AUSTRIA UNCERTAINTY EMERGING ON POST-BALI NEXT STEPS

UNCLAS SECTION 01 OF 02 VIENNA 000362

SIPDIS

SIPDIS,

SENSITIVE

E.O. 12958: N/A
TAGS: SENV ENRG EUN AU
SUBJECT: AUSTRIA UNCERTAINTY EMERGING ON POST-BALI NEXT STEPS

REF: STATE 24257

VIENNA 00000362 001.2 OF 002


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Summary
--------------


1. (SBU) In March 10-12 discussions with Emboffs, lead GoA
ministries and the Chancery stated unequivocally that there were no
plans for the March 13-14 European Council to call on other
developed nations to commit to 25-40% cuts in emissions. The main
focus of the climate change discussion at the Council will be the
distribution of the emissions reduction burden within the EU. Our
GoA interlocutors agreed, in principle, to a flexible system for
developed country commitments, similar to the EU's internal
"bubble." End Summary.


Comment
--------------


2. (SBU) There appears to be uncertainty within the GoA, and most
likely within the EU, on what specifically the EU wants from other
developed countries on reduction targets. While our interlocutors
agreed that any post-Kyoto agreement must include real and robust
commitments for emerging economies, there was a wide variation on
how far and how hard the EU should engage China and India on the
issue. A recent Austrian Council of Ministers' statement reflects a
growing sentiment that industry concerns must be incorporated in the
EU's discussion of its internal burden sharing. Overall, the GoA
understands that there is increased scope for U.S.-EU collaboration
on climate change and that the U.S. and EU must lead the way
cooperatively to achieve a truly global agreement.


3. (SBU) Embassy believes that the pressure of the EU internal
discussion on burden-sharing may be leading to a more open-minded
approach in the working level of the Austrian bureaucracy to the
post-Kyoto framework. In this round of discussions, we found a more
willing recognition of the need to balance differing national
interests and situations. However, much work remains to be done to
convey an accurate view of USG positions. Our MFA interlocutors
insisted at the outset of the meeting that the U.S. rejected
binding, national targets in the framework of an international
agreement, for example. Moreover, though working levels are
beginning to acknowledge both USG movement on climate change and the
merits of USG ideas, neither the media, political leaders, or
general public has yet to do so. End Comment.


4. (SBU) Emboffs delivered reftel points March 10-12 in separate
meetings with the Chancellor's Office, Ministry of European and
International Affairs (MEIA),and Ministry of and Environment. We
also conveyed points to the Office of the Vice Chancellor/Minister
of Finance). In presenting the U.S. case with all interlocutors,
Emboffs stressed: 1) that the U.S. proposal for legally binding
mid-term national commitments was essentially the same as the
approach adopted by the EU for its own members; 2) that resolving
the "targets" issue should be seen as a question of structure rather
than numbers; and 3) that U.S.-EU agreement on the structure of
targets was the best way to maximize pressure on India and China to
participate meaningfully.


Austrian Government on Expectations for Council
-------------- --


5. (SBU) Helene Schuberth, the Chancellor's Economic Advisor, said
that the internal burden sharing commitments and the emissions
allowance allocations within the EU Emissions Trading Scheme(ETS)
would be the main focus of the climate chage discussion at the
March 13-14 European Counci. According to Schuberth, the Council
outcome wuld not include a call for developed countries to mke a
specific emissions reduction commitment. However, the Council might
reiterate EU support for 25-40% reduction targets by 2020 in more
general terms. Schuberth emphasized that the EU views itself as a
forerunner on climate change policies and as a "mediator" between
the G-77 and developed countries on this issue. The GoA, according
to Schuberth, would not demand that India and China commit to
specific targets in the post-Kyoto agreement.


6. (SBU) Christian Krepela, Head of the MEIA's Environmental and
Energy Department, confirmed that the Council Conclusions would not
ask other developed countries to commit to specific reduction
targets. According to Krepela, the March 27, 2007 EU Presidency
Conclusions are still valid: "...developed countries should
continue to take the lead by committing to collectively reducing
their emissions of greenhouse gases in the order of 30% by 2020
compared to 1990." Asked how a collective commitment could be made
legally binding, as supported by the EU, both MFA and Environment
Ministry (see below) contacts retreated, saying that this was only
the EU's opening position.

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7. (SBU) Krepela maintained that there has not been any specific
discussion on how non-EU developed countries should commit to this
goal. Krepela said that the March 13-14 summit would discuss next
steps on the EU's Energy and Climate Package, e.g., burden sharing
and ETS. Krepela acknowledged that the emerging economies must be
included in any post-Kyoto agreement. In Krepela's view, the USG
goal of first obtaining agreement from the emerging economies to the
concept of a binding commitment was the correct approach.


8. (SBU) Elfriede More and Dieter Beisteiner from the Ministry of
Environment's International Environmental Affairs Division told us
that the Council would not call on other developed countries to make
specific emissions reduction commitments. The 25-40% emissions
reduction range was seen as a "flexible approach" to which all
developed nations should collectively subscribe. However, the EU
would not make specific demands of other developed countries.
Beisteiner stressed the importance of offset opportunities and
flexible mechanisms, such as the Clean Development Mechanism, as
part of any post-Kyoto emissions reduction goals. Beisteiner voiced
skepticism regarding a global sectoral approach, claiming that China
and India would not agree to such an approach. (Note:
Representatives of Austrian industry and the Ministry of Economics
previously told us that they strongly support a sectoral approach to
combat climate change. The official GoA position paper for the
Council also includes support for a sectoral approach. End Note.)



GoA Position on EU Climate Package
--------------


9. (SBU) The official Austrian position, as outlined in a Council
of Ministers' statement, calls for "a fair distribution of burdens",
free allocation of emissions allowances for "energy intensive
industries," and a reduction in the Commission's target for
Austria's share of renewables in its energy mix (34%). These
measures are intended to ensure the competitiveness of Austrian
industries and jobs. For a post-2012 agreement, Austria favors the
development of a worldwide "sectoral benchmark system" for
environmentally sound industries. However, the statement also notes
that "WTO-compatible import regulations" may be necessary to ensure
competitiveness.

KILNER