VISIT OF OES A/S MCMURRAY TO INDONESIA, CLIMATE CHANGE AND

UNCLAS JAKARTA 002139

SIPDIS

SENSITIVE
SIPDIS

DEPT FOR EAP/MTS AND EB/IFD/ODF
NSC FOR CEQ CONNAUGHTON, VAN DYKE
TREASURY FOR TFCA - BERG
DEPARTMENT FOR OES/IET and OES/ETC

E.O. 12598: N/A
TAGS: SENV EAID ECON TBIO ENRG ID
SUBJECT: VISIT OF OES A/S MCMURRAY TO INDONESIA, CLIMATE CHANGE AND
COP-13



1. (U) Summary. In a visit to Indonesia July 26-29, OES A/S
McMurray and several Indonesian officials discussed climate change
policy and the upcoming United Nations Framework Convention on
Climate Change 13th Conference of Parties (UNFCCC COP-13) meeting in
Bali December 3-14. Dr. Emil Salim, President Yudhoyono's chief
environmental advisor, urged strong USG participation at COP-13 and
leadership on climate change. Officials at the Ministry of Forestry
and the Environment expressed interest in carbon trading incentives
to help preserve Indonesia's forests and would like to work closely
with the USG on this issue before COP-13. End Summary.

Climate Change Challenges: U.S. Message
--------------


2. (SBU) A/S McMurray's message was that climate change challenges
need buy-in from all countries, especially from the largest
economies, energy users and emitters. Large, growing economies like
India and China also need to show up at the table: the UN system has
not yet brought them in adequately. Real technology exists now for
China to have cleaner manufacturing and processing. Ambassador Hume
noted that the population of the U.S. has doubled in his lifetime,
while many European populations have been stagnant or only growing
through immigration, which needed to factor into deliberation of
greenhouse gas emissions performance. A/S McMurray noted that
President Bush recognizes that different countries cannot all meet
national commitments in the same way. The U.S. has a demonstrated
track record at developing clean energy technologies to solve
problems. She also noted that the U.S. supports an Australian
proposal for a discussion at September's APEC meeting on climate
change.

GOI Points
--------------


3. (SBU) At the meeting with Ministry of Forestry (MOF) and Ministry
of Environment (MOE) officials, Dr. Rusli noted that the MOF is very
interested in carbon markets as a tool for forest conservation.
Agus Purnomo from MOE commented that financial incentives in the
carbon market to conserve Indonesia's forests are currently too low,
at roughly $3 per hectare, and that US leadership on this issue is
necessary leading up to COP-13. He suggested that it would be more
pragmatic for the U.S. and Indonesia to work together on pilot
activities on this front before December to show that such
instruments are workable, rather than getting bogged down in
scientific and technical details about how to monitor Indonesia's
forests and carbon emissions. He stated that MOF and MOE are
working on this issue and may have some proposals to offer by
October. At a working dinner, McMurray recommended that COP-13
organizers look for issues that are ripe for agreement such as
forest conservation. Dr. Emil Salim said that most countries are in
the shadow of the U.S. in terms of wealth, power and technology: the
world will follow the U.S. lead.

Dr. Emil Salim - Islands Sinking
--------------


4. (U) At the working dinner, Dr. Emil Salim, President Yudhoyono's
chief environmental advisor, said that Indonesia could lose 2000
islands to rising seas by 2020. A representative of the Center for
International Forestry Research (CIFOR) noted that many actions can
be taken without major up front costs -- "no regret"-- mitigation
and adaptation policies that Indonesia and the international
community can pursue simultaneously. Indonesia has a massive
resource in its peat swamp forests, which are being lost to draining
and burning. Preserving these will help. The World Bank
representative noted that the Bank is looking at how the costs of
climate risks and "climate proofing" will be borne.

HUME