EU COUNCIL FAILS TO AGREE ON CLIMATE FINANCING

UNCLAS USEU BRUSSELS 001477

SENSITIVE
SIPDIS

E.O. 12958: N/A
TAGS: ECON EIND ENRG EWWT EUN KGHG SENV TRGY
SUBJECT: 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 ven the strong positions h,
particularly the East Swedish Presidency is@d with the results but n publicly.
The Easterkely to claim
victory, a HQials believe agreement is likely, and USEU Qeement before
Copenhageental political failure b itself as the global QEnd
comment.

MURRAY