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U.S. DELEGATION TO THE SIXTH SESSION OF THE CONFERENCE OF THE PARTIES TO THE U.N. FRAMEWORK CONVENTION ON CLIMATE CHANGE (THE HAGUE, THE NETHERLANDS)

FOR IMMEDIATE RELEASE
November 14, 2000

Press Briefing by Mr. David B. Sandalow, Assistant Secretary
of State for Oceans and International Environmental and
Scientific Affairs (OES)
and
Ambassador Mark G. Hambley,
U.S. Special Negotiator on Climate Change
and
David Gardiner, Executive Director of the White House
Climate Change Task Force

DAVID SANDALOW: Thank you. We are in the early days of this conference, but I believe that there are already some encouraging signs for the road ahead. I would identify three. First, the President of the conference, Minister Pronk, is demonstrating considerable skill and leadership. He handled yesterday's opening session admirably, and he is energetically meeting with groups. He met with the Umbrella Group earlier this afternoon and is handling with considerable skill the discussions that we have been involved in. Second, many countries have stated strongly their commitment to reaching a successful outcome here at COP-6. That is a goal of the United States, and other countries are stating very strongly that it is a goal of theirs as well. Finally, we understand that a large number of ministers are going to be here next week for a long period of time. That will be helpful in handling some of the difficult issues that will be presented at this conference. In our case, our minister, Under Secretary Frank Loy, will be here for at least six or seven days devoting a considerable amount of his personal time and attention-as he has over the course of his government service-to progress on this issue.

One of the topics that we have been discussing with other delegations here in The Hague is the role of carbon sinks in fighting climate change. I will say a few words about that topic, and then I will ask David Gardiner and Mark Hambley if they would like to add any points.

The United States strongly supports including carbon sinks in this agreement. Indeed, the Kyoto Protocol contains provisions that expressly recognize the role of carbon sinks in fighting climate change. The United States believes that forests and farmlands should play a central role in fighting global warming. They play a central role in the carbon cycle, and no program to address global warming can be complete without recognizing the role of forests and farmlands. It is for that reason-to protect the environment and to fight global warming-that we are seeking appropriate rules to address forests and farmlands here in The Hague. There is compelling scientific evidence that land use and forestry practices can play an important role in mitigating climate change. The IPCC's Second Assessment Report, which was completed in 1995, identified low to medium cost forest mitigation opportunities in boreal forests, temperate forests, and tropical forests. In addition, the IPCC [Intergovernmental Panel on Climate Change] conducted a special report on land use, land use change, and forestry which was completed this past April. That was the product of expert work by literally hundreds of reviewers and is based on peer review scientific literature. It reconfirmed the potential for increasing the removal of carbon dioxide from the atmosphere by improving forestry and final management practices. For those who are interested, we have copies of the executive summary of this report available in the back.

In the view of the United States, we cannot afford to ignore important tools in the fight against global warming. Forests and farmlands can play a critical role in our efforts to fight global warming, and the agreements taken here should promote that. We recognize that some parties have expressed concerns about the impact of proposals on the first budget period targets specifically. For that reason, the United States has said that we are prepared to accept a phase-in of these provisions during the first budget period. But the fight against climate change is a marathon, not a sprint. We need to put in place rules that will stand the test of time and will help us to fight global warming over the long term. The rules that we are advancing on forests and farmlands are designed to do exactly that, and we would be happy to answer questions about them.

AMBASSADOR MARK HAMBLEY: I would just like to comment briefly about some of the ongoing negotiations. I think there is certainly widespread engagement across the board in most of the key areas by now. On the mechanisms discussion I think there remains a difficulty in determining how that particular group will handle its business. We hope that will be worked out this evening. On compliance, they are having their first meeting at the moment; it started, I believe, at three o'clock, but I believe that issue will also be coming along in the way directed by President Pronk. On the other issues of technology transfer, capacity building, 4.8 and 4.9 and Article 3.14-the so-called "developing country package," I believe there is a good sense of movement. Some brackets have actually been removed in one of those discussions, and I believe that there is a spirit of cooperation that we hope will continue, especially since by the end of the week we will have texts which will have the options which Minister Pronk has suggested should be presented to ministers for their consideration.

QUESTION (De Volkskant): I could not follow your last sentence, which was quite essential in the whole speech, that the United States accepts that in the first budget period you want to spread what?

SANDALOW: Thank you. Let me first thank all of the Dutch people for their hospitality here. On your question-the United States has said that we would be prepared to accept a phase-in that would limit the amount of credits that industrialized countries would receive for sink activities during the first budget period. Today, in a technical contact group, a possible structure for such a phase-in was discussed. This gets quite technical, quite quickly. The paper is public and is at the back of the room. We would be happy to answer any questions about it. No specific numbers have been discussed at this point, but we have said clearly that we would be prepared to discuss a phase-in of this type. That is intended to address the concerns of some parties on this issue, and we hope that it will be helpful in reaching an agreement in The Hague.

QUESTION: Do you think Mr. Clinton will come here after Vietnam?

SANDALOW: I have no indication whatsoever that the President is considering traveling here. I would add two things, first on the President's travel schedule, the President is either now or soon will be en route to Asia, where is attending the APEC Summit, and then he is going to go Vietnam, which is quite an historic trip. Also, with respect to the President, I would add that President Clinton delivered an address on Saturday on the topic of global warming. It was broadcast on the Internet, it is up on the White House Internet web site, and I recommend it to anyone who has not had a chance to see it. I will ask my colleague, David Gardiner, who is from the White House Climate Change Task Force, to describe it briefly.

GARDINER: Two things-first of all, the address itself concentrated on three main points: The first was the release of an assessment of the impacts of climate change on the United States, our so-called "national assessment"-a scientific process that has been underway for a number of years and which is now concluded. Second, a call on the part of the President for a new approach to limit the emissions of carbon dioxide from our electric utility sector, which is the source of a little over a third of the United States' greenhouse gas emissions; and third, a reaffirmation of our commitment to the Kyoto Protocol and to achieving success here in The Hague. I think that the importance of this address was to reflect the tremendous importance that the President attaches to these negotiations and the issue of climate change, and he continues to speak out on this issue on a regular basis and to be committed to the success of the negotiations here in The Hague.

QUESTION: I have two questions on sinks, sir. On your paper here, can I conclude that you are actually proposing your phase-in for the first commitment period only on forest managements and that your idea would be that you would get full credits for the other additional activities?

SANDALOW: The answer to that is yes. The proposal is that the phase-in would apply forest management.

QUESTION: That looks clear to me-I just wanted to hear a confirmation. And the other thing is of course for the public absolutely incomprehensible: different formulas for percentage. I mean what is the stretch in a way of percentages that goes-of course, you are not going to that mention that in figures….Are we talking about say, a percentage of one and the other one would be four times higher? What is the stretch, in other words, of your proposal of in terms of percentages without mentioning what the base is?

SANDALOW: I applaud you for having the fortitude to actually read it and try to understand it. As you suggest, it is quite technical. At this point, we are not talking about any numbers. At this stage of the discussions, I think it is useful for parties to talk about a possible structure and then proceed from there to a discussion on numbers.

QUESTION: At this point in time, what is the reception that you have received within this technical country group you had this afternoon? You had a good impression of it? Has there been a lot of opposition? What is the reaction to this concrete proposal you've just set up in this paper?

SANDALOW: I was not there personally, but I discussed it with our official who was there, and she described it as good discussion. There was engagement on the issue, a lot of questions to make sure that other delegations understood it, and that's exactly what we would expect and hope for at this time.

QUESTION (Earth Times): What is the U.S. position with regard to the impact of the convention on OPEC countries and oil prices?

HAMBLEY: Indeed, this is a question which is in a convention Article and one of the reasons why we are discussing Articles 4.8, 4.9 and Articles 3.14. Among those issues is of course the question of compensation, which has been raised by the OPEC countries-a financial contribution which they believe should be studied with the potential to give them compensation around 2010 for what they perceive is being losses to income from the impacts of response measures by Annex I parties. The idea of financial compensation is certainly not an idea which the United States finds acceptable, nor do I feel that any Annex II parties (the developed country parties) find acceptable. There are a number of other areas which the Saudis and others have raised which address policy areas. They want to have certain policy changes. They want to have certain industries in the West-the nuclear industry, the oil producing industry-they want those perhaps, cast in a new light so as to affect the taxation on petroleum products in Western countries. Many of these issues, I think they are not acceptable on the basis that they are intrusive and they are not legitimate grounds for compensating countries. We do believe that this is an issue which should be addressed, and there may be areas where we can find some common ground. We believe some additional studies are needed as to the impacts, as being alleged by the OPEC countries, we believe that these studies actually indicate quite a different picture. I think there are many studies, including by the National Energy Agency in Paris, which indicate frankly that there will be a net increase in income and not a decreased income due to the shifting markets which take place by 2010. So this is an issue which is certainly being discussed fervently in the halls as we speak now. It is not one which will be resolved by the end of this conference, but it is one which we believe the issue is broader than simply the adverse impacts of measures by Annex II parties. We also think it is a question of the overall vulnerability aspects and adaptation aspects, which we believe do deserve more forthcoming attention by the Annex II parties.

DIETRICH SCHWEDER, RADIO FRANKFURT: We found when we got our paper at the entrance about the U.S. position on nuclear power saying that it is changing or maybe changing. Is that true?

SANDALOW: The United States is open to discussion on this issue. In the past, we have noted that there have been challenges associated with nuclear power. Those include: cost, public acceptance, non-proliferation issues, waste disposal issues, and safety. So we have stated that we are open to discussion on this issue. It is critical that all parties to this negotiation come forward and indicate flexibility from their historic positions. The United States, just in the space of this press conference, has indicated flexibility on two issues. One of them is the one you just asked about, Sir, and the other is the issue of a phase-in on sinks. In order to get a deal, it is essential that all parties come forward with flexibility.

JOHN DILLON, EARTH TIMES: Could you repeat the last part of that answer? Are you saying that the other side has to give in on sinks if you are going to give in on nuclear power? Is there a quid pro quo there?

SANDALOW: I was not making a statement with respect with any specific issue. I was making a general statement that in order for us to reach a deal here at The Hague, parties are going to have to show flexibility from their historic positions. That is a simple matter of logic. Parties have come to this conference hall with widely varying positions on a number of issues. If we are going to leave a deal, there needs to be flexibility. The United States is indicating flexibility and believes it is important that all parties in the negotiations do so in order to reach an agreement.

QUESTION: When you said yesterday about the nuclear issue that you were open to discussion, I thought there was nothing new in your position, but obviously I was wrong. Are you now saying that you are showing flexibility on this? Is that something new? Is there a shift in your position in saying that you are open to discussions?

SANDALOW: I am repeating what I said yesterday, which is that we are open to discussion and that all parties must show flexibility in order to reach an agreement.

[question inaudible]

SANDALOW: As I said, we are open to discussion on this issue.

NICK MARK, INSIDE EPA: There are some countries that are critical of some of the Chairman's timelines that they are setting, asking for negotiation texts or proposals, early tomorrow afternoon, for example. Do you foresee that as being a problem in getting the text whittled down before the major ministers get here next week?

HAMBLEY: This is a challenge, and many of those texts remain bracketed. They all remain rather long, with one or two exceptions. As we speak, there are certain new positions being taken by various parties, and there are new submissions which are being considered. In some cases, there is a discussion going on as to which particular outstanding text will be the text which will be the focus of discussion. But we know from Minister Pronk, he has indicated, sent very strong signals to the co-chairs of each of these various negotiating parties that he expects them to do what is necessary to ensure the texts are prepared in a way which can be useful for the ministers when they arrive on Sunday. Our commitment is to work very closely with Minister Pronk and other parties in order to reach that goal.

QUESTION: I am sorry to bog you down again, but are you showing flexibility on the nuclear issue? Were you quoting this as an example of your readiness on the part of the United States to be flexible?

SANDALOW: I am going to stand by the answer I gave. We are open to discussion on this issue. We have in the past noted the challenges associated with nuclear power. Those challenges include: cost, public acceptance, non-proliferation, safety, and waste disposal issues. If we are going to reach a deal here in The Hague, all parties must show flexibility on a range of issues.

QUESTION: Is the United States the only country in the world with experience in emissions trading? If not, which are the other countries? Is this being done internationally?

SANDALOW: There is a growing body of experience with emissions trading. The United States is not the only country in the world that has done this. I will say a few words, and then my colleague, David Gardiner, is also an expert on these topics and can add some thoughts.

Some of the most interesting programs underway right now are happening in the private sector. A number of multinational companies including BP Amoco and some others are engaging in pilot emissions trading among themselves and they are doing that worldwide among all of their facilities. There is a growing body of experience on this. In the United States, emissions trading has been an enormously successful tool for fighting pollution. Our experience under the acid rain provisions of our 1990 Clean Air Act is tremendously exciting. We have managed to reduce acid rain pollution faster and cheaper than anybody at the time predicted using emissions trading as a tool. It has tremendous potential under this agreement for helping promote innovation in the fight against global warming and reducing costs.

GARDINER: The only thing which I would add is again to the U.S. experience with acid rain program that the costs of controlling the pollution that causes acid rain have been one half of what they were expected to be, and the other key advantage that we have seen is that we have virtually one hundred percent compliance with the provisions of the Acid Rain Program and of course, our sense is, that these same advantages would apply in an international agreement in that it would produce a cost effective approach to achieving the Kyoto targets, and it would be a contributor, we believe, to improving compliance with the Protocol.

QUESTION: Most of the developing country delegations I have spoken to are very wary of emissions trading. Why is that if you are so much in favor of it?

SANDALOW: That specific question is better directed to them. I would not want to speak to what motivates them, but I will say this: In conversations with developing country delegates over the past year or two, we have seen growing enthusiasm for the Clean Development Mechanism, which is a form of emissions trading. I believe that there are tremendous opportunities to move forward with the Clean Development Mechanism that will help us reduce greenhouse gas emissions and fight poverty in the developing world.

QUESTION: Just to follow up on a question that was just answered-indeed, the acid rain program in the United States was a success, but when it comes now to the private enterprise dealings with Costa Rica and some other countries without the Kyoto Protocol having yet been ratified, my question is…could we say that this CDM done is under what, under a U.S. internal policy arrangement? It is definitely not under the Kyoto Protocol arrangement. What kind of umbrella do you put over these examples? These examples, basically speaking, do not stand, in my opinion, under anything.

SANDALOW: Let me answer and then see if Ambassador Hambley would like to add anything. We propose to move forward with negotiating rules for the Clean Development Mechanism in the context of the Kyoto Protocol, and the Clean Development Mechanism is part of that agreement. There have been pilot projects underway that are similar in some respects, and there is some growing experience under those pilot projects, but the Clean Development Mechanism is part of the Kyoto Protocol.

HAMBLEY: I would just add that we applaud the efforts by interested countries to experiment with this very important concept, and I think that several Central American countries have done so. There is also, of course, [inaudible] from the World Bank, in which several countries are participating as well. We think that these are all very good experimentations. We hope to learn from them as we move forward in this process, but of course, in terms of CDM which work out the rules and work out a way in which these projects, if indeed they can be identified as being projects which have environmental integrity which match up to the various criteria which are established under the Clean Development Mechanism-if they are consistent with that, then hopefully these projects might be worked into the system in later years.

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