G-8 BUSINESS SUMMIT CALLS FOR STRONG CLIMATE

UNCLAS SECTION 01 OF 03 TOKYO 001110

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TAGS: ECON ETRD SENV PREL OECD JA
SUBJECT: G-8 BUSINESS SUMMIT CALLS FOR STRONG CLIMATE
CHANGE POLICIES


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1. (SBU) Summary. The 2008 G-8 Business Summit featured a
lively debate over climate change and a challenge to business
to take a lead in finding technological solutions to the
situation. Although the U.S. delegation came under strong
European pressure for firm numerical emission targets in the
Summit's joint statement, the final text includes only a
reference to "meaningful emission reductions while assuring
economic growth." Delegations agreed on the importance of
technological innovation in dealing with climate change and
called on governments to increase R&D spending and promote
adequate education for all citizens. Participants also
discussed IPR, steps underway in the Transatlantic Economic
Council to remove/prevent regulatory barriers, and commended
progress on Asian regional economic integration, stressing
this integration must be "inclusive, not exclusive." The
heads of the G-8 business organizations presented the
recommendations to Japan's Prime Minister for consideration
at July's G-8 Toyako summit. The statement's full text is
available at
http://www.keidanren.or.jp/english/policy/200 8/020.pdf. End
Summary


2. (SBU) The Second G-8 Business Summit, hosted by the Japan
Business Federation (Keidanren) took place April 17 in Tokyo.
Japanese Prime Minster Fukuda opened the day-long meeting
with a call to business to take a "dynamic perspective" to
current economic and global challenges and join with
governments in promoting a "low-carbon revolution" in the
global economy. Fukuda's speech foreshadowed much of the
rest of the day's deliberations, which focused on the
structure for a post-Kyoto framework to address climate
change and business' role in finding long-term solutions.
There were then three panel discussions: Enhancing
Competitiveness through Innovation; Tackling Climate Change:
a post-2012 International Framework; and Partnership with
Asia as a Center of Growth.

Lively Debate on Emissions Targets
--------------


3. (SBU) Central to the day's discussion was debate over an
international post-2012 climate change framework.
Participants agreed this year's G-8 will be critical for
reaching consensus on a successor regime to the Kyoto
Protocol and that any post-Kyoto framework must include
emission reduction commitments from all major emitters,
including developing countries. Panelists welcomed Japan's
proposal for a sectoral approach to emission targets as a
creative way forward. Panel moderator Bjorn Stigler of the
World Business Council for Sustainable Development urged
participants to find "a realistic consensus" on what
recommendations to make to G-8 leaders or else "the private
sector will have to accept whatever our political leaders
decide."


4. (SBU) While agreeing on the problem's urgency and the
contribution of technology to an effective response, there
was disagreement on specific measures to include in the
recommendations to national leaders. French Business
Federation President Laurence Parisot described climate
change as a "matter of civilization" and said French business
supports the EU goal of cutting carbon emissions 20% by 2020.

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She regretted the Summit's draft joint statement was "not as
firm as we expected" on specific emission reduction targets.
Such targets, Parisot asserted, are compatible with economic
growth, if growth is "green oriented."


5. (SBU) The U.S. Chamber of Commerce Chairman, Paul
Speranza, stressed four key concepts in any climate change
response: recognition of the urgency of the problem, the role
of technology in finding a solution, the importance of
international cooperation, and a need for a G-8 "Call to
Action" similar to President Kennedy's 1961 space program
challenge. Italian Presidential Advisor Vincenzo Partone,
representing the Confederation of Italian Industry, hoped G-8
leaders will issue a "clear and sincere" climate change
statement at Toyako that recognizes while steps to address
climate change will likely be unpopular and even costly, they
are necessary. Canadian Chamber of Commerce Chairman John
Peller said his country has been slow to recognize the
problem's seriousness, but has adopted a range of measures,
including cap-and-trade and carbon taxes. Peller also said
the issue is likely to figure prominently in this year's
national election.


6. (SBU) During the open discussion following the climate
panel presentations, the U.S. delegation came under strong
pressure from French, British and German delegates, as well
as the President of BusinessEurope, to agree to include a
recommendation for specific numerical emissions targets in
the final joint statement. Juergen Thumann of the Federation
of German Industries (BDI),host of the last year's inaugural
G-8 Business, noted EU members have agreed to specific
targets, which were needed to provide incentives to
politicians to adopt strong policies and for business to
develop the technology needed to solve the climate problem.
Keidanren Vice Chairman Akio Mimura was cautious, noting
countries should agree on a framework before deciding on
specific targets and insisted that whatever targets were
eventually decided, the initial benchmark must be
"equitable." Patrone urged realism in setting targets,
noting EU members had made a firm commitment to a strategy
for achieving its targets and an acceptance of the costs.
Such a pre-requisite did not yet exist among a broader set of
countries.

Innovation Key to Growth, Tackling Climate Change
-------------- --------------


7. (SBU) Climate change was also a subtext for much of the
discussion on innovation and technological change. Keidanren
Vice Chairman Sadayuki Sakakibara challenged his G-8
colleagues to build a basis for innovation by working with
their individual governments to promote increased R&D
spending and adequate education for all citizens. He
reiterated business's role is to ensure links between the
market and the technology that emerges from scientific
research; only in that way can it be sustainable. The BDI
Chairman echoed the call for greater attention to education
as an incubator of innovation. He also described the German
government's efforts to cooperate with business to draft and
implement a national high tech strategy designed to boost
innovation in key industrial sectors.


8. (SBU) Confederation of British Industry President Martin
Broughton highlighted a similar effort by HMG to advance

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research and innovation through, among other steps,
establishing a Ministry of Innovation, Universities, and
Science. He also called for harmonizing intellectual
property rights (IPR) rules and urged the U.S. to follow most
other countries in adopting a "first-to-file" patent
application system. Harold McGraw, President of the U.S.
Business Roundtable noted it was important to maintain high
standards for IPR protection when negotiating free trade
agreements to provide incentives for better IPR protection in
developing countries. All panelists noted the critical
importance of effectively enforcing IPR rules if business is
to develop and to market the technology needed to address
climate change.

Asia as an Economic Growth Center
--------------


9. (SBU) All participants commended Asia's accelerating
economic integration over the past decade and agreed it
provided both opportunities and challenges for G-8 members.
According to Keidanren Vice Chairman Hiromasa Yonekura, Japan
facing slow growth and a declining population had made an
explicit decision to link its economy more closely to the
fast growing economies in the region. Prime Minister Fukuda
has a strong personal interest in regional integration since
his father, former PM Takeo Fukuda, had made closer
partnership with developing Asian economies a pillar of his
foreign policy in the late 1970's. BusinessEurope Chair
Ernest-Antoine Seilliere observed long-term accumulation of
knowledge in the Asia-Pacific region carries enormous
potential for future growth. U.S. Council for International
Business board member Charles Heeter observed APEC is the
best vehicle for greater regional integration as it could
best ensure that integration be inclusive of economies
outside East Asia proper.

Joint Statement Delivered to Prime Minister Fukuda
-------------- --------------


10. (SBU) After the conference, panel speakers led by Summit
chairman Fujio Mitarai, head of Keidanren, presented the
Joint Statement to PM Fukuda and urged him to take up its
recommendations with fellow leaders at July's Toyako Summit.
In the end, the joint statement did not include specific
numerical emissions targets, but merely called for
"meaningful emission reductions while assuring economic
growth." The statement urged emissions reductions be based
on "sound science, national circumstances and sectoral and
transparent, measurable and verifiable methodologies." The
G-8 leaders, it said, should adopt "policies to stimulate
dissemination of low-carbon technology, bilateral and
financial mechanisms that support developing countries to
limit greenhouse gas emissions, and protection of
intellectual property rights in order to accelerate
development of new technology." On other issues, the
statement called on G-8 Leaders to cooperate more closely to
stabilize the world economy and monitor foreign exchange
markets to prevent excessive volatility; to begin formal
negotiations on an Anti-counterfeiting Trade Agreement; to
remove trade barriers to environmental goods and services;
and to accelerate efforts to conclude the Doha Development
Round by the end of 2008.
SCHIEFFER