Melinda Kimble, Head of Delegation/Acting Assistant Secretary of State, Bureau of Oceans and International Environmental and Scientific Affairs, Ambassador Mark Hambley, Special Negotiator for Climate Change, and Dirk Forrister, Chairman of the White House Task Force on Climate Change, U.S. Delegation to the UNFCCC Conference of the Parties-4 Press Briefing, Buenos Aires, Argentina, November 5, 1998


OPENING STATEMENT BY MS. KIMBLE:   Thank you, Susan.  I think today was
a very interesting day.  We started to see basically the rubber  meet
the road, so to speak.  The Contact Groups that worked through the day
yesterday started talking about decisions.  We have a draft decision
moving on things like sinks; we have a number of papers produced either
by individual delegations or groups now being floated for discussion,
that includes three papers or three collective papers on flexible
mechanisms, one from the Umbrella Group, one from the European Union
which covers a number of areas, and one from Mexico.  And I think what
is most striking is the commonality between these papers, particularly
the Umbrella Group and Mexico, and I think what we also see is striking
points of common ground even with the European Union -- and even though
the Flexible Mechanisms Working Group is not planning to meet again
until tomorrow, we are working in informal discussions across this whole
day on the ideas that were put forward in these various groups.  So, I
think that's encouraging and I might ask my colleagues Mark Hambley and
Dirk Forrister to make a few remarks.

AMB HAMBLEY:   Thank you very much, Melinda.  I think as Assistant
Secretary Kimble has indicated, what we are seeing I think is in fact
the glacial progress, I think what we are seeing some real legitimate
progress.  It's very slow, to be sure, there's no doubt that the tasks
ahead of the various Contact Groups are considerable.   But I think the
fact that large number of countries are engaged in trying to find
productive responses to these very complicated issues is indeed forward
movement and we look forward to continuing this process throughout this
week until I  guess our Monday or Tuesday deadline, whenever that is,
thank you.

MR. FORRISTER:   I thought I would offer just a couple of comments from
the White House perspective to give some of you a sense of what's going
on in the United States domestically and our action to combat global
warming, because there has been a very vigorous plan emerging in the
United States and for those of you that were a part of briefings that we
did last time in Kyoto, it's actually gotten bigger and better, and I
want to describe that for you just a little bit.


I think the first feature I want to point to is the President's Climate
Technology Initiative which when we briefed in Kyoto we were expecting
to be a $5 billion/five year plan.  In fact when we went before the
Congress earlier this year and proposed our budget, we proposed a $6.3
billion/ five year plan, and in the waning days of the Congress,
achieved a good chunk of the first year portion of that in a last minute
budget showdown with the Congress -- where we achieved an additional
$130 million in the accounts of investments in renewable energy and
other kinds of energy efficiency investments.

The key areas that those programmatic dollars are going to be going is
into a partnership for a new generation of vehicles, our hallmark
program with our automobile manufacturers aimed at tripling the fuel
efficiency of our vehicle fleet of new vehicles by the year 2002.  Also
we have a partnership for advanced technology in housing that is
advancing 50% more energy efficient homes over the next decade and 30%
more efficient retro-fits.   In addition to that, we have additional
funding going into what we call our Energy Star programs that promote
efficiency in an entire range of office products and home energy
products, and put a little seal on them to show that they are the most
energy efficient product with an energy star on them.  In addition to
that, we've got significantly more money in programs to propel wind,
photovoltaics, and other forms of renewable energy into our market
place.

The secondary progress that we have had underway has been in a set of
very productive industry consultations with key emitting sectors, this
is an effort to develop voluntary agreements to improve emissions for
key emitting sectors of our economy.  And I can't tell you that we have
reached agreement with any industries yet, but I can tell you that we
are in active dialogue with some of our most energy intensive sectors,
notably the electric power sector, our natural gas pipelines, our steel
sector, our aluminum sector, our cement sector, and our commercial
building sector.  So we have a great deal of activity under way in
industry consultations.

The other thing that we have done this year to advance our domestic
implementation is to propose electric utility restructuring legislation
in our country in a way that would achieve greenhouse gas benefits.
It's got a package of programs designed to achieve reductions in the
electric power sector on the order of 25 to 40 million metric tons.
Congress did not enact that legislation this Congress but it's something
we are hopeful for next year.

In addition to that, we are improving our own performance as an energy
user in the federal government by an aggressive program that will be
launched through a series of Executive Orders building on existing
legislative authority to improve the federal government's own energy
efficiency in its facilities.  This is all building on a strong
portfolio of programs that were developed -- aimed at our year 2000
goal.  We think that these are all going to deliver tremendous benefits
both locally and globally, but it's a very strong  package of initial
efforts to improve emissions.

The other thing that has been a tremendous change in the United States
that you can pick up information around the hall, as  beginnings of a
change in attitude in the business sector.  We've seen the formation of
several new initiatives between environmental organizations and our
private sector and we've seen the formation of the Pew Center on Climate
Change that has a very progressive set of companies joined on board
trying to pursue action.  You will see some of their exhibits out around
the hall today and I urge you to take the time to talk with some of them
and get a sense of the changing attitude in U.S. business.  On the U.S.
Climate Change Action Plan, I don't know how many of you have seen it
but there is a nice package put together with a lot more detail than I
am able to describe here, but I wanted you to have the sense that there
is a great deal of activity underway in the United States in improving
our greenhouse gas emissions efforts.
VOICE OF AMERICA:   We just heard the European Union's news conference
in which they were saying that they expect the United States to take
definite actions in cutting emissions before they would entertain
discussions about flexibility in emissions trading, and so forth.  Now
what Mr. Forrister you were just talking about is there is anything
specific in that you can offer in terms of how much the emissions would
be cut through these various programs you were talking about?

MR. FORRISTER:    I can't give you a firm figure.  I gave you some
figures in there about certain programs, but I guess I think the sky's
the limit in some sense with these voluntary compacts that industries
are sitting down and working through with us in terms of what they are
able to put on the table.  These discussions are aimed at looking
sectorially at what's going on over the next decade and looking at ways
that we can partner in terms of research and development programs or
federal procurement programs or potential tax incentives to bring about
an accelerated change in these key industrial sectors.  There are other
sectors that we hope to reach out to as well, but I really think that at
this point in time, there's an awful lot of opportunity for firms to put
tons on the table if you will but I haven't got quantified numbers yet,
because those discussions are not completed.

MS. KIMBLE:    I'd just like to add to that that it is very important to
understand Kyoto agreed to flexibility mechanisms, four of them, and one
of them is the European Union bubble.  So, I don't think whether or not
we use flexibility mechanisms is at issue here.  That was agreed last
year in Japan.

RADIO CANADA:  Talking about the European Union bubble, the Europeans
agreed that if you make your own bubble like with Canada and Mexico,
there's no problem under the Kyoto Protocol.  But they argue also that
the flexibility mechanisms must absolutely be open to everybody and they
would put a veto if a group of countries would try to have flexibility
mechanisms just for themselves.  So, what do you think about that?  Is
it possible to have flexibility mechanisms without the Europeans, if
they require caps on flexibility mechanisms and you don't agree?

MS. KIMBLE:   Well, somehow I feel like I'm back in Kyoto.  But anyhow,
the Europeans I think are mixing apples and oranges all the way around.
I mean first of all the Umbrella Group has issued a number of papers,
including a recent paper leading to decisions on flexibility mechanisms
that makes very clear where we want to go on the mechanisms and this
would be, of course, open to the European Union as long as they met the
requirements required of every state who is going to enter the trading
mechanism for monitoring, measurement, reporting and verification.  So
one of the things we wanted to ask the European Union is let's get the
monitoring, measurement, verification, reporting systems right before we
start talking about capping and compliance, because the way these
mechanisms are designed is to ensure that they work almost in a self-
enforcing way.  And, our commitment at this meeting is to start the
process of designing the system.

AMB HAMBLEY:   I would just add that the various papers which have been
submitted by the Umbrella Group of countries, those nine countries
including Japan, the United States, Australia, New Zealand, Norway,
Iceland, Ukraine and Russia, those papers have been offered in an effort
to try and find areas of convergence to try and get the dialogue going
in a positive way so that we can move forward from the decisions taken
at Kyoto.  And so I would hope that our European colleagues will receive
those papers in that spirit so that we can indeed achieve progress at
this meeting.

CLIMATE CHANGE NEWS AUSTRALIA: Madame, you mentioned I think in your
introduction a draft decision on sinks.  I just wonder if you could bear
it, to take us through the highlights of that draft decision.

MS. KIMBLE:    Well, this is primarily a process decision implementing
our agreement in the course of the Bonn meeting to set up a working
group to look at sinks both in Articles 3.3 and 3.4.  The draft decision
will refer to certain decisions that came out of the workshop that was
held in Rome and talk about where we go from here.  There will also be a
portion citing the work on Article 3.4 which will highlight the fact
that the United States has offered to host a workshop on the 3.4
mechanisms, and I think that probably captures it but Mark may have more
information.

AMB HAMBLEY:   I would just note that as we speak here, this Contact
Group is at the moment meeting to try and develop draft language.  It
will draw upon the intervention made by the European Union on this
particular topic, on an intervention made by the United States, by
Australia, New Zealand and other countries -- Norway -- which have an
interest in finding a good resolution to this problem.  But the
indications we have, as well as the G77/China has also introduced some
modifications to the Chairman's draft text, but I must say that in sum
that the indications we received from this Contact Group as of about 30
minutes ago was that they think they will come up with a decision which
will be forward looking.

QUESTION:   Developing countries' participation is a key issue for the
U.S.   Could you perhaps inform us on the progress in the informal
consultations over the Argentinean proposals and do you know which
countries have participated so far?   And is there any key developing
countries who have flatly refused to take part in such consultations?
Thank you.

MS. KIMBLE:   Well, since the United States is not in charge of the
consultations it is a little hard for me to get into the details of
them.  I know that Argentina has been talking to a number of countries
in the Latin Group and a number of other countries in the Group of 77,
and within Annex I I know that all the countries have indicated their
willingness to participate in whatever the Chair wishes to do on this
issue, and I understand the Chair has received some encouragement from
developing countries but I think this process is in its very, very
beginning stages.

INTERNATIONAL WILDLIFE MAGAZINE:   Mr. Forrister described a number of
ambitious programs in the United States to ultimately reduce carbon
dioxide emissions.  U.S. has the least efficient motor vehicle fleet in
the world and certainly among the least efficient power plant fleets in
the world, and thus ample room....In light of this, is the United States
willing to commit to any domestic reductions in greenhouse gases
including carbon dioxide at all, concrete limits, say one pound?

MR. FORRISTER:   We have committed to a 7% reduction in our basket of
gases, contingent on the availability of flexibility mechanisms and we
are not interested in setting specific limits.  We want to develop an
aggressive domestic program that allows firms the same flexibilities
that are available to everyone under the Protocol.  That would be our
intention.  The President has expressed his intent after moving through
the phase of getting voluntary commitments from businesses and through
tax incentives and other programmatic technology efforts, to move into a
domestic emissions trading program over time.  And that is our belief of
where this is going.  The President committed to that prior to Kyoto,
believes that's the right direction for us to go domestically, but we
want to take these other steps first -- build the system, get things on
a better trajectory before designing our domestic emissions trading
program.  But that's clearly where it's headed and that will involve
setting specific limits and specific sectors, and allowing tradeability
among them but also tradeability outside.

We just think that it is a fundamentally inefficient economic message to
send to the private sector to set any specific limits.  I think it's
been one of the beauties of our acid rain trading system that, Curtis, I
know you know well, that is delivering environmental reductions way
ahead of schedule and way below cost.  And it's because it leaves the
freedom of choice in the private sector to decide to how to go about
making reductions and how much they do in their own plant, and how much
they enter in joint investments or purchases from outside their systems.
We think that free market mechanism is the best way to go, and we're
going to stand by it.

INTERNATIONAL WILDLIFE MAGAZINE: So the answer is that the United States
is unwilling to commit to a domestic CO2 reduction?

MR. FORRISTER: I'll stand by my answer.

NHK JAPAN BROADCASTING:   How far or how narrow is the difference
between the U.S. and the EU in terms of capping issues of emissions
trading?  Could you explain where we are in terms of this problem?

MS. KIMBLE: Well I think the United States believes there should be no
concrete caps or quantitative caps on the trading mechanisms, on either
CDM, Joint Implementation, or international emissions trading, and the
European Union has said and while the European Union as a group has not
defined certain numbers, many individual European countries have
suggested figures like 50% and other figures like that, and much, much
lower figures for the Clean Development Mechanism.  And we clearly have
a lot of concerns about this, one because it limits the cost
effectiveness of the international emissions trading system, but two if
you really severely restrict the opportunities available under the Clean
Development Mechanism, the potential for transferring technology and new
investment into developing countries is severely limited.

AMB HAMBLEY:   I would just like to add that both the United States and
its partners in the European Union and its associated states have
recognized that we have this difference of view.  But we came here
frankly not to challenge each other on this particular point if at all
possible, and to focus on those areas of convergence where we find a
certain amount of commonality and try and make some progress in those
areas.

MS. KIMBLE: I would just add I think that we are very much convinced if
we build on where we agree, we will begin to see that it is less
necessary to get into specifics about how much you can trade because as
I said, you can design a system to be self-enforcing, self-regulating
and clearly you can have a system that will draw both domestic and
external reductions.

ORANGE COUNTY REGISTER: If you know, by what year does the
administration expect U.S. emissions to begin declining?

MR. FORRISTER: That is a hard question for me to answer in the midst of
the consultations we have underway with industry.  I think once those
conversations ripen over the next few months, and we get voluntary plans
in place, which I am optimistic that we will achieve that with many of
those sectors, although it is not a certainty that those sectors will
want to enter commitments, but we are active in the conversation.  Once
we have those, we will be able to tally them up and give you a better
sense, but it is still a little early for me to be able to do that.

USA RADIO: Two quick questions to take it back home, Mr. Forrister, like
you started out.  Can you kind of explain what the consultations are
like, that you are having with the U.S. industry.  I am married to a
small business owner in Texas and I know the last person in the world
that we want to talk to is the government.  And the second question,
quickly, you also said that you were trying to decrease, or make be more
efficient the federal government in decreasing emissions.  Can you
explain how that will affect our U.S. military?

MR. FORRISTER: I will go to the first part and then turn to you on the
military, maybe.  My efforts and consultations are actually, I think, a
very positive experience, although maybe you would want to test it with
some of the business people who are here.  But I seem like a nice enough
guy, I think, so, generally what we are doing actually is beginning with
sessions at a staff level with senior people from these sectors and
large companies in these sectors that have expertise in the
environmental area and we look together at where their emissions are
going and what the opportunities are for improving their emissions.  And
then, generally after we scope it out a little bit, we've been bringing
together Chief Executive Officers from those key companies into the
White House for meetings with senior White House officials and senior
agency officials from whatever agencies of expertise might be important
for a particular conversation.  Usually that involves our Environmental
Protection Agency and our Energy Department, and oftentimes our Commerce
Department or Agriculture Department, depending on the interest of the
sector.  And we are trying to get CEO vision set for these consultations
and buy in at the CEO level to work together in a partnership in this
effort..

But most of the activity, I have to say, is in the hands of the private
sector.  We offer whatever expertise we in government can bring to bear
in a particular -- understanding what is going on with a particular
sector.  But in the end we are looking for agreements that do four
fairly simple things.  And in those agreements we are looking for firms
to agree to take their own emissions inventory and measure their
emissions on an ongoing basis.  That is the first thing.  Secondly, that
they commit to undertake a bottom-up review of all the opportunities
available in their sector.  That thirdly they try to quantify a
commitment, what we are calling a stretch goal, of where they think they
could get if we in government partnered with them in removing barriers
to technology deployment.  And fourth, that as part of that setting of
that stretch goal, they actually commit to an action plan of what they
would be willing to do.

>From the government side we are offering several ways that we think we
could help in barrier removal, whether it's research and development
partnerships, or tax incentives or procurement incentives.  Probably the
most powerful thing that we are offering, that I think you'll hear a lot
of conversation in the halls or in private sessions here, is that we are
assuring credit for early action that is taken.  The President has
personally committed to this, as has the Vice President, and now we are
in conversations in these consultations, of specifically how we can do
that.  How we can ensure that firms that want to get ahead of the curve,
that are forward leaning, from whatever sector, have a system to begin
opening an early action account, an early banking account, and begin
depositing emission reductions that they achieve in the near term.  And
I think this is a very positive area of conversation with our
industries, large and small, and I have met with some small ones.  I've
even offered to meet with the National Federation of Independent
Business, our largest small business group, and a personal childhood
friend of mine is the head of that now.  But he hasn't said yes, yet.

MS. KIMBLE: Just to briefly answer your question on the military.  First
of all, the United States Department of Defense, including the services,
the operations, the installations of the Department of Defense, are the
largest federal consumer of energy.  But let me say this, since 1990 the
Department of Defense has raised its efficiency and conserved greenhouse
gas emissions at a very high rate.  Efficiency, energy efficiency is a
very high priority for the Department of Defense because they want to
maximize every defense dollar.  So the less they spend on energy, the
more efficient they are at using energy, the better they are at doing
other things in defense.

When we undertook the negotiation of the Kyoto Protocol, we were able to
work very closely with the Department of Defense on two concerns they
had, where {much} of their energy consumption continues to reside --
{international} bunker fuels (aviation fuel, and marine fuel).  Those
are {reported but do not count} under the Protocol. {The second concern
was emissions from multilateral military operations pursuant to the U.N.
Charter.  Those are also reported separately.}  Beyond that, to ensure
that there is no, no threat whatsoever, to operational readiness or
{training}, the President made a decision subsequently that {those
domestic activities would not be adversely affected.}

But, at the same time I want to stress very clearly that if you in
theory had a domestic cap and trade system, based on 1990 levels, and
you permitted the Department of Defense to trade, they would have some
of the largest reductions to sell in the United States. So I think the
way you look at it is, you know, very innovative.  I doubt that they
will let the Department of Defense trade their emission savings, but I
think we have to be very, very proud that the Department of Defense has
been such a leader in promoting energy efficiency, particularly since
they are a such a large consumer.
QUESTION:  Do you have any new information on when the President is
going to sign the Protocol?

MS. KIMBLE:  No  (laughter).


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