Stuart Eizenstat, Head of Delegation/Under Secretary of State, U.S. Delegation to the UNFCCC Conference of the Parties-4, Press Briefing, Buenos Aires, Argentina, November 14, 1998


OPENING STATEMENT BY MR. EIZENSTAT: In the Southern Hemisphere,
according to the Almanac, the longest day of 1998 is December 22.
I think it arrived about five weeks early. I am pleased to report
to you, though, that after days of almost round-the-clock
negotiations, the Fourth Conference of the Parties has achieved
real progress in turning the promise of Kyoto into a reality.

Our success here proves that the framework we built in Kyoto is
indeed sound. It has withstood its first test. We have reached
agreement on a solid plan of action to complete the unfinished
business of Kyoto. We have resolved to settle a number of the key
issues before us within two years' time.

Most significant, though, this Conference was marked by a clear
shift in the terms of the debate. Our talks here were infused by
a promising new spirit of engagement that is helping to bridge
the divide between developed and developing nations.

This was best exemplified by the historic pledge of our host
country, Argentina, to take on a binding emissions target, and
the announcement by Kazakhstan that it intends to do so as well.
These pledges reflect a growing recognition that climate change
is truly a global challenge that requires a global solution. They
have changed the map of future negotiations. And they challenge
the Parties gathered here to find new pathways, so that nations
wishing to assume their share of our common but differentiated
responsibilities, can chart their own sovereign course to lower
emissions.

On other issues as well, developing countries from Latin America
to Africa to small Pacific island states are stepping forward to
play a more constructive role in our collective endeavor,
recognizing - in the words of President Menem -- that the only
path to sustainable growth is clean growth.

For our part, the United States remains steadfast in its resolve.
We are taking strong action at home to reduce our greenhouse gas
emissions, forging new partnerships with industry and
dramatically increasing our investments in clean and efficient
technologies. We can - and will - do more.

Thursday, we signed the Kyoto Protocol, reaffirming our
commitment to work with other nations to achieve the ambitious
environmental goals we set in Kyoto. While signing does not
legally commit us to implement the Protocol, it strengthens our
ability to resolve issues left open in Kyoto, so that we can then
submit the Protocol for the approval of the U.S. Senate.

Our talks here were arduous. But looking back over the past year,
I would not have predicted that we would come so far in so short
a time. In Kyoto, only a handful of companies would even
acknowledge that the threat of climate change is real. A year
later, a growing number are becoming full partners in our efforts
and pledging real action to reduce emissions. And, for the first
time, the Parties themselves recognized the value of directly
involving the private sector  -- as, by the way, we urged at the
Tokyo ministerial -- in these proceedings. It is, after all, the
private sector that will have to marshal the resources and know-
how to meet our goals.

In Kyoto, emissions trading was a novel concept to most nations.
A year later, there is growing recognition that trading will help
us achieve maximum environmental gain for each dollar, peso, euro
or yen invested in greenhouse gas reduction.

In Kyoto, many developing countries resisted creation of the
Clean Development Mechanism. A year later, countries from Senegal
to China are expressing great interest in using this powerful
tool to help meet both their environmental and their economic
needs.

The action plan we adopted today will carry forward a new
momentum, a momentum we have seen here in Buenos Aires. In this
action plan, the Parties resolve to reach decisions by the end of
2000 on a number of key issues. These include:

-- elaborating rules and guidelines for Kyoto's market-based
mechanisms -- emissions trading, the Clean Development Mechanism,
and Joint Implementation;
-- encouraging the transfer of technology to help developing
nations along the path to clean, sustainable growth;
-- assisting countries adversely affected by climate change and
helping them to adapt to these consequences; and,
-- ensuring that the Kyoto architecture rests on a solid
foundation of compliance.

Importantly, the Parties, at our urging, also agreed that since
the issues have grown more numerous and complex, annual meetings
are no longer sufficient. In fact the fact that we stay up
through the night is one indication of that. Consequently, there
will be more frequent, high-level consultations to provide
political guidance to the subsidiary bodies that grapple with the
outstanding issues. This will allow us to maximize our progress
at future conferences.

Buenos Aires has not only sustained, but advanced the momentum of
Kyoto. Let there be no mistake: we confront a challenge many
years in the making. Serious hurdles remain before this treaty is
workable and complete. But the agreement we have forged here
today gives us a way to move forward, so that we can create and
mobilize the most effective means to our environmental ends.

Finally, I want to thank President Menem, Minister Alsogaray, and
the people of Argentina for hosting this conference. We will
always recall the "good air" of Buenos Aires as we continue our
work together to ensure that the planet we pass to our children
and grandchildren is healthy and hospitable.

I'll be glad to take either your questions, comments. Thank you.

RADIO CANADA: In your statement, you are talking about China
expressing great interest in using economic tools. China is still
very opposed to this process. How do can you reconcile this
thing?

MR. EIZENSTAT: Let me give you an example. A year ago when I was
at Kyoto, China was vigorously opposed to the Clean Development
Mechanism, which is one of the three market based mechanisms.
There was a suspicion on the part of  a number of developing
countries that this somehow was just a way of the developed world
buying its way out of a problem at the expense of the developing
world. That's dissipated completely. China and the representative
from China, said several times during our ministerial meetings
'we've got to get CDM, the Clean Development Mechanism, off the
ground fast.'  There is now wall to wall support for it. I found
ministers from Africa coming up to me and saying 'how do we get
some of these projects; how do we qualify; how do we get the
investment that will come into this.'  This, therefore, shows
again the power of the marketplace. They want this because they
see the benefits to it. But the fact is that because it provides
an incentive for both the industrial countries and the developing
world -- it's a win-win situation -- using market mechanisms to
reduce emissions more than otherwise would be the case. China
absolutely, several times, indicated how anxious they were to
support this process as quickly as possible.

QUESTION: In this action plan, the Convention's Article 4.2 (a)
and (b) was not included. Does it mean the fact that the United
States abandoned the inclusion of this article means that you
don't have anymore the way to bring China to a voluntary
commitment of the reduction....

MR. EIZENSTAT: That's a good question. This was a hotly debated
item and many of the developing countries represented by the G77
did not wish to have the types of commitments that 4.2 (a) and
(b) required. We strongly supported that as did the European
Union. It indicates to us that while a tremendous amount of
progress has been made by the developing world, as shown by the
Argentine decision to take on a commitment; by the Kazakhstan
decision;  by the fact that a number of countries have indicated
a willingness to try to find ways to more vigorously participate
by the consultations that occurred here; and by the fact that the
developing world for the first time was really engaged in this
consultation. Notwithstanding all of that, there still is a
concern about the implications of taking on binding commitments
by some of the developing countries. I think what one is going to
find is that that will dissipate. It will dissipate as the model
of Argentina spreads. It will dissipate as countries recognize
that by taking on obligations, they become eligible for the
market-based incentives like trading which are very valuable. It
will dissipate when they understand that the kind of meaningful
participation that we are talking about in many cases involves
not the kind of net reduction that we are taking in the
industrial world,  but rather simply what we call abatement or
growth targets, whereby their emissions can continue to grow but
at a less steep trajectory. Now a good example of the fact that,
as President Menem said, "sustainable growth is really clean
growth," is the fact that Argentina has grown 6% a year since
1990 but their emissions have grown only 1% a year. You can, in
fact, do both. I think that example, again, will spread.

VOICE OF MEDITERRANEAN RADIO: You referred to strong action at
home to reduce our greenhouse gas emissions on page 1. Does that
mean you have some divergence with the Business Roundtable who
faxed your delegation a few days ago urging that you should
insist on a system where everybody had obligatory emission
reductions so that the U.S. could buy its way out and achieve its
targets 80% to 90% by trading.

MR. EIZENSTAT: No country, including the United States, can buy
its way out of Kyoto obligations. It will require vigorous
domestic action and we have vigorous domestic action. Indeed that
vigorous action is accelerated. We got a billion dollars from the
Congress in the last few weeks, which was a 25% increase over the
amount allocated for the climate change area, and the whole range
of R&D in renewable areas. We are spending $270 million to
develop a car that will have three times the fuel efficiency by
early in the next decade, early to mid-decade, compared to the
current fleet. We are going to have homes that are 50% more
energy efficient. There will be a federal example set. We are
going to begin the process of new appliance standards on a
regulatory basis. It is a very broad-based initiative. At the
same time, it is important that there be unrestricted trading.
Once one tries to impose arbitrary restrictions on trading, the
costs go up, the support for climate change is reduced, and
indeed, the environmental benefits of trading are reduced. That
is to say that trading has a double benefit. It reduces cost but
it also reduces emissions, and the reason it does that is because
through the marketplace it encourages companies and countries to
reduce their emissions lower than they otherwise would reduce, so
they have additional allowances to sell.

QUESTION: Could you give us some information about the position
of the United States in regards with Brazil's proposal of taking
in account the accumulative emissions of the
countries....(inaudible)....taking in account the industrialized
period from the countries for calculating the responsibility in
emissions.

MR. EIZENSTAT: I am not familiar with their particular proposal.
Brazil was the leader in developing the Clean Development
Mechanism, and there has been, by a number of  the developing
countries -- perhaps this is what you are referring to -- some
concern about how the Clean Development Mechanism can get off the
ground early. Some have proposed that credit be given projects --
so-called AIJ projects -- at such time as the Clean Development
Mechanism went into force. There have been others who have talked
about per capita emissions -- perhaps that is what you refer to -
- which we strongly opposed.

One thing, by the way, that was a real gain for us is that it was
very important from our standpoint to have the three market
mechanisms moving along the same path in terms of the development
of rules and regulations and verification. That is that the Clean
Development Mechanism, joint implementation, and trading, all
have the same deadline of 2000. That is very important because
you want a compatibility between what is an eligible project, how
do you measure, what is verification, how do you trade, who gives
credit -- all of that ought to be made compatible. In addition,
it's important that the projects go together so that there are
continued incentives by all countries, including developing
countries, to continue to support all the market mechanisms and
not just some.

NHK JAPAN BROADCASTING: There have been some efforts being made
in terms of participation, getting more participation from
developing nations, and there has been some informal
consultation. How do you think this informal consultation will
develop in the future and how the U.S. will get involved in this
kind of effort?

MR. EIZENSTAT: There were informal consultations for the first
time by developing countries here, talking about finding, as
President Menem put it, a new way for developing countries to
participate. We think Argentina will act as a model for other
developing countries. It's got such an excellent history of
leadership in the developing world, and economic reform, and
joining the world economy and being a vibrant democracy, and de-
nuclearizing itself -- moving away from being a nuclear weapons
state to peaceful uses of nuclear weapons. All of these have set
good examples. So when Argentina does something like it did this
week, it will set a very important example.

Second, we have a very, very extensive program with almost 50
countries -- that's a one billion dollar, five-year program -- in
which we work with countries to help them develop emissions
profiles to measure their emissions, to encourage them to adopt
clean technologies, to move away from wasteful energy habits, to
adopt market pricing for energy. This gives us the capacity to
work closely with countries and given them the sense that by
taking on eventual targets -- this is not something that is going
to compromise their growth, quite the contrary, it's going assure
sustainable growth.

It's going to be a long process. It's a marathon, it's not a
sprint. This is not going to happen over night. The developing
world is not going to change over night in terms of some its
attitudes. But, what happened at Buenos Aires is really light
years beyond what one would have thought from Kyoto only a year
ago. If that kind of pace can continue and accelerate, then we
will really begin to see some major movement on the part of
developing countries. I have already had countries who have come
to me and indicated that they are interested in the Argentine
model.

Thank you very much.


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