Press Conference by the Delegation of the United States

What do we mean by a new post-2012 global climate change regime that is environmentally effective and economically sustainable?

First, emissions are global and the response, to be environmentally effective, will need to be global. It needs to include the United States and all the world’s largest producers of greenhouse gas emissions, developed and developing countries alike, while respecting national circumstances.

Second, the new regime must be economically sustainable and promote, not inhibit, the legitimate aspirations of nations and people everywhere for sustainable economic growth, energy security, and clean air. Energy is a key driver of economic growth and global energy demand is anticipated to rise by more than 50 percent by 2030, with most of that increase coming from the developing world as nations build infrastructure and improve the economic welfare of their citizens. We need to accelerate cost-effective development and adoption of advanced technologies that could fundamentally alter the way we produce and consume energy—such as carbon capture and storage, nuclear power, biofuels, and others—by providing incentives and by making large investments in technology. The United States and Japan lead the world in this effort and we need other countries to do the same.

The United States is working both at home and abroad on a range of initiatives to reduce greenhouse gas emissions, improve energy security and cut harmful air pollution. We have a diverse portfolio of domestic policy measures including dozens of mandatory, incentive-based, market-based, and voluntary programs to reduce our domestic emissions. We have invested some $37 billion to develop and deploy innovative technologies to reduce greenhouse gas emissions while allowing for economic growth.

We know this could be done. From 2000-2005, the population of the United States grew by some 5 percent or 14 million people, our Gross Domestic Product grew by 12 percent (about $1.2 trillion) while our greenhouse gas emissions increased by only 1.6 percent. Latest estimates show that from 2005-2006, our economy grew by 2.9 percent, but our greenhouse gas emissions actually decreased by 1.5 percent.

In May of this year, President Bush announced the U.S. would work with other major economies to establish a new framework on greenhouse gas emissions that would contribute to a global agreement under the United Nations Framework Convention on Climate Change. Since that announcement, the United States has been consulting with 16 other major economies, which together with the United States represent about 80 percent of the world’s economy, energy use, and greenhouse gas emissions. Secretary of State Rice hosted the first Major Economies Meeting in September in Washington, where leaders’ representatives heard firsthand from President Bush on his vision for moving forward. President Bush has proposed a meeting of the heads of state of the Major Economies next summer, which we hope will result in agreement that can make a major contribution to the negotiations that will be guided by a Bali Roadmap.

I also want to highlight three other issues — forestry, adaptation, and technology access — that are key issues to be discussed here in Bali.

Avoided deforestation is a priority for Indonesia and many other developing countries, and it will be a focus of discussions in Bali. The United States is an international leader in promoting forest conservation. For example, under our Tropical Forest Conservation Act, we have concluded with 12 countries debt-for-nature agreements that are generating $163 million to help conserve up to 20 million hectares of important tropical forests around the world. We are also combating illegal logging and the export of illegally harvested forest products in Africa, Asia, and Latin America through the President’s Initiative Against Illegal Logging, and through the Congo Basin Forest Partnership, we have contributed $68 million to better manage 80 million hectares — about the size of our state of Texas — in the world’s second largest tropical forest.

Adaptation is an increasing priority both at home and internationally, and we are promoting effective planning as part of broader development strategies. The United States is also leading efforts such as the Global Earth Observation System of Systems, which gives communities early warning of natural disasters, and improves decision-making for agriculture, coastal development and other economic sectors that are affected by climate variability and change.

And, to accelerate the uptake of clean energy technologies around the world, President Bush has proposed a new international clean technology fund. Secretary of the Treasury Paulson is working with international partners in developing a new approach for spurring investments in the global energy infrastructure that reduce greenhouse gas emissions.

In closing, let me reiterate that the United States intends to be flexible and work constructively with all Convention Parties to achieve consensus on a Bali Roadmap that will guide negotiations on a new post-2012 global climate change regime that is environmentally effective and economically sustainable and to the successful completion of those negotiations by the end of 2009.

Thank you for your attention. I will be happy to respond to any questions.

Question:  Dr. Watson, as you know this has been described as a pivotal meeting of the…under the Framework Convention and I think a basic question is this: After all these years, are there any circumstances under which the current administration would agree, any conceivable circumstances under which the current administration would agree to internationally finding a reduction of GHG emissions?

Senior Climate Negotiator Watson: Thank you for the question Charles. I want to tell you we are going be very open and flexible about what process is set up under the Bali Roadmap. We do not want to start off with anything here in the beginning of the process that is going to prejudge what ultimately may be concluded by 2009. We do not want to start out with the harder issues upfront. I thought Yvo de Boer, the Executive Secretary, had some very wise comments this morning, that determining the right order for the discussions is going to present a huge challenge, and suggested that we let form follow function and …first what can be done given the right tools. I think he had a very good quote, he talked about the legal form being, as a question to be answered at the end of a process not at the beginning. And in particular he said, “After all a marriage contract is a culmination of a love affair, not the topic of discussion on the first date.” So, to the extent this is analogous to a first date, we don’t want to sign the marriage contract yet.

Question: A couple of questions if I may please. The first is, Australia got a lot of applause today for saying they were going to ratify the Kyoto Protocol. Are you feeling the isolation, and do you feel that maybe it was wrong to, to reject the Kyoto Protocol in 2001? And also those figures you gave us just now about the GDP growth and so on, and the carbon emissions must…how is the United States doing on its own goal of cutting the carbon intensity goal by 18%? You must be way ahead of that, on that schedule.

Senior Climate Negotiator Watson: On the second, yes, we are ahead of that schedule. I’m sorry I do not have the exact numbers on that. We are very much on track to meeting or hopefully exceeding the President’s goal that he set in 2002. With regard to the first question, we certainly respect Australia’s decision. President Bush has made it very clear that it was up to each country to decide how to move forward. Of course, Australia has had a change of government. The new government has decided to move forward on Kyoto. However, we look forward to continuing to work with Australia. They are very important partners with us in a number of our technology initiatives. They are a very important player in the Major Economies process. We fully expect to maintain that strong relationship with the new government.

Question: At President Bush’s September meeting, he made it clear that for the U.S. to move forward post-2012 all major emitters would have to be involved, but so far, the cap-and-trade mechanism has been a bit of a brick wall because countries like China just unequivocally won’t accept a cap. So, I was wondering, if China were to agree to a carbon tax, would the U.S. potentially agree to a carbon tax as part of a harmonized approach to mitigating climate emissions?

Senior Climate Negotiator Watson: The United States has to decide on its own domestic process; exactly how it is going to move forward and, of course, those conversations are going on and there are pieces of legislation being actively considered by our legislature now. So, in our process, it’s going to be very driven by domestic concerns and quite frankly my own personal opinion on this, I don’t want to speak for Congress -- is that they are going to be focused on their view of what’s best for their constituents in the United States and what other countries might or might not do will not be a factor in that.

Question: One of the things I’d like to ask you is, considering that when we use fossil fuel we are basically utilizing carbon dioxide, putting back into circulation carbon dioxide that was in circ-- was in existence when the world was too hot for there to be life on earth, and considering that the IPCC report and various other reports have shown that indeed that is going to happen again. Do you not think that it’d be more appropriate to take a more drastic step now and live completely away from use of fossil fuel and that while you still have it available, there’s not going to any real, real action about moving away from it but we came here in the hopes that possibly we should be talking about a plan to phase out the use of fossil fuel all together.

Senior Climate Negotiator Watson: Thank you. If you look at the reality of the situation, all projections, whether by the International Energy Agency or others, certainly indicate that fossil fuels are probably going to be the engine of our energy system for decades to come-- probably well into this century. The issue is, of course, can we develop and deploy the technologies that are going to be able to allow fossil fuels to be used in an environmentally sustainable manner. Many efforts are going on around the world particularly in terms of the carbon capture and storage technologies and substitute alternative fuels for use in autos to reduce the use of petroleum. And so, we see the development and advancement of these technologies as a way that will allow us to use fossil fuels in a manner that is environmentally sustainable. Now that being said, we are also working very hard, in the United States of course as are others around the world in developing and deploying renewable technologies. We think these efforts can make very important contributions, as can the expansion of safe civilian nuclear power, which is a non-carbon dioxide emitting and non-fossil fuel using baseload electricity source. So we are working at developing, in partnership with other countries around the world, a whole slew of technologies. We know that at some point fossil fuels will run out and so we are working very hard on developing technologies that will allow that transition to occur in an economically sound manner.

Question:  I’ll ask a question for Harlan. How can voluntary national targets, emission-cutting targets guarantee action against climate change?

Senior Climate Negotiator Watson: We actually think they can be very effective. We in the United States rely on a variety of measures, voluntary of which is one approach. We also have mandatory programs which are binding at the national level. I guess I would turn that question a little bit on its head. How effective has the current regime been in reducing emissions? And perhaps the current regime that is supposedly legally binding is not doing the job. So what really counts, of course, are national actions. Countries around the world are using a variety of approaches -- binding domestically, voluntary, and incentive-based approaches -- and again, we think that developing these at the national level is the most effective way to proceed. Now, that does not foreclose that in an ultimate agreement that comes out, there may not be aspects that are binding -- that is something that we are going to be working through over the next couple of years provided we can get the negotiating process underway.

Question:  A couple of questions. First of all, a lot of the environmental groups are characterizing the United States as a road block in this Roadmap. What would be your response to that? And secondly, why is it, do you feel, that the United States is now the only major industrialized nation not to have ratified Kyoto? Do you think the rest of the world has gone mad, or do you think perhaps other nations may have a point?

Senior Climate Negotiator Harlan Watson: Let me take the second question first -- it is up to each country to do the analysis and to analyze for themselves if the target that they have accepted is doable. Obviously other countries have done that analysis and made that decision. The United States came to a separate conclusion. We respect the decisions that other countries made. And we would ask them to respect the decision that we have made. With regard to the first question, you heard what I said. We are not here to be a road block. We are committed to a successful conclusion here and we are going to work very constructively to make that happen.

Question:  You said you had to include developed and developing countries. Could you please elaborate on that? Are you pushing for mandatory cuts from developing countries?

Senior Climate Negotiator Watson: No, we realize that developing countries have to grow their economies in order to lift millions, hundreds of millions of people around the world out of poverty, and of course, provide the general economic growth that all countries require. We need economic growth to afford the very expensive technologies. We really need to revamp our entire global energy system. And that is going to require hundreds of billions of dollars -- trillions, over the coming years. And so in order to afford that, we are obviously going to have to have economic growth worldwide. We certainly respect all countries’ need to have economic growth, particularly in developing countries. That is going to require energy…obviously increased energy use, given that we are fossil fuel-based at this time and do not have alternative technologies yet in place. That is definitely going to mean that emissions are going to grow from developing countries in order to maintain their economic growth. We accept that. What we would like is to work with developing countries to help them to make that transition so at least they can bend over their emissions pathway. We fully expect that their emissions are going to increase over the coming years, but again, we hope to first slow down that growth and, as in the United States, hopefully stop it and then reverse. That is simply the path that the world is going to have to take.

Question:  I wanted to ask you two questions about Kyoto. You just implied that existing mandatory targets weren’t working. We heard earlier from the EU that they think they’re on track to meet their Kyoto targets from the UNFCCC yesterday, that they think that the Kyoto targets will be met overall. So can you expand a little bit more on why you think the current mandatory targets aren’t working. And secondly, you said the current Kyoto target for the US was something that wasn’t economically feasible to be met. How then do you expect to meet what will be more demanding deep cuts in the future?

Senior Climate Negotiator Watson: Well, with regard to the first question, you know the way the Kyoto system operates, of course. First of all if you look at the data -- and I think that the EU would agree that on absolute emissions they’re above their Kyoto target. But there are also provisions in the Kyoto Protocol that can offset emissions either through the Clean Development Mechanism, through Joint Implementation projects and through international emissions trading. I fully expect that the European Union will meet its targets through using all the Kyoto mechanisms which were agreed to. However, you still have global emissions growing and growing rapidly. And so, it’s within that context I’m saying the current regime is not doing the job.

With regard to the second question, it’s not going to be easy obviously, for countries to take on more stringent targets. Countries .…the Kyoto Parties that have obligations now … the developed countries . . . are having a great deal of difficulty in reducing emissions. In fact, there are only a few countries that actually have reduced emissions absolutely -- I think it’s only the UK, Germany and a few others -- and so, it is going to take heroic steps for many of them to meet their 2012 targets. Taking on even deeper cuts beyond that is even going to be a steeper hill to climb. But, once again it’s all going to come down to technology; how quickly can we get the world’s energy system transformed and get cleaner technologies out there…those on-the-shelf now, more energy efficiency technologies and then really transformational things like carbon capture and storage, etc., that I mentioned before.

Question:  Just going back to Australia’s ratification of Kyoto. Have you had a chance to talk to any of their officials and do you think this creates any problems for Australia’s chairing the Umbrella Group? Number two is, given the aim of this… agreement is to keep--try and keep the global temperature from rising above 2 to 2.5 degrees. Do think that you going to be able to help achieve that outcome?

Senior Climate Negotiator Watson: First of all, yes, in fact I sat through a five-hour plus meeting yesterday in the Umbrella Group and did talk to Australian officials that are here. It was very cordial. We all know each other very well, and as I said earlier we respect Australia’s decision and look forward to working with Australia in the Major Economies Process, the Asia-Pacific Partnership on Clean Development and Climate and many other activities we are involved in with Australia. We certainly haven’t received any indication on the part of Australia that they’re not going to do that. So anyway we are very pleased with that and also will be pleased to continue to participate in the Umbrella Group. It’s an interesting group of countries with many diverse opinions. And we welcome our participation in it.

I think on the issue of two degrees -- again, we’re talking about the end of a process -- is something the European Union has proposed. We are not going to come to an agreement here on any particular temperature scale, any particular temperature target or emission reduction target. Again I want to emphasize the purpose here is to establish a process which is going to lead to what we hope will be two intense years of negotiations and we’ll get to those issues down the road. They won’t be decided here, however.

Thank you.