OECD REPORTING: WORKING PARTY ON ENVIRONMENTAL

UNCLAS SECTION 01 OF 04 PARIS 004111

SIPDIS

FROM USOECD

STATE FOR EUR/ERA AND EUR/PPD
STATE FOR OES/CMCMURRAY
WHITE HOUSE FOR CEQ/JCONNAUGHTON, RDIXON, KCAUTHEN
EPA FOR OIA/AYRES, JMORANT, KMASON, GCASTELLANOS
EPA FOR OAR/HOLMSTEAD
EPA FOR OPPTS/SHAZEN, BMILROY
EPA FOR AO/AFARRELL, SHOYT, DLEAF
EPA FOR OW/BFEWELL, RGORKE
EPA FOR OECA/PHARRIS
EPA FOR REGION 8/RROBERTS
EPA FOR OEI/LTRAVERS
EPA FOR OPEI/ACRISTOFARO
EPA FOR OGC/ABERNS
DOI FOR RBOWMAN

E.O. 12958: N/A
TAGS: SENV ETRD KSCA FR OECD CZ
SUBJECT: OECD REPORTING: WORKING PARTY ON ENVIRONMENTAL
PERFORMANCE, REVIEW OF THE UNITED STATES, REVIEW OF THE
CZECH REPUBLIC, AND SPECIAL SESSION MEETING ON "BEYOND THE
2ND CYCLE," MAY 17-19, 2005, PARIS, FRANCE.


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SUMMARY
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1. OECD's Environmental Performance Review (EPR) of the
U.S., the first such assessment in nearly a decade, was the
centerpiece of May 17-19 meetings convened by OECD's Working
Party on Environmental Performance (WPEP). The U.S. EPR
peer review session, involving OECD staff and delegates from
24 other OECD member countries, took place on May 17th. The
Czech Republic's EPR peer review session took place on May
19th, and a Special Session to discuss the future of OECD
EPRs was held on May 18th. James Connaughton, Chairman of
the White House Council on Environmental Quality (CEQ),led
the U.S. delegation. Major actions and decisions on the
week taken included: 1) discussion and approval of the
Conclusions and Recommendations chapter of the U.S. EPR by
the Working Party; 2) discussion 1of the final text of the
main U.S. EPR report with the OECD Environmental Directorate
staff; 3) discussion and approval of the Conclusions and
Recommendations chapter of the Czech Republic's EPR by the
Working Party; and 4) presentations to, and discussions by,
the Working Party concerning the next (3rd) round of
Environmental Performance Reviews, scheduled to start in
2007-2008. END SUMMARY
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Discussion and Approval of the U.S. EPR in the Working Party
on Environmental Performance (WPEP)
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2. OECD Deputy Secretary General Akasaka opened the
meeting and recognized the U.S. leadership role in
establishing OECD's Environmental Performance Review process
and in providing world leadership in the area of the
environment. Ambassador Constance Morella thanked the
Secretariat for its review and introduced Delegation Head,

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James Connaughton.


3. Chairman Connaughton, in opening remarks, addressed
three issues of particular interest to the Secretariat and
OECD member countries: federalism, water issues, and climate
change. Concerning federalism, the Chairman gave a
historical review of the origins of the U.S. system of
environmental protection. Concerning water issues, Chairman
Connaughton addressed safe drinking water, water pollution
(specifically the progress that has been made on point-
source pollution) and the work remaining on non-point water
pollution. He noted the U.S. progress in moving from a "no
net-loss" wetlands program to one of a "net-gain" program.
On climate change he described the President's 2002 Climate
Change initiative, which has resulted in significant federal
and matching fund investments, and both domestic and
international partnerships. He noted that the U.S. rise in
greenhouse gas emissions is, like other OECD countries, due
to an increase in population, cars, distances traveled,
larger homes and larger electricity demand (i.e. a challenge
of managing growth).


4. In the detailed question and answer session on air
pollution, the U.S. delegation explained why CO2 is not
included in the Clean Air Act; defended our current cap
levels within our cap and trade emission trading program;
addressed efforts to reduce mercury and other heavy metals;
and explained our renewable energy activities.


5. Concerning water issues, the U.S. was asked about water
quality and water quantity issues. In the U.S. response, a
distinction between water-rich and water-poor areas of the
U.S. was made; an explanation of the historic origins of
western water rights was given; a description of the
increase in water system monitoring and water quality
standard stringency was presented; and a lively discussion
about shifting water use from agricultural to other end uses
through the introduction of water "banks" and other pricing
systems ensued.

6. Concerning nature and biodiversity, the U.S. was
congratulated for its long history of natural lands
protections and a discussion ensued on several issues
including invasive species; farm and agricultural practices;
biodiversity; and the role of regional partnerships in
improving watershed system health.


7. Concerning Effective and Efficient Environmental
Management, the U.S. engaged with numerous countries in a
discussion of our integrated permit systems and energy and
transport environmental subsidies. Concerning Environmental
Federalism, the U.S. successfully explained our unique
system of federal, state, local and tribal roles. Chairman
Connaughton and EPA Regional Administrator Robbie Roberts
explained how the federal government works in cooperation
with states and local government.


8. Concerning the Environment and Economy interface, the
U.S. defended its system of environmental policy in regards
to transport environmental pollution. The U.S. noted that
our extensive system of fuel and vehicle pollution control
regulations successfully internalizes most of the
environmental externalities associated with transport. In
contrast to the European system of relatively high fuels
taxes, the U.S. system was explained and discussed.
Similarly, in regards to agricultural subsidies, Chairman
Connaughton explained recent U.S. government efforts to
reduce environmentally harmful agricultural practices by
shifting subsidies to more conservation-oriented practices.
He also noted that the President is opposed to any new
subsidies for oil and gas development. There was also an
interesting discussion on the current state of U.S.
environmental information reporting. The U.S. EPR contained
an original recommendation that the U.S. renew its annual
nation-wide environmental reports. Several from the U.S.
delegation explained the current use of electronic
information dissemination and how the U.S. has moved well
beyond the age of the "paper" report.


9. Concerning Climate Change, the U.S. answered numerous
questions from the other countries. We explained our
investments in energy efficient and greenhouse gas reduction
technologies and again explained our position on the Kyoto
Protocol. Chairman Connaughton explained that we have
negotiated sector specific commitments on reducing energy
intensity and that states are internalizing these new
federal strategies. He noted the new energy service
contracts initiative for federal facilities, which could
lead to a 46 million metric ton reduction in CO2 by 2015,
and the methane-to-markets partnership program.


10. The session concluded with a successful consensus
negotiation on the exact text of the U.S. EPR's Conclusions
and Recommendations chapter. The U.S. thanked the
Secretariat for an instructive information exchange and for

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a healthy dialogue on the state of U.S. environmental
performance and policies, and reiterated our desire to take
the recommendations of the OECD back to the U.S. for robust
implementation.

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Special Session: Beyond the 2nd Cycle (of Environmental
Performance Reviews)
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11. On Wednesday, May 18th the U.S. and other countries
participated in a discussion of possible ways to proceed
with the next round of OECD country-specific environmental
performance reviews. The meeting received presentations
from other parts of the OECD (Development Assistance
Committee, Economics Directorate) on their current processes
for producing country level reviews in their respective
areas. The delegation also heard an update from the
International Energy Agency (IEA) on their country energy
review process. Notable from these presentations was the
fact that the DAC and Economics Directorate funded 95% and
100% respectively of the country reviews out of their OECD
Part 1 budget, whereas the Environment Directorate is
increasingly dependent on voluntary contributions to
maintain the number of reviews it is performing.


12. A discussion of how to conduct the next cycle of OECD
country level environmental performance reviews revealed
some common observations. First, most countries noted that
the length between reviews of a country (now approaching 7-8
years) is too long and likely to get longer if additional
countries join the OECD. Suggested ideas for shortening
the cycle included reducing the budget and number of OECD
staff associated with each review; limiting the number of
subject areas each review covers; and picking special topics
to conduct comparative studies between countries, rather
than continuing to produce similarly broad, country-specific
EPRs. Several countries noted the increased Ministerial-
level participation in the EPRs and the increased relevancy
of the EPRs in the country being reviewed. Several
countries supported the idea of producing "derived" products
from the reviews, such as that done on water by the WPEP
several years ago.


13. The Chairman and Secretariat agreed to summarize the
day's deliberations and present them in form of a discussion
paper to member countries for further reflection. The
Chair's summary of the day's discussions noted: a) length of
reports is acceptable; b) themes (e.g. economy and social
interface) should be more focused; c) use of a preliminary
questionnaire to develop advance detailed information for
the review delegation teams should be continued and
broadened; d) review meetings like those held this week
could be even more policy focused; and e) WPEP should keep
producing 3 to 4 country level reviews per year with 1 or 2
derived products which would be dependent upon existing
information. Several delegations requested that an
electronic discussion group be established to maintain idea-
sharing on this subject. This was declined by the
secretariat and chairman in favor of an iterative process,

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culminating in presentation of a status report to the
Environment Policy Committee (EPOC) in March 2006.
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Environmental Performance Review of the Czech Republic
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14. As with the U.S. EPR, the Czech Republic's EPR was
thoroughly debated amongst all member countries. Most
countries applauded the Czech Republic's significant
progress in reducing environmental pollution, especially air
pollution. The U.S. asked if the recent leveling off of
air pollution emission reductions signaled the beginning of
a more difficult period for future progress. The Czech
delegation responded by thanking the U.S. EPA for providing
technical assistance over the period of review for air
pollution control and noted that they are struggling against
significant increases in economic activity, increased
vehicle ownership and the resultant environmental pollution.
The Czech Republic is very interested in establishing a cap
and trade system for greenhouse gas emission trading and a
discussion on their progress was lively. The Czech
Republic's relative lack of progress on cleaning up surface
and ground water pollution was noted and the international
dimension of surface water pollution issues was discussed.
The Czech delegation explained their interest in increasing
the amount of rail transport, in optimizing the growth in
highway traffic, and described their success in moving the
country into a system of European Community environmental
laws and regulations. Since the last EPR of the Czech
Republic in 1997, they have passed 16 major environmental
statutes; have decreased ambient levels of SO2 emissions by
48 percent, and VOC levels by 16 percent; and have done all
this with increasing public support for environmental
progress. The share of people who believe the Czech
government is dealing well with environmental issues
increased from 30% in 1997 to 54% in 2002. An update on
this poll in 2004 shows some 73% of the population is
satisfied with the quality of their local environment.


15. The attending member countries debated and approved by
consensus the Czech EPR's Conclusions and Recommendations
section and applauded the Czech delegation's continued
dedication to improving the environmental quality and health
of the Republic. The Czech delegation acknowledged that the
easiest steps in curbing rampant air and water pollution had
been taken and that future challenges would need to be met
through increased use of economic and fiscal instruments,
substitution of cleaner fuels and production processes, and
continued major financial investments in a cleaner economy.


16. COMMENT: Throughout the week's discussions-and
especially during the May 17 EPR peer review, the U.S.
delegation was treated with professional respect by its
foreign interlocutors. Numerous questions, showing keen
interest in the U.S. environmental management experience of
recent years, were posed and fielded without polemics or
posturing. Excellent preparation on the part of EPA and
other agency2 staff, 3and the workmanlike attitude of OECD
secretariat personnel, combined with years of previous

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experience working with each other, yielded a positive
outcome for all concerned. Publication of the U.S. EPR as
an OECD report later this year will merit attention on the
part of Department public diplomacy personnel as an
internationally validated account of America's impressive
environmental record.


17. This cable has been cleared by CEQ, EPA/OIA, DOI, and
State/OES.

MORELLA





_______________________________
1I do not believe our approval of their draft or their
approval of our changes was the outcome; rather, we had a
discussion of our concerns over some portions of their text
and their concerns and questions on our proposed revisions,
with some indications of where they agreed or disagreed with
us, but the final text to be determined by them. I
accordingly believe "discussion of the final text" is a more
accurate description.
2Although EPA did much of the work, there was significant
input from State, DOT, NOAA and Interior
3