning, the progress we saw last week -- the enriched debate which occurred on these issues -- allowed that group to come forward with a very good recommendation on future work for the Joint Working Group on Compliance. We are convinced that although we do have some differences in certain areas, those differences will be worked out over the coming months. We are also convinced that we will be able to follow the overall objective of that recommendation which is to reach a decision on the compliance issues by COP-6.

Question: Deutsche Welle Radio: I have just been reading some of the papers that were being handed out in the lobby. There was a paper of Concerned Scientists which said that one of the good things is that there has been initiative of various countries to move ahead, if need be, without the United States. What does that mean for you, if several countries decide to ratify the Protocol, regardless of whether the U.S. will ratify or not.

Under Secretary Loy: Ratification is a subject every country has to take up itself. We very much want to be part of Kyoto. We very much want to get an agreement we can ratify -- that is what we are here for. We want greenhouse gas emissions reduced. Anything that helps is, in our opinion, a plus. We hope that we would be able to shape an agreement that we could be part of and we have some optimism about that. One of the reasons that there may be some speculation to that effect is that some people have questioned whether we will ratify an agreement. Of course, that is impossible to say with definitiveness. My sense is that -- if we get the kind of agreement we have described from this podium before -- we will. We should be able to do that. Therefore, it is worth trying to achieve that agreement. We are, I am afraid, a big emitter. We are a major economic force. We are trying very hard to participate in an agreement that many countries [agreed to] in Kyoto to reduce greenhouse gas emissions. We would like to play a part in that. We hope to play a part in that. I think we expect to play a part in that.

Question: Carmen Valero from EFE: Can you tell us when the negotiating text will be available?

Ambassador Hambley: The text on mechanisms is available but not in its final form. It is a synthesis document prepared by Chairman Chow Kok Kee, Chairman of the Contact Group in his former capacity as Chairman of the Subsidiary Body for Scientific and Technological Advice. That text was reviewed last week, the first reading. It will now be revised as a result of those readings. In addition, Parties have, I believe, until January 31, 2000, to make additional submissions on technical aspects of that particular text. That will then be the text which will be brought forward to be looked at in more detailed fashion at subsidiary body meetings this coming June. I think there will be other texts as well which will be coming out. The Compliance text is going to be developed by the co-chairs of that group, working upon elements which have been provided by the European Union, the G-77/China, the United States and Japan, and based on that they will get a text to work with at the subsidiary body meetings in June.

Question: Norwegian Daily Newspaper: Can you imagine a situation where the Kyoto Protocol enters into force without the United States' ratification?

Under Secretary Loy: The requirements for entering into force are 55 countries that reflect 55% of carbon dioxide emissions from Annex I countries based on 1990 levels. So it is possible. I think in the real world of politics it would be more difficult than it would be in the theoretical world of mathematics.

Thank you.

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