CORRECTED COPY - EU COUNCIL FAILS TO AGREE ON

UNCLAS BRUSSELS 001551

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ENRG EUN KGHG SENV TRGY
SUBJECT: CORRECTED COPY - EU COUNCIL FAILS TO AGREE ON
CLIMATE FINANCING


1. (SBU) This is an initial spot report of the climate
outcomes of the EU Council. USEU will provide further detail
next week after conversations with EU officials.


2. (SBU) Summary. Despite efforts from the Swedish
Presidency and the European Commission, EU Heads of State and
Government failed to agree on either of the two main climate
financing issues:

- How to internally share the financial burden among the
Member States; and

- The level of financing the EU plans to bring to the
table in Copenhagen.

The EU will set up a Working Party to address financial
burden sharing and plans to complete work in advance of
Copenhagen. The outcome is being hailed as a success by
Poland, and both the Commission and the Swedish Presidency
are promoting it as a success as well, focusing instead on
the agreement that 100 billion euros per year will be needed
in 2020 to address global climate change. End summary.


3. (SBU) The European Council, meeting in Brussels on October
29-30, was unable to resolve the key issues facing it with
regard to climate financing. The Swedish Presidency was
hoping to clarify how Member States would divide the
financial commitment the EU will bring to the Copenhagen
climate negotiations (known as "burden sharing"). However,
Poland and Hungary, supported by the other new Member States,
argued that ability to pay, as opposed to greenhouse gas
(GHG) emissions (known as the "polluter pays" principle),
should take precedence in determining a Member State's
contribution. Additionally, Member State officials indicated
to USEU EconOff that Germany also opposed the various
proposals on the table, so ultimately, no agreement was
formed. Instead, the EU will form a Working Party to work
out the details of the internal adjustment mechanism. To
ensure that all Member States are in agreement, the European
Council must approve by consensus the Working Party's
proposals.


4. (SBU) With the burden sharing discussion unresolved, it
prevented the Swedish Presidency and the Commission from
securing concrete figures for the EU's financial contribution
to be brought to Copenhagen. The Council did support the
Commission's proposal that it will cost around 100 billion
euros per year by 2020 to address global mitigation and
adaptation, and that between 22 and 50 billion euros will
need to come from international public financing. However,
despite proposals from the Commission that recommended that
the EU commit to ten billion euros of that figure, the
Council was unable to come to agreement. Instead, the
Council stated that the EU will contribute its "fair share."


5. (SBU) The Council was however, successful in securing
agreement on key aspects of mitigation targets. It calls on
all UN parties to agree to limit global temperature increase
to two degrees C through developed country emission
reductions of 80-95% and global emission reductions of 50%
from 1990 levels by 2050. It also supported a long-term EU
target of 80-95% reductions by 2050, and reiterated its
commitment to move to 30 emission reductions by 2020 with
comparable commitments from other countries.


6. (SBU) Comment. The outcome of the EU Council is close to
what was expected given the strong positions held by several
parties, particularly the Eastern Member States. The Swedish
P disappointed with the a positive spin publicly.tes
, and USEU agrees, as a lack of agreement before
Copenhagen would sinify a monumental political failure by
the EU, which holds itself as the global leader on climte
change. End comment.

MURRAY

.