SCENESETTER FOR FRENCH MINISTER OF STATE BORLOO'S VISIT TO

UNCLAS SECTION 01 OF 05 PARIS 000294 SENSITIVE SIPDIS FROM THE CHARGE FOR: DOE SECRETARY CHU DOT SECRETARY LAHOOD USEPA ADMINISTRATOR JACKSON WHITE HOUSE FOR FROMAN AND BROWNER STATE SPECIAL ENVOY STERN AND ACTING OES A/S HARNISH USDA FOR OA - AMB SUZANNE HALE, OCRA SHARYNNE NENON USDA ALSO FOR OSTA LIZ JONES E.O. 12958: N/A TAGS: SENV ENGR TRGY KGHG PREL FR SUBJECT: SCENESETTER FOR FRENCH MINISTER OF STATE BORLOO'S VISIT TO WASHINGTON MARCH 4 REF: A) 2006 PARIS 2439, B) 2007 PARIS 4139, C) 2007 PARIS 4364; D) 2008 PARIS 714; E) 2008 PARIS 1071; F) PARIS 00039 G)2008 PARIS ¶2222. Summary -------------- ¶1. (SBU): Minister of State Jean-Louis Borloo arrives in Washington March 4 to engage the USG on climate change and energy policy. As the head of France's "super ministry" combining environment, transportation and energy under the rubric of sustainable development, Borloo is the third ranking official in France after the President and the Prime Minister. He maintains consistent high public approval ratings as well as a reputation for volatility, unpredictability, and late night bon-vivant habits. Borloo also has an impressive track record of delivering both a domestic environmental policy (the "Grenelle of the Environment") and a European deal on a post-Kyoto emissions regime. The climate and energy package was one of France's top priorities in its 2008 EU presidency and the GOF intends to remain in the vanguard of the European Union in pressing the Copenhagen negotiating process toward success. End summary. Background -------------- ¶2. (SBU) Jean-Louis Borloo, born in 1951, is a popular, self-made and now independently wealthy business executive and lawyer whose first public achievement was as mayor to transform a decaying rust-belt town in northern France to a vibrant community. Unusual in France, he had the support of the right, left and center parties. A close confidante of President Sarkozy, who reportedly considered him for Prime Minister, Borloo is a centrist and a leader of the Radical Party. He rallied late in the last campaign to support Sarkozy. Borloo served previously as Labor Minister and as Junior Minister for Towns and Suburbs (the urban renewal equivalent.) He understands some English but prefers to use an interpreter. He has had mixed relations with USG officials and was decidedly hostile to the Bush Administration. In contrast, Borloo had productive meetings with New York Mayor Bloomberg and with Senator Boxer. The Super Ministry and Sustainable Development -------------- - ¶3. (SBU) Nicolas Sarkozy put the environment at the center of his administration from his election in May 2007. One of his first actions was to merge three ministries (Transportation, Ecology and Sustainable Development, and Regional Planning) with the Energy Division of the Ministry of Economy into a single "super ministry" of sustainable development (the Ministry of Ecology, Energy, Sustainable Development, and Regional Planning or MEEDDAT),headed by a Minister of State. Borloo took up this portfolio after a brief tenure as Finance Minister, and a public gaffe about raising taxes that appeared to cost Sarkozy's party in legislative elections. The fusion was a complete reorganization of the components rather than just a merger putting multiple organizations under a single minister. For example, energy and climate change have been combined into a single division. The ministry is largely collocated in new common office space at La Defense while a single Ministerial Cabinet (with four state secretaries in charge of Ecology, Transportation, Regional and Paris Planning, and over 80 experts) formulates policy from the elegant Hotel de Roquelaure on the left bank of the Seine. The Grenelle Process and Results -------------- ¶4. (U) Borloo's first MEEDDAT success was the national-level roundtable on France's environmental policies which met during the summer and fall of 2007 and concluded in October 2007 at Elysee Palace event attended by Nobel laureates Al Gore and Wangari PARIS 00000294 002 OF 005 Maathai. The results were packaged into two legislative bills, labeled "Grenelle I" and "Grenelle II", which spell out a new national sustainable development action plan. The main axes are energy, construction, transportation, urban planning, and agriculture. (Refs A, B and C) ¶5. (U) The first Grenelle priority is to reduce France's energy requirements to improve energy efficiency by 20 percent by 2020, generate over 95 percent of carbon-free electricity, increase renewable energy to 23 percent of consumption, and achieve a reduction of GHG emissions to 25 percent of 1990 levels by 2050 ("factor four"). By 2012, all new buildings built in France will comply with the low energy consumption standards; and by 2020, buildings are to produce more energy than they use. The GOF plans to stimulate the demand for efficient buildings by increasing household tax credits for energy efficient equipment and renewable energy, removing from the market the highest energy consuming products (e.g. incandescent lights and single-pane windows by 2010), and increasing energy labeling of all electronic appliances. ¶6. (U) The GOF plans to invest massively in the transportation sector by developing urban transportation lines and refurbishing the inland waterway and sea transport systems. The Grenelle set an overall 20 percent emission reduction goal in the transport sector by 2020. For automobiles, the GOF has already implemented a method to reduce emissions to an average 130 grams of CO2/km by 2012 using a bonus-malus system to provide a rebate on new newly purchased vehicles which emit less than 130 grams of CO2/km and an additional tax on those that emit more than 160 grams. ¶7. (SBU) In the agriculture sector, the Grenelle called for a suspension of the cultivation of pest-resistant Mon810, the only genetically modified (GMO) variety approved for planting in the EU, pending the EU's 10 year review of MON810. The Grenelle justified this moratorium by citing the precautionary principle, despite consistent findings by the European authorities that MON810 poses no health or environmental risk. The Grenelle also endorsed a 20 percent increase in land devoted to organic farming by 2020, and additional tax incentives to increase the use of organic food to 20 percent of institutional and school catering by 2012. Use of pesticides known to be dangerous is to be cut by 50 percent within the next ten years. What the Grenelle did not address was nuclear power. It is understood that the Sarkozy Government allowed an extreme anti-GMO recommendation from the Grenelle process in exchange for keeping the nuclear energy issue outside the ambit of the exercise. Subsequently, the anti-GMO stance, which has overwhelming public support, has become a symbol for Sarkozy's platform of protecting citizens. ¶8. (SBU) The Grenelle outcomes were unveiled to parliament in April 2008 and in October the National Assembly overwhelmingly approved the Grenelle I bill which adopted in legislation the broad principles, targets and goals of the Grenelle. In February 2009 the Senate also approved the bill with broad support. The ambitious Grenelle II law incorporates implementation plans and has been delayed, in part by the economic crisis and its impact on the GOF budget. The bill will move forward to parliament in March and will likely be voted on by fall 2009. In a sidelight to the Parliamentary debate in early 2008, Secretary of State for Ecology Nathalie Kosciusko-Morizet publicly criticized Borloo and Jean-Francois Cope, leader of the UMP party in the National Assembly, for their positions on the GMO law, saying that the parliamentary debate on GMOs was a "competition of cowards." Sarkozy demanded a public apology and instructed her to mend fences. Kosciusko-Morizet acquiesced and worked closely and effectively with Borloo during the EU presidency. However, during Sarkozy's cabinet reshuffle earlier this year, she lost out with a transfer to the Prime Minister's office as State Secretary for Technology and the Digital Economy. (Refs D and E) Precautionary Principle -------------- ¶9. (SBU) French policy regarding biotechnology is based on the precautionary principle, which in 2004 was written into the French PARIS 00000294 003 OF 005 constitution as part of the Environmental Charter. At the time, the precautionary principle sparked debate over the prospect that it would hamper research and lead to lawsuits. However, the GOF eventually adopted a watered down version of the principle. The GOF's application of the precautionary principle reflects both widespread support by the French population, tinged with protectionism. The French action to ban planting of MON810 was taken despite the EU and French food safety agencies' scientific determination of its safety. Citing the same principle, France supports the EU Commission's REACH program for chemicals that imposes stronger obligations on foreign firms selling into the European market than on similar European firms. Finally, France is likely to advise the EU to ban the importation and marketing of products of cloned animals and their offspring. MEEDDAT champions the concept of incorporating societal concerns and preferences into the EU's biotech review process. MEEDDAT Minister Borloo himself does not appear to have a strong personal stake in the GMO issue, but neither has he been a champion for science-based policy. The French EU Presidency -------------- ¶10. (U) With an agreed domestic package on environmental policy, Borloo moved to the EU's climate change negotiations, which are intended to prepare Europe for the December 2009 Copenhagen negotiations. To motivate the EU Member States to accept a bold and audacious "climate and energy package," in July 2008 France organized an informal presidency workshop on climate negotiations. Borloo's speech pointed out the high stakes when he said, "The European Union, if it is to affirm its driving role in international negotiations, must set a good example. The EU cannot demand global effort in the fight against climate change if it has not managed to share the effort that needs to be made between the Member States." Borloo's goal was to reach an agreement on the EU climate package before UN negotiations in Poznan. To bolster the ranks of its negotiators, Borloo hired Peter Carl, a Dane who had served as the Director General of the EU's Environmental DG, to work the EU member countries on behalf of Borloo's goal of a strong package. In the end, Borloo had to make some compromises with Poland on coal-fired electric power plants, with Germany on automobile industry, and with Italy on heavy industry. Environmentalists complained bitterly that the compromises threatened the EU's ability to reduce GHG emissions by 20 percent below 1990 by 2020. But Borloo decided that the EU's "climate and energy package" was sufficient to give the EU credibility in the negotiations at Copenhagen. Borloo's Washington Agenda -------------- ¶11. (SBU) MEEDDAT officials have told us that Borloo's top three items in Washington are: global climate change, Copenhagen negotiations strategies, and methods for reducing GHG emissions; nuclear power; and transportation, including expanding the high speed rail network in the U.S. Climate Change -------------- ¶12. (U) As Borloo's trip at the outset of the Administration makes clear, the French want to be the first to engage the U.S. on climate change negotiating strategy for Copenhagen. Some French officials are concerned that if the USG does not define a strategy before the EU decides on its strategy, the EU and American strategies might be at odds in Copenhagen. They believe that a joint US-EU effort is needed to bring the major developing country emitters into some legal framework. Despite the economic crisis, Borloo still believes he can sell the Sarkozy plan to even reluctant countries at Copenhagen, especially if he can bring the U.S. on board at an early date. (Ref F) Comparability and Cap and Trade -------------- PARIS 00000294 004 OF 005 ¶13. (SBU) French policy is to urge the U.S. to adopt an ambitious EU-compatible "cap and trade" mechanism to push America's GHG emissions below 1990 levels by 2020, falling into line with Sarkozy's EU eco-timetable. A key French point is the need for compatibility of any new American cap and trade system with the existing EU Emission Trading Scheme (ETS). The French believe that a common US-EU cap and trade system would then become the de facto standard for other OECD member countries. The "comparability of effort" question is important because the EU package includes the principle of carbon import duties to prevent "carbon leakage" from countries with insufficient effort to reduce GHG. Senior French officials, while hoping for an ambitious U.S. GHG reduction target, hint that a less ambitious goal, if written into U.S. law, could be acceptable as a "comparable effort" because it starts the U.S. down the GHG emission reduction road. In these officials' view, the direction and degree of commitment of U.S. GHG policy are generally more important than a numerically equivalent reduction. Carbon Capture and Storage (CCS -------------- ¶14. (U) The French see CCS as a means of persuading fossil-fuel dependent countries such as Poland to reduce their net carbon emissions. Because France itself depends on nuclear and hydro for about 90 percent of its electricity, France is mainly interested in CCS for carbon intensive industries such as cement manufacturing and steel smelting. Major Economies Meeting (MEM) Process -------------- ¶15. (U) The French find the MEM process valuable, and hosted the third MEM meeting in Paris last year. Sarkozy has stressed the need for both developed and developing countries to take responsibility, even if the responsibility is differentiated. The French may encourage the Administration to continue the same process to facilitate consensus during the climate negotiations. Alternative Energies -------------- ¶16. (U) The French made an abrupt shift last year in their view of renewable energy sources away from biofuel, and to a lesser extent away from wind, in favor of solar. Previously, the French goal was that biofuels should be 7 percent of transportation fuel by 2010, and should be 10 percent by 2015. A MEEDDAT-sponsored think-tank, the Agency for the Environment and Energy Management (ADEME) is conducting a study of the future role of biofuels, focusing on future prospects for second generation biofuels that would not compete with food crops. French policy awaits the results, which are scheduled for summer 2009. Borloo announced, last year, a package of fifty measures to boost renewables in France's general energy consumption mix to 23 percent. The initiative will accelerate research and promote projects in bioenergy, hydraulic, wind, geothermal, solar, and marine energies and develop industrial capacity, especially for solar power. Solar is the big scheme. France plans to reach 5,400 MW of photovoltaic power by 2020. France will create a new feed-in-tariff electricity production incentive (Euro 0.46/kWh) for large roofed buildings. The GOF plan to increase installed wind capacity from 2,500 MW in 2007 to 25,000 MW in 2020, of which 6000 MW will be from off-shore wind farms. (Ref G) Aviation and Shipping -------------- ¶17. (SBU) The French think that the Kyoto Protocol was mistaken when it acknowledged the roles of the International Civil Aviation Organization (ICAO) and the International Maritime Organization (IMO) in climate change and instructed Annex I parties to work through them to tackle this issue. Concerned that the ICAO and IMO PARIS 00000294 005 OF 005 are moving too slowly, the European Commission has proposed setting a deadline for the ICAO and IMO of end of the year 2010, or else bringing this issue entirely into the UNFCCC framework. Public Transportation -------------- ¶18. (SBU) The French are justly proud of their high speed TGV railroad network. French policy is to promote the export of the TGV. Longstanding efforts to introduce TGV projects in the U.S in the Northeast Corridor, California and Texas are perennial subjects for the French equipment producers and operators. Nuclear Power -------------- ¶19. (SBU) Sarkozy is committed to the modernization of French nuclear energy industry and know-how, while optimizing security and nuclear waste handling. The GOF supports the third generation European Pressurized Reactor (EPR) built by state owned AREVA. The first EPR is currently under construction in Finland, with the second in France's Normandy region. AREVA is France's National champion for advanced civilian nuclear power, and already has a substantial presence in the United States. AREVA is a constructing a mixed oxide civil nuclear fuel rod plant at the Savannah River Site, South Carolina. However, AREVA has encountered problems in obtaining DOE security clearances for French technicians. France's national power company, EDF has obtained Federal Energy Regulatory Commission (FERC) approval to purchase 50 percent of Constellation Energy of the US, and plans to build at least two EPR reactors on Constellation sites. U.S.-France Research Cooperation -------------- ¶21. (U) The French welcomed U.S. participation in the ITER (the International Thermonuclear Experimental Reactor) Project in Cadarache, about 50 miles northwest of Marseille, France. The GOF, which provides strong financial support, is well aware that the U.S. Congress has slashed funding over the past several years, with implications for the future of the project. The French have asked about the likelihood of the current Congress restoring funding. The French are strong supporters of the Global Nuclear Energy Partnership (GNEP),and last October Minister Borloo spent a considerable amount of time at the GNEP ministerial in Paris. MEEDDAT works closely with DOE on the fourth generation nuclear power project (GEN 4). In October, the French signed an agreement to cooperate with DOE on exchanging classified information on the protection of nuclear material, but so far have not responded to DOE efforts to move to the implementation phase. Comment -------------- ¶22. (SBU) Jean-Louis Borloo can be unpredictable and at times difficult, but his goal on this trip is to access the prospects for a Franco-American partnership in global climate change negotiations. The French are convinced that Europe and the United States have a strong common interest and must work in tandem to bring the major emerging countries into a consensus. France is, and will continue to be, a leader in the EU on climate change policy and the GOF is more inclined to think and act boldly than most European governments. While the intellectual side of the French body politic can be a source of frustration, it has led Europe's thinking over the past several centuries. PEKALA