More on France - Brazil Climate Pact

UNCLAS PARIS 001545 SIPDIS NOT FOR INTERNET DISTRIBUTION SENSITIVE E.O. 12958: N/A TAGS: SENV ENRG KGHG FR SUBJECT: More on France - Brazil Climate Pact REF A) Paris 1520 B) Brasilia 1322 ¶1. (SBU) Gwenaelle Huet, Chief of staff to Brice Lalonde, French Ambassador for climate change negotiations, commented to ESTH Counselor November 19 on the "Common Position" announced by Presidents Sarkozy and Lula da Silva last week. She said that that Environment Minister Jean-Louis Borloo thinks the accord is not a sufficient basis for negotiation at Copenhagen, but is useful as a bridge between Annex I countries and the non-Annex I developing countries. Particular sticking points in the negotiations were Brazil's lack of support for the Mexican "green fund" financing proposal, and Brazil's opposition to setting a date for peaking of non-annex I country emissions (given possible greenhouse gas (GHG) fluctuations related to deforestation). The French also had to be creative over REDD (Reducing Emissions from Deforestation in Developing Countries) because the Brazilians did not want a reference to the carbon market as a source of financing. ¶2. (SBU) The Brazilians agreed to support the proposal to establish a World Environmental Organization (WEO),though Huet explained that the WEO concept is still under development, and that France is open to suggestions on its possible governance and membership. One thought is that the WEO, as a neutral body, could grant flexibility to countries in implementation of commitments on greenhouse gas emission reductions, much as the IMF or European Bank allow countries to run larger budget deficits during recessions. ¶3. (SBU) Huet noted that another possible WEO role might be in handling Assigned Amount Units (AAUs) rolling over from the Kyoto Protocol, an issue for the EU's eastern European member states and especially for Russia, which has a large number of AAUs resulting from the collapse of the Soviet economy. France's position is that if Russia wants to retain its AAUs, then it must commit to greater emission reductions. According to Huet, Minister Borloo believes that a fair middle ground must be found between Russia's desire to retain the AAUs and France's insistence that the AAUs cannot be used to subvert the goals of reducing GHG and hopes to travel to Moscow next week to discuss these and other issues with the Russians. RIVKIN