UK ENGAGING GERMANY ON POSSIBLE ENERGY/CLIMATE

C O N F I D E N T I A L SECTION 01 OF 02 BERLIN 000479

SIPDIS

NOFORN
SIPDIS

DEPT PASS CEQ AND EPA - MEDEARIS, DEPT FOR G, OES, AND EEB

E.O. 12958: DECL: 3/8/17
TAGS: SENV ENRG EAIR GM
SUBJECT: UK ENGAGING GERMANY ON POSSIBLE ENERGY/CLIMATE
DELIVERABLES FOR U.S.-EU SUMMIT

REF: JACOBY-PATON TELECON OF 8 MARCH

Classified By: EMIN Robert F. Cekuta for reasons 1.4 (b) and (d).


1. (C/NF) A British Embassy contact passed emboff the
following British draft non-paper March 7 that they have been
told to deliver to the German government. He asked that the
USG not/not disclose that it had received/knew the contents
of the document. The non-paper is most striking for its
pragmatic approach, running contrary to media speculation
that PM Blair and Chancellor Merkel plan to use the U.S.-EU
and G-8 summits to impose a post-Kyoto framework on the
United States. The UK non-paper recognizes that questions of
a post-2012 framework and emissions trading are contentious.
The paper advocates discussion on these issues between the
U.S. and EU, along with moving ahead on concrete cooperation
on clean energy technology, energy efficiency, and
harmonization of standards. The paper may be useful in
identifying areas of agreement and, perhaps, proposing
alternatives to Germany's goal of 2-degree Celsius cap on
global temperature increase.


2. (C/NF) Begin text of UK non-paper:

DRAFT UK NON-PAPER FOR GERMAN PRESIDENCY ON CLIMATE CHANGE
FOR EU-U.S, SUMMIT

The UK strongly supports the proposal to make energy and
climate change a key objective of the EU-U.S. Summit through
the development of an Implementation Plan based on the
conclusions of the EU-U.S. High Level Dialogue on Climate
Change, Clean Energy and Sustainable Development (Helsinki,
October 24-25, 2006),and the recent outcomes from the
February 20th Environment Council Conclusions.

The UK agrees that the plan should look to identify specific
areas for collaboration between the EU and the U.S. on energy
efficiency, biofuels and carbon capture and storage. Such a
plan could include specific action points that will result in
real emissions reductions, as well as increasing energy
security, both of supply and demand.

The summit comes at a crucial time in international climate
change developments, and will provide an opportunity to
develop discussions on elements of a future framework,
especially, in the light of developments at the March Spring
Council, the G8 5 Environment Ministerial and the official
level preparatory meeting for Heiligendamm.

The summit should look to strengthen the UNFCCC process by
agreeing to support the launch of negotiations on a
comprehensive global future framework in 2007, and concluding
negotiations by 2009, to avoid a gap between the first and
second commitment phases of the Kyoto Protocol.

POSSIBLE ELEMENTS (following the Helsinki Agenda)

The EU and U.S. delegations agreed to strengthen bilateral
cooperation including to:

"Promote the commercial deployment of clean coal and carbon
sequestration technologies, including through the Carbon
Sequestration Leadership Forum;"

UK SUGGESTION: The EU's work on CCS should be emphasised,
highlighting the European Commission's communication
'Sustainable Power Generation from Fossil Fuels: aiming for
near zero emissions from coal after 2020'. We could
encourage the U.S. to agree language which shows a commitment
to looking beyond Futuregen and at deployment mechanisms
along similar lines. There should be a commitment to
continued/increased support of the Carbon Sequestration
Leadership Forum.

"Promote energy efficiency, particularly in the
transportation sector and for buildings and appliances;"
UK SUGGESTION: We should for U.S. endorsement of the EU
concept of an international agreement on energy efficiency.
Areas on which the agreement could helpfully focus include
standards for globally traded goods (where we already have
effective cooperation on Energy Star),standby-by power,
lighting and standards for new and existing buildings. These
are also all areas we are simultaneously pushing for progress
within a G8 context, building on the Gleneagles POA and the
IEA's G8 work. As well as committing to information exchange
we should aim to agree practical actions to deliver progress
and actual energy savings.

Areas for specific EU-U.S. collaboration could be developed
from those suggested in the G8 St Petersburg Summit
communication on Energy:

In the transportation sector, President Bush has announced
plans to reform and modernise the Corporate Average Fuel
Economy (CAFE) Standards, intended to reduce projected annual
gasoline use by up to 8.5 billion gallons (5%). The European
Commission will be proposing a legislative framework to
reduce CO2 emissions from new cars and vans by the end of

2007. We could look to identify ways of linking U.S. and EU
fuel economy standards as a possible precursor to global
standards.

"Research, develop and deploy second-generation biofuels;"

UK SUGGESTION: The UK supports further collaboration on
research and development of 2nd generation bio-fuels, and the
development of roadmaps would be a beneficial measure.
President Bush has announced a mandatory fuels standard will
require 35 billion gallons of renewable and alternative fuels
in 2017. In support of this the U.S. Department of
Agriculture has proposed $1.6 billion in new funding for
renewable energy, with a focus on cellulosic energy research
and production. We should look to capitalise on this by
seeking to share expertise on biofuels and linking U.S.
research with European research carried out with funding
under the Framework 7 programme. There could also be a
commitment to continued/increased support for the EPOBIO
project.

"Both sides reaffirmed their commitment to continue joint
dialogue and efforts under the UN Framework Convention on
Climate Change including work on long term cooperative action
in the process established in Montreal in December 2005."

UK SUGGESTION: At the inaugural meeting of the EU-U.S. High
Level Dialogue on Climate Change, both sides reaffirmed their
commitment to continue joint dialogue and efforts under the
UNFCCC. We should look to reiterate, and where possible,
strengthen the language already expressed in order to send a
message that the U.S. is supportive of the UNFCCC process.
An ambitious outcome would be for the U.S. to agree to
language supporting the need for a long-term stabilisation
goal, and for a firm mandate to begin negotiations on
elements of a post 2012 framework in Bali at the end of 2007,
with the intention of concluding negotiations in 2009.

POSSIBLE ELEMENTS (not from HELSINKI AGENDA)

-- Emissions Trading

UK SUGGESTION: The UK agrees that the EU should continue to
show that the EUETS works and to send positive messages about
the long-term viability of the scheme. An ambitious outcome
would be an agreement to start an EU-U.S. dialogue on lessons
learnt from the EUETS. This could be presented as a response
to the legislative proposals that have been tabled in the
first few months of 2007 in the U.S., and would demonstrate
an awareness on the part of the U.S. of the advantages
inherent in developing the role of carbon markets in the
future, as is being done with the Australian Emissions
Trading Task Force.

-- Economics of climate change

UK SUGGESTION: That a follow up study to the Stern review be
carried out, focusing on the economic and trade benefits and
drawbacks of closer alignment of clean energy technology and
climate change policies between the EU and the U.S..

End text of UK non-paper.
TIMKEN JR