AUSTRIA: UNCERTAINTY EMERGING ON POST-BALI NEXT STEPS

UNCLAS SECTION 01 OF 02 VIENNA 000363 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 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 change discussion at the March 13-14 European Council. According to Schuberth, the Council outcome would not include a call for developed countries to make 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. ¶7. (SBU) Krepela maintained that there has not been any specific VIENNA 00000363 002 OF 002 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#