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Vice President Al Gore Jr. about to address a plenary session at the Kyoto Conference, December 1997 (UN Photo/Frank Leather)

Kyoto Redux?
Obama's Challenges at Copenhagen Echo Clinton's at Kyoto

National Security Archive Electronic Briefing Book No. 303
Edited by Robert Wampler

Posted - December 18, 2009

For more information:
202/994-7000 or wampler@gwu.edu

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Washington, D.C., December 18, 2009 - The challenges facing President Obama in the Copenhagen climate negotiations this week directly parallel the domestic and diplomatic constraints that troubled the Clinton administration more than a decade ago in the Kyoto talks, according to internal U.S. government documents from 1997 obtained through the Freedom of Information Act and posted on the Web today by the National Security Archive.

A plenary session in the main hall of the Kyoto International Conference Center (UN Photo/Frank Leather)

The documents describe the internal Clinton administration discussions as split between those arguing for American leadership on climate change and those emphasizing the economic costs of aggressive reductions in greenhouse gas emissions.  The former group included State Department and Council on Economic Quality officials, while the Treasury Department led the skeptics and self-described “realists”--including President Obama’s current economic adviser, Lawrence Summers.  The same top White House aide, Todd Stern, led the negotiations both then and now.

Additional parallels evident in the Clinton-era documentation include the restraining effect of domestic politics (particularly the role of the U.S. Senate) and conflicts between U.S. positions and those of the European Union and, even more controversially, China, with its booming economy and growing emissions.

 


Kyoto Redux?
Obama's Challenges at Copenhagen Echo Clinton's at Kyoto

By Robert Wampler

In a recent op-ed posted on Yale Environment 360, long-time environmental activist Bill McKibben admitted to a troubling sense of déjà vu as he looked forward to the Copenhagen climate talks. As he notes, President Barack Obama and other world leaders had already announced before the talks convened that there would be no new major climate change treaty emerging from the conference, with the delay laid by many at the door of the U.S. Senate and the uncertainty surrounding how it would view any new commitment to reduce greenhouse gas (GHG) emissions. (Note 1) Todd Stern, President Obama’s special envoy to the climate negotiations, must also be feeling that this is where he came in over a decade ago, as he headed up the Clinton administration’s negotiations on the Kyoto climate change agreement. To provide some historical perspective on these common themes, the National Security Archive is posting today a collection of documents that offer a window into the internal deliberations of the Clinton administration in 1997 as it debated the U.S. proposal for a new climate treaty.

Host-nation Prime Minister Ryutaro Hashimoto before addressing a plenary session at the Kyoto Conference (UN Photo/Frank Leather)

Turn the calendar back 12 years, and a very familiar constellation of challenges and conundrums was facing the Clinton administration as it worked to hammer out a U.S. proposal to guide negotiations on a new climate treaty to be signed at Kyoto in November 1997. The documents posted below provide two key and often divergent perspectives on the policy decision-making process, one from the State Department and the other from Treasury. The parallels between 1997 and 2009 are striking, particularly in the manner that domestic and diplomatic constraints have created obstacles to a climate treaty that embodies serious quantitative commitments to reducing GHG emissions and stem the tide of global warming. As these documents reveal, while the State Department, represented in many of the discussions by Under Secretary of State for Global Affairs Timothy Wirth, pushed for a more aggressive U.S. stance on the need to commit to serious emissions cuts and so assume leadership in this area, Treasury saw itself as a voice of reason within the administration, working to bring a much-needed dose of reality to what its officials saw as overly-optimistic assumptions about such key issues as the economic costs or the ability of technology to reduce costs. Abroad, the U.S. found itself increasingly isolated in its call for the less developed nations, especially China and India, to commit to firm targets along with the developed world, a call that was motivated in part by political pressure from the Hill, where the Byrd-Hagel Resolution had drawn a line in the sand regarding the need for firm developing country commitments and proof any U.S. commitments would not have serious economic impacts. The U.S. was also facing criticism for the delays in announcing the emission cuts it was willing to accept as part of a new treaty, while the European Union called for cuts the U.S. believed were unrealistic.

In another parallel to today, as the Kyoto meeting grew closer, the Clinton administration was forced to accept that the high hopes originally held for a major new climate change agreement incorporating serious emissions reductions for both the developed and the developing world could not be secured in the face of the multiple domestic and international constraints, and so efforts began to chart a new course for post-Kyoto discussions that would focus on the contentious issue of developing country commitments. As the last document discusses, China was seen as a possible model for dealing with this issue, involving ideas about promoting investment in cleaner power technology and a greater role for international financial institutions and public/private cooperation in promoting the spread of this technology throughout the developing world. The Kyoto Protocol, which established emission reduction targets for the developed world, was formally adopted on December 11, 1997. Vice President Albert Gore signed the agreement for the United States on November 12, 1998, but the agreement was never submitted to the Senate for ratification, lacking as it did targets for the developing world. Political developments would deprive Vice President Gore of the opportunity to pursue these and other initiatives when he lost the 2000 election, and the Bush administration adopted a much more restrained and critical approach to climate change.

Today, at home Obama faces the political challenge of selling a new climate treaty in the face of familiar contending critiques about the pace, much less the reality of global warming (despite the overwhelming scientific evidence) as well as the potential economic costs of committing to deep cuts in U.S. GHG emissions, often couched in terms of calls on the developing world to shoulder their share of the reductions. The role to be played by developing nations in any new climate regime has also proved to be a serious challenge, as reports out of Copenhagen tell of walkouts by the poorer nations in protest over perceived inadequate commitments of financial assistance from the developed world to help meet new emissions targets, and a potential showdown between the U.S. and China over the latter’s refusal to accept any agreement that involves inspections to confirm Beijing (and India) do meet their reduction targets. At the very least, President Obama and his fellow heads of state face formidable challenges this week in Copenhagen in trying to salvage an agreement that at least charts out a new course towards serious reductions in GHG emissions.

 


Documents

Document 1: Memorandum Undersecretary of Treasury for International Affairs Jeffrey R. Shafer to Deputy Secretary Lawrence Summers, January 21, 1997, Subject: NEC Meeting on Climate Change

This document reports on a National Economic Council meeting the previous week in which Shafer sat in for Summers. Shafer’s overall judgment is that “the meeting revealed very little consensus and not much success to date in thinking through carefully the issues involved in negotiating a new convention, which nonetheless seems to be on a fast track.” Shafer also notes that many, though not all, the participants seemed to grasp the risks involved in setting overly ambitious emissions reduction targets.  Shafer stresses to the group that such targets would have “very large economic costs” as well as be difficult to achieve, thus disappointing the environmental community. Going forward, Shafer recommends that Treasury focus on two problems: finding a politically acceptable way of building greater flexibility into any targets so as to balance emissions reductions and economic costs; and becoming more engaged in the process of accessing the costs of the various options. Certain political sensitivities also had to be accepted: taxes are a “non-starter” Summing up, Shafer feels that there seemed to be “a good deal of dreaminess about the possibility of accomplishing a lot at a low cost with new, warm and fuzzy technologies (such as windmills and solar power). Treasury will need to be realists.”

Document 2: Memorandum, Deputy Assistant Secretary of the Treasury for Policy Analysis Jonathan Gruber to Treasury Secretary Robert Rubin and Deputy Secretary Summers, July 28, 1997, Subject: Economic Policy Weekly Report, with attached cover note

By mid-year, the U.S. position on a new climate change agreement was tackling a basket of issues that would bedevil efforts at a new agreement. As foreshadowed in the first document, Treasury continues to focus on vetting the economic feasibility of the options being explored. As this document notes, Treasury was critiquing an OMB/DOE document on technology being prepared for an upcoming NEC Principals meeting, which Treasury felt took an “overly sanguine” view of the possibility that technological advances could solve climate problems. Treasury was also working with EPA on a report to accurately assess the lessons of prior cap and trade systems and explore the feasibility of auctioning off permits. Finally, Treasury was working with OASIA on approaches for incorporating developing countries into any climate change agreement, an issue which would only grow in importance if not intractability. The cover note by Treasury Secretary Rubin notes these are an “interesting set of issues.”

Document 3: Memorandum, Gruber to Rubin and Summers, August 5, 1997, Subject: Economic Policy Weekly Report

The notes struck by the previous document continue to be hit in this memorandum, as Gruber again notes that Treasury is engaged in climate change policy talks “on several fronts.” Now the work by the Department of Energy and the Office of Management and Budget on the benefits of technology subsidies to reduce the costs of climate change controls are termed “excessively optimistic.” Meanwhile, Treasury continues to work with the EPA on assessments of cap and trade systems and a possible auction system, with the Council of Economic Advisors on an evaluation of the “appropriate” role of developing countries in an international emissions control regime.

Document 4: Memorandum, Gruber to Rubin and Summers, September 2, 1997, Subject: Economic Policy Weekly Report

This memorandum focuses on Treasury’s involvement in work on a number of Presidential initiatives, starting with climate change, which is moving towards a presidential decision in October on a possible new U.S. commitment, following a series of cabinet-level discussions. Treasury is clearly continuing to carve out a cautionary role in these deliberations, as the memorandum indicates the department is preparing a separate paper laying out its view of the likely role of technology in helping to meet any emissions targets the U.S. might commit to, and on the proper role of government in helping to foster new technology development. On this latter topic, Treasury’s views “differ sharply from those of others in the Administration.”

Document 5: Cable, Subject: Climate Change Negotiations: Key Issues Facing US in the Run-Up to the Kyoto Conference, September 5, 1997

This lengthy cable, which apparently was drafted by the office of Undersecretary of State for Global Affairs Timothy Wirth, provides a detailed summary of the state of play regarding the negotiations for a new climate change treaty, initiated under the Berlin Mandate of April 1995 and being conducted under the auspices of the Framework Convention on Climate Change (FCCC), with negotiations scheduled to conclude at the Kyoto meeting in December. As the cable stresses, there are a number of challenges facing the Clinton administration in securing broader acceptance, both internationally and domestically, of its “still-evolving” positions. As the cable discusses in some detail, the key challenges revolved around the issue of establishing targets for reducing emissions, which was the primary objective of the new negotiations set in train by the Berlin Mandate. At home, the issue was defined by the Senate’s Byrd-Hagel Resolution of the previous July, which made legally binding emissions targets for developing countries and a commitment that no agreement would harm the U.S. economy prerequisites for Senate approval of any new climate treaty. As the cable discusses at some length, there were serious splits among the developed nations as well as between them and the developing world – especially the so-called “Large Developing Countries” of China, India and Brazil -  over the emissions targets and the timetable for reaching them, with the U.S. coming in for particular criticism for the delays in producing its emissions targets. For its part, the Clinton White House found the targets announced by the European Union – a 15% reductions in greenhouse gases below 1990 levels by 2010 - as anything but reasonable, while still raising expectations to an unrealistic level and making it difficult for the EU to make compromises on this issue that may be necessary to reach agreement at Kyoto. Summing up the U.S. position, the cable states that the U.S. continues “to insist that framing a ‘structure’ for an eventual agreement is more important . . . than identifying a specific ‘number’ at the present time, “ while the “EU’s insistence that ‘numbers come first’ . . . has delayed further progress in closing the gaps between our two sides on other outstanding issues.”

Document 6: Memorandum, Timothy Wirth and Undersecretary of Commerce for International Trade Stuart Eizenstat to Secretary of State Madeleine Albright, September 5, 1997; Subject: Climate change: An emerging policy on developing country participation

As noted in the previous document, the issue of establishing targets for reducing the greenhouse emissions by developing countries emerged as a contentious and divisive issue in the negotiations leading to Kyoto. This memorandum informs Secretary of State Albright that in a meeting chaired by Gene Sperling, director of the National Economic Council, at the White House, agreement had been reached on “how to more fully engage developing countries in the climate change negotiations,” based on a proposal Wirth and Eizenstat had presented. This new consensus represented agreement within the White House, including Todd Stern, Clinton’s Staff Secretary and senior negotiator for the Kyoto talks (and now Obama’s special envoy to the climate talks), representatives from the Council on Environmental Quality, National Security Council, Council of Economic Advisors and Office of Management and Budget, and Treasury, as well as State. The meeting decided that largely because of the Byrd-Hagel resolution, the existing U.S. proposal was inadequate on the issue of developing country participation, but it would be impossible to abandon the existing U.S. proposal and secure adoption of new U.S. ideas for more explicit development country commitments in time for agreement at Kyoto. So, the group agreed to pursue a two-step approach: 1) First, provide the other nations an elaboration and expansion of the present U.S. developing country proposals that gives specifics on the commitments the U.S. expects these countries to make. Expecting these ideas will be rejected and not included in the negotiating text to be presented at the end of September, the U.S. would then “gracefully” insert the same proposals in the form of a new negotiating mandate to be adopted in Kyoto, and so not open the U.S. up to the charge it was “blowing up” Kyoto. To satisfy the Senate, the Clinton administration would explicitly link U.S. ratification of any Kyoto agreement to the successful conclusion of the follow-on negotiations on developing country commitments.

While the meeting did produce this consensus, Sperling also warns Albright that the discussions exposed differences of view regarding the U.S. targets and timetable. Deputy Treasury Secretary Summers continued to support a “long-term and cautious approach,” suggesting that no target all would be the preferred option, while Janet Yellen, chair of the CEA was similarly negative, suggesting that even a return to 1990 emission levels by 2040 would be an “aggressive” level of action. On the other hand, Kathleen McGinty, chair of the CEQ, held that reducing emissions to 1990 levels by 2010 would be acceptable internationally and anything less would be hard to sell. Despite these differences, all were agreed that doing nothing was not an option, given the repeated public commitments President Clinton had made on this issue.

Document 7: Memorandum, Gruber to Rubin and Summers, September 9, 1997, Subject: Economic Policy Weekly Report

Another in the series of Gruber memoranda reporting on work on presidential initiatives, this one again underscores the efforts of the Treasury Department to counter what it sees as over optimistic assumptions in the development of a new U.S. position on a climate change treaty. As Gruber relates, Treasury is working with the Climate Change Steering Group to prepare a memo for Clinton on scenarios for U.S. climate change policy, with a key goal (at least in Treasury’s eyes) of highlighting that “more aggressive approaches (e.g., 1990 emission levels by 2010) are predicted to accomplish little more environmentally than less aggressive approaches (e.g., 1990 by 2040), but impose vastly greater economic costs.” Treasury is also continuing its work on studies to examine “skeptically” the role of technology in climate change policy, as well as the potential need for an “escape clause” from a domestic emissions trading system if prices rise too high.

Document 8: Memorandum for the President from Gene Sperling, Katie McGinty and Daniel Tarullo [Assistant to the President for International Economic Affairs], September 15, 1997, Subject: Climate Change Scenarios

This memorandum, referred to in the previous document and as indicated, the first of several to come over the next month, lays out in detail for President Clinton the contending sets of “constituent constraints” that confront the U.S. in drafting a climate change policy:

1) An environmental community that is pressing for an aggressive position on reducing greenhouse emissions.
2) International negotiations that have focused on fairly aggressive approaches, meaning a less aggressive U.S. approach would have adverse diplomatic consequences.
3) Economic analyses that recognize the severity of the problem but hold that a more gradual approach can secure similar goals at much lower cost; and
4) Domestic political pressure from major corporations and labor unions to reject a large energy tax increase and aggressive approaches as too costly, as well as to insist on significant developing country commitments to reducing global greenhouse emissions.

The challenge facing the Clinton White House is that while the first two constraints are somewhat consistent, as are the second two, the first set is at odds with the second set. “An aggressive approach would play well internationally and with environmental groups, but would be sharply criticized by corporations, labor unions, and the Hill. A more gradual approach, however, would garner some support from domestic interests but would be met with derision abroad and by environmental constituents.”

The diplomatic front presented its own special problems, as the memorandum noted that Clinton’s advisors strongly objected on substantive grounds to proposals floated by the European Union – “not all international pressures are necessarily consistent with ‘good policy’.” Clinton’s advisors found three serious problems with the EU approach: its failure to call on developing countries to accept any of the burden of reducing emissions, thus undermining the environmental benefits of any efforts in this area; its call for cutting emissions 15% below 1990 levels by 2010 is “dangerously front-loaded and predicated on naïve and misleading assumptions;” and the credibility problem resulting from these two approaches, a problem that could reduce the changes of getting a good international agreement over the medium-term.

For Clinton’s advisors, the developing country issue underscores the “vast gulf” between the diplomatic dialogue, where U.S. proposals on this issue have been judged too aggressive, and the domestic dialogue, where Senator Byrd’s resolution calling for even tougher targets for developing countries than found in prior U.S. proposals passed the Senate 95-0. To meet this dilemma, Clinton’s advisors recommend a “much tougher line” on developing countries, though this may require a two-step approach to the diplomatic negotiations, under which agreement among the developed countries would be reached first, but governments would not submit the agreement for domestic ratification until key developing countries had committed to binding targets.

To help Clinton better grasp the basic issues prior to making a final decision, the memorandum lays out three illustrative scenarios to frame the decision-making process leading up to the Kyoto talks in December and beyond. A number of key issues run through all these scenarios, including how to implement a carbon emissions reduction plan at home; what can be reasonably expected from technology advances without a significant price signal to guide investment in these technologies; the role of developing economies in reducing global emissions; and how the environmental effects differ from policy actions within the range under consideration. The three scenarios discussed are

1) Adopt the most attractive policies now acceptable internationally and fight for their domestic ratification
2) Craft more economically efficient domestic policies, even if these are not accepted internationally;
3) Try to bridge the gap between 1 and 2.

Sperling and his colleagues stress that these scenarios are illustrative. and that the economic figures presented in each are “highly uncertain,” reflecting “educated guesses based on economic models.” Furthermore, the precise outcomes will turn on how the four sets of constraints play out.

Document 9: Climate Change – Points for Briefing of the President, ca September 17, 1997

This document distills the main points of the longer memorandum presented to President Clinton, discussed above. The key points center on the costing of the options, global actions taken, and developing countries. With respect to costs, the talking points stress that it is easy to lose sight of the ultimate goal – stabilization of atmospheric concentrations of greenhouse gases (GHG) – if one focuses on costs. The assumptions behind the three scenarios outlined for President Clinton is that all of them will result in a stabilization of GHG at 555 parts per million (ppm), or about twice the pre-industrial level. The scenarios do not assess the impact on the probability of reaching this goal of how reductions are phased in. However, opting for a low-cost or late action option does increase the risks that other actors would fail to take the steps needed to reduce their GHG emissions, thus increasing the danger that the world would overshoot the target concentration levels with resulting higher risks. Finally, with regard to costs, while actions can be costed to some degree, it is harder to quantify the costs of inaction.

With respect to global action, the memo acknowledges that as the largest producer of GHG emission, “credible U.S. action” is crucial to securing the stabilization target. Doing this in turn will require retrofitting of some, or all, current capacity to reduce emissions, shifting to less dirty carbon fuels, decreased use of hydrocarbons, and eventually, broad replacement of hydrocarbons in the global economy.  But U.S. action alone will not suffice, given the projected rise of China as the largest emitter of GHG in the early 21st century, and more broadly, the increased contributions by developing countries to GHG emissions. This means agreement must be reached soon on quantifiable emissions targets for developing nations, moving beyond the voluntary actions called for by the Berlin Mandate. To address this issue, U.S. negotiators had been working to secure “maximum” action by developing countries by drafting mechanisms that would lead to more concerted action by the largest developing countries – China, India and Brazil – and those at more advanced stages of development, including Korea, Mexico, Indonesia and Chile, among others. But time was pressing for the U.S. to clarify its position on this issue, unless it risk being charged with undermining the talks at a late stage.

All of these issues are inter-related and affected the prospects for eventual success. Any new climate treaty would require U.S. ratification to be viable, and for this, there must be a mechanism for securing developing country commitments at the earliest possible stage. This gives great urgency to the U.S. making it clear what it requires for a successful new treaty, with an eye to a two-stage approach in which developed country commitments are nailed down at Kyoto as well as a mandate to negotiate firm targets for the developing countries as soon as possible.

Document 10: Memorandum, Gruber to Rubin and Summers, September 17, 1997; Subject: Economic Policy Weekly Report

This document provides the Treasury gloss on the memorandum sent to Clinton discussing the three scenarios for new climate change agreements. As Gruber describes it, the memorandum “illustrated the tradeoff between more and less aggressive approaches, highlighting that more aggressive approaches (1990 by 2010) result in essentially no different effect on the climate than less aggressive approaches (1990 by 2040), but that they cost at least three times as much.” In his marginal comments, Rubin tells Gruber that “Your work has been most helpful – if nothing else, in creating some sense of realism.”

Document 11: Memorandum, Climate Change: Possible U.S. Approach Towards Developing Countries, September 18, 1997

This memorandum with talking points outlines the proposed new two-step approach to dealing with the problem of developing country GHG emissions at Kyoto and beyond. Rehearsing the now familiar projections of growing developing country emissions to the point where they will account for more than 50% of the world’s emissions by 2035, and China outpacing the U.S. within 15 years, the paper states that it is now “imperative” that the next step include actions by both developed and developing countries to curb GHG emissions significantly. To this end, the memorandum argues that the Kyoto outcome must reflect a two step approach: first, in line with the Berlin Mandate, developed countries should agree first on the level of their commitments; and second, at the same time, it is critical that the parties to the talks focus on “binding, quantitative” commitments for developing countries, especially those that contribute a significant percentage of global emissions or whose rapid economic development gives them the capacity to assist in reducing the concentration of GHG in the future. This latter step would be a “Kyoto Mandate” that the U.S. will argue can be done without slowing GDP growth in developing countries.

Document 12: Memorandum, The Kyoto Meeting: A Scenario for Redefining Success, ca. September 24, 1997

As this document indicates, by late September the Clinton administration is facing the prospect that a new climate agreement would not be secured by the time of the Kyoto meeting in December, or at least one that would include all of the administration’s preferred provisions. The key stumbling block is the opposition of the EU, Japan and, likely most importantly, the developing countries to many of the provisions the U.S. believed essential to the long-term success of any new climate change agreement. Possible scenarios ranged from a “train wreck” in which not agreement was reached, new talks are postponed, and the U.S. bears the brunt of the blame because of its developing country provisions, to the now-unlikely prospect of all-out success in securing a treaty that incorporates all of the administration’s provisions. Given the likely scenarios all fall well short of success, a new scenario and a new definition of success were needed. To this end, the memorandum outlines a new scenario with four key components: restatement of the importance of the issues and the underlying science, with a renewed focus on the goal – long term stabilization of GHG concentrations; a strong statement of the steps the U.S. proposes to take domestically, including announcement of America’s realistic and achievable emission targets and calls for similarly realistic targets by other developed nations; a call for continued talks, including a process to review and modify the targets announced by developed nations and to involve developing countries; and a renewed stress on technology development, and public/private partnerships to create the means to secure global reductions. For success, the Clinton administration must announce this new approach by mid-October as well as devise and carry out a diplomatic strategy to secure broad international support before the Kyoto meeting.

After discussing of the main points in each of these key components, the memorandum ends with an assessment of likely responses to such a proposal. The EU would likely oppose any such proposal for a variety of reasons, including it delays agreement until after Kyoto, does not include a robust enough U.S. emissions target, and pushes the developing countries too hard. The Japanese response will turn on how the proposal affects “success” at the Kyoto meeting. If the U.S. can persuade them it will not derail Kyoto, Tokyo may be supportive. The U.S. can also capitalize on the internal disagreement in Japan over Kyoto, where the environment ministry and MITI have divergent views on how to proceed. Countries that are not prepared to take on commitments at Kyoto will likely welcome the U.S. proposal, but also take advantage of the opportunity to publicly chastise the U.S. while privately agreeing with much of its approach.

Document 13: Memorandum, Gruber to Rubin and Summers, September 30, 1997, Subject: Economic Policy Weekly Report

Yet another memorandum testifying to the critical stance taken by the Treasury Department in the Clinton administration’s efforts to hammer out a new climate change policy. As Gruber reports, work was nearly complete on a memorandum to President Clinton from Rubin and Summers “raising concerns about aggressive targets and timetables, the role of technology in reducing emissions, grandfathering-type permit allocation mechanisms, and command-and-control approaches to emissions reductions.” On a separate track, Treasury was working with the NEC to include its concerns in a memorandum from Gene Sperling to the president.

Document 14: Memorandum, Wirth and Eizenstat to Secretary of State Albright, October 2, 1997, Subject: State of Play on Climate Change

In this memorandum, Wirth and Eizenstat inform Secretary Albright that the administration is moving “rapidly” towards a consensus on a number of items, most significantly a decision on U.S. emission targets and timeline. The issue of GHG emission targets remains the focus of attention at home and abroad. The White House is now considering three options: returning to 1990 levels by 2010; announcing no specific target but instead a loosely defined reduction several decades from now; and reducing emissions to 1990 levels by 2020. Wirth and Eizenstat find the first option to be the “minimally credible” one, and believe support in the White House is growing for this approach. While this approach will still be open to criticism as falling far short of either the EU or Japanese proposed cuts, the two advisors believe that a commitment to reduce to 1990 levels by 2010 was “the absolute minimum necessary” to retain U.S. leadership and to be able to press other nations to accept the other components of the U.S. position regarding emissions trading, joint implementation and developing country participation.

On another front, the policies the administration is advocating in the negotiations are also designed to meet the significant concern voiced by Clinton’s economic advisors about the potential costs of any effort to cap emissions, costs they fear could become severe. Also, an interagency team is also looking into the idea of an “escape clause” that would cap the cost of carbon at a set price, thus providing a means to ensure the domestic cost of attaining an emissions target remains reasonable.

Turning to the developing country problem, both Clinton and Vice President Al Gore had endorsed State’s two-step approach (described in earlier documents), which State believes is the best way to deal with the Byrd-Hagel resolution. How the U.S. approaches the developing countries to pursue this option must be carefully crafted, to avoid the danger of isolating the U.S. in the international talks.

Summing up, Wirth and Eizenstat advise Albright that State’s preferred approach, in line with Albright’s goal of reasserting U.S. leadership in the climate change talks, is to press for a return to 1990 levels by 2010, with an appropriate “escape clause.” This, they stress again, is the minimum credible target.

Document 15: Memorandum, Gruber to Rubin and Summers, October 7, 1997, Subject: Economic Policy Weekly Report [with cover note with marginal comments by Rubin]

As this edition of Gruber’s weekly report notes, a climate change options memorandum from the National Economic Council was submitted to President Clinton on October 5th, and now Treasury and other agencies are awaiting his guidance on the issue. In this memorandum, Treasury and the other economic agencies pushed for a least-cost gradual approach to reducing emissions, while the NEC and CEQ supported a more aggressive approach, incorporating the “safety valve” to limit costs. Treasury has expressed its concerns that such a safety valve might be lost in the process, leaving the U.S. only with “more aggressive, and costly, emissions limits.” In the margins, Rubin noted “You may well be right.”

Document 16: Memorandum, Assistant Secretary of the Treasury for Economic Policy David Wilcox to Deputy Secretary Summers, November 6, 1997, Subject: Run-up to Kyoto: Latest Developments

This memorandum brings Summers up to date on developments in the Clinton administration’s preparations for Kyoto. The first item is an interagency meeting hosted by Wirth and USAID Administrator J. Brian Atwood on possible additional U.S. initiatives for Kyoto. Wilcox reports there was significant enthusiasm for a power sector investment initiative focusing on China, with the goal of getting the Chinese to commit formally to doing what they already say they intend to do in the power-plant area, in the form of a performance standard for new power-plant investment. The idea would be to build on the Chinese commitment as the basis for accelerated international financial institution (IFI) and bilateral assistance and a model for other countries.

Beyond this, China could also play an important role in any post-Kyoto discussions. By this point, Wirth has reportedly concluded there is no prospect for a Kyoto agreement along the lines first envisioned. Instead, Wirth now hopes to leave the meeting with a “Kyoto Mandate” under which negotiations will be extended for a set period, seeking to build on existing least developed country (LDC) obligations to establish standards for power sector investment that also would be the basis for expanded IFI and bilateral assistance, the area in which China could possibly provide the model. Vice-President Gore’s National Security Advisor Leon Fuerth had also voiced similar ideas, pointing to a recently agreed U.S./China energy and environment initiative as the foundation for deeper bilateral cooperation on environmentally sound power sector development. To this end, Fuerth had argued the time may have come to encourage the IFIs to boost lending for energy efficiency in China. On the basis of such thinking, a general consensus developed that the existing climate change interagency working group should explore the idea of shaping a Kyoto Mandate around China. If China’s power sector practices could be held up as a LDC standard, perhaps China could be persuaded to opt into the GHG targets, and so bring other major LDCs along with it.

 


Notes

1. "As the World Waits on the U.S., A Sense of Déjà vu in Denmark?" By Bill McKibben, Yale Environment 360, November 30, 2009, available at http://www.e360.yale.edu/content/feature.msp?id=2215.

 

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