MR. STERN: Hello everybody. Thank you all for coming.
I actually just arrived in this very lovely city a little while ago. I’m pleased to be here, pleased to have a chance to appear before you, and pleased to be part of the U.S. delegation, which I think is an extraordinarily strong one. I know Lisa Jackson did an event today which I heard was very well received, as it should have been. I actually flew in with Secretary Ken Salazar of the Department of the Interior, Secretary Tom Vilsak from the Department of Agriculture. We have a very strong team, and more coming.
But the bottom line is the United States is committed to getting the strongest possible agreement we can over the next two weeks. We are under no illusion that this is going to be easy. I think it is going to be challenging. But I think an agreement is there to be had if we do this right and we need to keep at all times very much in sight of our – keep in our view the end goal that has brought us here. We have – the President has demonstrated a strong commitment to this issue from day one. He came into office focused first and foremost on the economic stimulus package, to get the economy going, but in that package he embedded $80 billion of green investments and incentives – a huge amount for the United States. You can compare that against an average of about three of four at the most billion dollars in R&D in an ordinary year.
We put in place through the EPA the highest vehicle standards – strongest vehicle standards – we ever had back in March. The EPA has acted again just in the – well – in the last few days, in the last month, to move to start being in place to regulate stationary sources of CO2 like power plants and the like, and we have a comprehensive energy and climate bill legislation that has moved through the House and is pending in the Senate now. And that we’re pushing hard.
But the United States commitment is strong. We have – as I’m sure you’re all aware – articulated a U.S. target within the last couple weeks of 17% below 2005 levels by 2020. And that ramps up – that’s part of an overall legislative package that goes out to 2050. Just to give you an example, by 2025 the reduction would be about 30% below 2005, and 42% by 2030. And if you compare that to 1990 levels - because there are some who favor that baseline – in 2025 we’d be 18% below 1990, in 2030 we’d be 33% below 1990, so it’s an aggressive package that the President has put down. We also – we are also supporting – the kind of fast start funding that was part of the commonwealth declaration about a month – uh, a week or so ago, a week or two weeks ago, that would ramp up to $10 billion collectively of developed country contributions by 2012 and move on up from there. Also, as you know, President Obama is going to be attending the conference here, coming on the – at the end of it.
Obviously, action by the United States or action by the entire developed country group is not nearly enough. We need – and it is going to be a core part of this negotiation – to have significant action by the major developing countries. The – there is no question that we have – the United States has – the largest historical emissions of greenhouse gases, and we have said this all up and down the administration from the beginning of this year.
But it is also true that virtually all the growth in emissions going forward – nearly all of it – is going to come from developing countries. The IEA estimates 97% is going to come from developing countries between now and 2030. Fifty percent of it – fifty percent – from China alone over the next twenty years, of the growth in emissions. So there’s simply no way if you care about the science – and we do – there is no way to solve this problem by giving the major developing countries a pass. We are not talking about the same kind of need for action from the vast majority of developing countries, but from the major ones, it’s going to be absolutely essential. It is essential that they step forward and set forth the actions that they are prepared to take, make clear that they stand behind those actions and make the implementation of those actions transparent in the way that we see in many arenas all over the world, whether it’s the WTO, the IMF, the Financial Action Task Force – any number of other bodies, where developed and developing countries participate.
So, look, let me stop there and take your questions. Again, the object here and our commitment here is to try to get the best deal we can, the best agreement we can to set the world on a path to sustainable development. So, let me stop there.
QUESTION: Could there be circumstances under which you would agree to an agreement based on the Kyoto Protocol? Could you outline any circumstances under which this might happen?
MR. STERN: We are certainly not going to become part of the Kyoto Protocol. We are not going to become part of the Kyoto Protocol, so that’s not on the table and I think that there are – you know, it depends what you mean exactly by an agreement - if you mean basically taking the Kyoto Protocol and putting a new title on it, we’re not going to do that either. But you might – there may be provisions, there might be elements of the Kyoto Protocol that in effect are similar to what’s being discussed in the context of the so-called LCA track. So I wouldn’t rule that out, but we’re not going to Kyoto, and we’re not going to do something that’s Kyoto with another name.
QUESTION: By way of following up on that a little bit. There are key mechanisms and concepts enshrined in the Kyoto Protocol that have always been presumed to be the kind of thing that could be expanded and made more ambitious as a way to make an efficient, global agreement. Trading of some kind. So when you say what you just said, are you saying that it’s possible there still could be some mechanism of that sort?
MR. STERN: Sure. Yes. I mean, I think there are certainly elements of Kyoto – like you said, trading, offsets and things like that that at least in some form would be part of an ongoing agreement.
QUESTION: China has said pretty straightforwardly they are ready to act if we pay for it essentially. You said it’s absolutely imperative that they act, but what about the money part? Is the U.S. and other major developed countries setting down a sort of marker also for what they expect in terms of what they will help finance, versus what they’ll have to do on their own?
MR. STERN: Well, as I said, we think that the kind of initial, first several years funding proposal that’s part of the Commonwealth Declaration makes sense. We think that that would be aimed, fundamentally, at the poor countries, the poorest countries. Probably focused very much on adaptation, some on forestry, as well. I don’t envision public funds - certainly not from the United States – going to China. I mean I don’t think – there is inevitably a limited amount of money. The amount ought to be as high as it possibly can be, but it’s necessarily going to be limited. That’s just life, and the real world. So we would intend to direct our public dollars to the neediest countries, and China – to its great credit – has a dynamic economy, and sits on some two trillion dollars in reserves. So we don’t think China would be the first candidate for public funding.
QUESTION: Can you describe to me the context in which you are negotiating – the domestic context – and in particular the recent decision by the Court of Appeals for the Second Circuit which said that the courts can essentially step in and impose caps on carbon emissions for a couple of reasons. One, it’s not something that’s reserved to Congress, secondly because the field of regulation is not currently occupied. If you have this prospect of judicial intervention to impose caps as a matter of tort, is that something you feel is a pressure?
MR. STERN: Look, I am aware generally of the decision. I haven’t read the decision. I think inevitably – I think it’s interesting to be sure – I think inevitably this is an issue that is going to be settled legislatively. Of course, regulation has a role as well, and regulation would implement anything that’s done legislatively. And it’s a backstop even beyond that. But our and the President’s absolute commitment and preference is to push forward with the kind of comprehensive energy and climate legislation that has made its way through the House and is pending in the Senate now. That’s the way this thing – this issue – ought to get handled, not by, you know, 100 judges in different parts of the country, half of them making one decision and half of them making another decision on something that is of this nature.
QUESTION: Yesterday, Jonathan in an off-the-record briefing - Jonathan Pershing – said that he thought a political deal in some ways was more advantageous than a legally-binding treaty because it could start immediately, with the steps you took. With that in mind, if that’s the course that you follow in the negotiations, do you have any sort of timeline or goal for actually arriving at a legally-binding treaty?
MR. STERN: Let me say first of all that our objective from the beginning of this year was a legal treaty. That’s what our submission back in April envisioned and that’s what we were seeking. I think sometime in the last – I don’t know – couple of months, the Danish Prime Minister I think reached a – or had a view of this which I think is quite on target, looking at the nature of the formal negotiations, that it was looking less and less likely that that was going to happen. Not that it was a preference that it not happen, but just that realities were such that it was not so likely to happen and that we had to focus therefore on getting a strong result here in Copenhagen and to make a strong first step in the direction that we are all trying to take. And we’re very supportive of that. It’s not that we came in not trying to get a treaty, we came in looking for a treaty, but that, as things have developed, that was not in the cards.
I do think that there is with respect to the kind of politically-binding agreement that the Danish Prime Minister Rasmussen has been talking about – there is an advantage that an agreement can take effect right away, and I think that’s probably what Jonathan was referring to, and I think that is a plus, it’s not – you wouldn’t throw the treaty aside in order to do that, if the treaty was available – the treaty’s not available right now. In terms of going forward we certainly would intend to – the last thing we would want is for the political -politically-binding agreement that we’re talking about to substitute for the effort to get a legal agreement, so we certainly are supportive of the notion that efforts to negotiate a full legal agreement should go on, full speed ahead. I can’t tell you exactly what the deadline ought to be, but it ought to be soon.
QUESTION: A lot of the developing countries are insisting that the U.S., Japan, the Europeans commit money already in Copenhagen individually. Do you think, taking into consideration that – given the consideration that your economy is in a pretty bad state - do you think your government is able to commit any money here? And just a quick, on China – China has been saying that your emissions are still growing, they China – grew 16% from 1990 to 2005, and will keep on growing, and that your offer is not sufficient.
MR. STERN: Well, with respect to your first question on money, yeah, I think that the United States will be prepared to be part of an overall solution that involves - that involves - a financial contribution, and that’s what I was referring to with respect to the $10 billion, which is also part of the statement that the President – that the White House put out in announcing the President’s decision to come on December 18th. That’s a number in the twenty – 10 to 2012 timeframe and we would have – whether it individual, individually-articulated contributions or it’s a developed country contribution where everybody’s fair share kind of gets sorted out - I think it may well be the latter, but either which way, it’s real money from the United States, from Europe, from Japan, from everybody else. So I think that that will be part of the equation here, I would expect that. With respect to our emissions, it’s true that our emissions have gone up since 1990, and the President’s program, the President’s announcements, his activity all the way through this year, and the legislation that’s pending, and the 17% ramping up in the way that I described is exactly intended to address that. Let me say, the country whose emissions are going up dramatically – really dramatically – is China. And that’s the reason that we can’t have agreement that doesn’t have a real commitment by China. Right now China is the biggest emitter in the world. By 2020 it’s going to be 60% larger than the United States, by 2030, it’s going to be 80% larger than the United States. It’s going to be something like – it’s 20% of the world total now and something like 28% of the world total by 2020. You can’t even think about controlling this problem without having significant action by China. You know, our emissions are pretty much flattening out right now and then they are going to go down. China – and I’m not being critical - China has an extraordinarily successful economy and it’s in a different stage of development than we are. But emissions are emissions, you just got to do the math. This isn’t a matter of politics or morality or anything else, it’s just math. And you cannot get to the kind of reductions that we need globally if China is not a major player, it’s just the reality.
QUESTION: Just to refer to developing countries and mainly the major developing countries, many of them have come up with some kind of target or commitment for the future - energy intensity compared with GDP or some sort of commitment. Are you saying that these commitments are not enough for, let’s say China for example, or India or some of these commitments are enough? And one other thing, the European Union negotiators - just before mentioned that the developing countries in the G77 group is not allowing complete negotiation on mitigation by developed countries at the LCA level. I just want to see what your comment on that would be.
MR STERN: I’m sorry, I didn’t understand the second question
QUESTION: The EU negotiators said that developing countries are preventing full negotiation on mitigation targets for developed countries - at the level of the LCA - and so I wanted to see what your view on that is, thank you.
MR STERN: Well, let me take the second question first, because - I don’t know. I literally just got here and managed to take a shower and then come over here, so if there’s activity like that going on in the LCA negotiation, I just don’t know.
With respect to your first question, look, I completely agree actually that one of the interesting things, I have said this many times. If you look around -- it’s one of the things to be optimistic about actually in the long run, I hope in the short run also -- is that if you look around at what countries in the world, including the major developing countries, are doing, they are actually doing a lot. China put down a number. It might not be the number that everybody would like to see but it is a significant proposal. Brazil has put down a significant proposal. The Indians are also doing that; I have every expectation that South Africa will; Indonesia did, etc.
What is important if we are going to get an international agreement is not just that people announce things domestically, but that they are announcing this domestically and then in effect put them into an international agreement; that they become part of the international agreement, not just that it’s a press release domestically. So they need it to be in an international agreement, they needed to be in an international agreement in a fashion that the country represents that it’s going to stand behind those commitments, those actions and implement them. That’s one thing.
The second thing is, and it’s very important, is that there needs to be transparency and that’s for two reasons. There needs to be transparency so everybody can have confidence that everybody else is undertaking what they said they were going to do, A. And B, there needs to be a sense of where the whole world is going with respect to emissions so we need to be…we can’t be in a world where transparency is just trust. Trust us, you know, we’ll tell you what we’re doing. There’s got to be some kind of consultative type process that allows countries to look at each other and get confidence that everybody is doing what they said they were doing. So those things are important, but your underlying question is very important, it’s very significant because I am not saying that what is being proposed isn’t good enough, I think that there are a lot of good proposals out there, but if we’re going to have an international deal, they have got to be wrapped into an international agreement. That’s got to be part of it.
QUESTION: Two questions, quickly. First, when you came to Bonn originally you got a standing ovation. What does the United States have to do for you and Mr. Obama to get a standing ovation on your arrival? And then, on the Kyoto Protocol mechanisms being discussed here and numbers…there’s legislation on the Hill, for example, in Waxman-Markey there are visions of another mechanism, of another 8% of reductions - that is marketplace, so the 17 will become 25 under that legislation. How does that…how do those numbers figure into your negotiations?
MR STERN: Well, I guess I got a standing ovation in March and I remarked to one of my colleagues that I think I have just peaked. And I thought it would be unlikely that I would get another one - and I think that prediction is probably going to be true. And the President has gotten more than his share of standing ovations, and it would be wonderful if he got one here, but mostly we are not worried about standing ovations - we would like to get a deal done.
With respect to the question about elements in the bill, like the set-asides that you were referring to, you’re absolutely right, there are provisions in the House-passed bill that would actually plus up the U.S. target, it would result in the U.S. target being even higher than the 17 % that we are talking about and maybe a good deal higher. That would be based on provisions that would set aside actually a quite large amount of allowances that would be auctioned and the revenues then used to support international forest preservation, which would in turn translate into a lot of tons saved and a higher target for the United States. And in addition there are some other accounting elements of the bill that are not worth bothering you with, but would also increase the total. We are not counting those in our 17 right now, because this is legislation that’s in process, it is pending in the Senate. They are going to be…exactly how the offset provisions get worked out at the end of the day we don’t know, so I don’t like to promise things that aren’t in my pocket and so we hope that those provisions get included. The target we put down is explicitly described as being provisional on our legislation. If a legislation goes through in all the right ways that I would like to see it go through - and then we’ll be able to report to the Secretariat, God willing, in the spring that our targets are even higher, but we don’t have that yet.
QUESTION: Last night Lumumba Di-Aping of the G77 described the target of $10 billion a year for developing countries as wholly inadequate - enough to buy coffins. Do you accept the historical emissions of the United States – do you accept the sense of a climate debt that is being thrown around, that the United States owes some sort of reparations? And is the United States prepared to go further, considering the seriousness of this problem?
MR. STERN: I actually completely reject the notion of a debt or reparations or anything of the like. I mean let’s just be mindful of the fact for most of the two hundred years since the industrial revolution, people were blissfully ignorant of the fact that emissions caused a greenhouse effect. This is a relatively recent phenomenon, so I think that’s the wrong way to look at this. We absolutely recognize our historic role in putting emissions in the atmosphere up there that are there now, but the sense of guilt or culpability or reparations, I just categorically reject that.
Now, with respect to the issue of financing, that’s an important question … we are…we think, particularly with the poorest countries, but not only, that there are real needs all over the world that need to be met and there are…look, I have said on many occasions…that we shouldn’t be looking at this agreement simply as an agreement to cap emissions, we should be looking at this agreement as a development agreement and an agreement to help countries that are in an earlier stage of development, develop in a way that is sustainable. And the only sustainable development that is possible in the world that we live in now, is low carbon development. Low carbon and sustainable are one and the same thing, so we absolutely see this as a development agreement, we absolutely respect and honor the needs of developing countries all over the world for support. We want to be part of that solution but it’s not a question of reparations. Thank you.