SWEDEN: TREASURY DEPUTY'S CLEAN TECHNOLOGY FUND DISCUSSIONS

UNCLAS SECTION 01 OF 02 STOCKHOLM 000416

SENSITIVE

SIPDIS

E.O. 12958: N/A
TAGS: PGOV ECON ENGR ENRG SENV EAID TBIO TRGY SW
SUBJECT: SWEDEN: TREASURY DEPUTY'S CLEAN TECHNOLOGY FUND DISCUSSIONS
WITH A CAUTIOUS BUT INTERESTED SWEDISH GOVERNMENT


1. (SBU) On May 28, Deputy Treasury Secretary Robert Kimmitt
raised the Clean Technology Fund (CTF) with Gunilla Carlsson,
Swedish Minister for International Development Cooperation; also in
attendance were Per Jansson, State Secretary in the Ministry of
Finance, and Anders Turesson, Sweden's Chief climate change
negotiator, Ministry of Environment. Kimmitt described the CTF in
detail, commenting that the CTF's focus on working closely with the
developing world and its interaction with the private sector, the
venture capital community, and green technology were a good match
for both the Swedish government and Swedish business. Carlsson
stressed the need for the U.S. and Sweden to continue to work
closely together before COP-15 in Copenhagen (December 2009) and the
importance of including developing countries in the CTF
decision-making process. END SUMMARY.


2. (SBU) Carlsson began the meeting by describing in detail her
recently-created international Commission on Climate Change and
Development (CCCD). The CCCD, funded entirely by the Swedish
government, is designed to lead to greater understanding of the
impact of climate change on local communities, particularly in the
developing world. "We created and financed this Commission," said
Carlsson, "in order to get the poor people's perspective on climate
change." Carlsson said the CCCD is a hands-on entity which met
recently in Cambodia and will soon reconvene in Mali. Its mission
is to build developing countries' capacity to deal with climate
change, since "the developing world can't rely solely on Overseas
Development Assistance to solve problems."


3. (SBU) After thanking the Swedish government for hosting the
International Compact with Iraq conference, Kimmitt praised Sweden's
"strategic vision" on climate change and stressed the important role
Sweden has played, plays, and will play in the future when it
assumes the EU Presidency in July 2009. He asked Carlsson how the
CCCD works within the framework of the EU Presidency and the UN.
She responded that the World Bank is interested in the Commission's
findings, adding that "it would be optimum if the Commission could
help the UN by facilitating discussions and negotiations on climate
change in the lead-up to an international, post-2012 agreement."


4. (SBU) Kimmitt told Carlsson that the CTF is not in conflict or
competition with the UN's Global Environment Facility (GEF),adding
that the two can "complement, learn and draw from each other." Like
the GEF, the CTF takes into account the lesser-developed countries'
perspective and ensures that all countries play a role. He
explained how both donor and recipient countries would be actively
involved in the CTF's governance, with the trust fund committee
equally split between them. In response to a question from Carlsson
re whether the CTF would continue beyond the Bush Administration,
Kimmitt commented that the CTF enjoys strong support in the current
U.S. Administration, in Congress, and into the next Administration,
whether Republican or Democratic.


5. (SBU) Kimmitt and Ambassador Wood then discussed the timeline
for launching the CTF at the G-8 in Hokkaido in early July. He
explained that the USG has pledged $2 billion to the CTF over a
three-year period, with the United Kingdom and Japan both pledging
$1.5 billion to reach the current total of $4.5 billion. The CTF's
start goal is $10 billion, with a minimum suggested contribution to
donor countries of $50-100 million over a three-year period.
However, Kimmitt and Wood said that in order for Sweden - or other
countries - to play an active role in the CTF, the pledge would need
to be in the $300-500 million range over a three-year period.


6. (SBU) Carlsson seemed surprised by the $300-500 million
suggested figure, responding that "Sweden will look into the CTF in
due time. We want to deepen climate change cooperation with other
countries. For us, where we put our development money and what
impact it has is very important." Finance Ministry State Secretary
Jansson was more positive, saying the developed world needs to build
confidence before COP 15 in Copenhagen in December 2009. He added
that the CTF would "send a strong signal pre-Copenhagen" that the
major emitters are committed to real change.


7. (SBU) COMMENT: Post will continue to work the CTF at all levels
with our GOS counterparts. Secretary Rice mentioned it during her
May 29 meetings with Prime Minister Reinfeldt and Foreign Minister
Bildt; we anticipate that U.S. officials will again raise it with
Bildt during his Washington meetings this week. Environment
Minister Andreas Carlgren will be in Washington June 23-24 for
meetings, during which we expect the CTF to be raised frequently by
USG interlocutors. Our view is that the GOS is warming to the idea,
but finds the price tag for a seat at the table to be very steep.



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8. (U) This cable has been cleared by Deputy Treasury Secretary
Kimmitt.

WOOD