AUSTRALIA: EMISSIONS BILL BECOMES POTENTIAL

C O N F I D E N T I A L SECTION 01 OF 02 CANBERRA 000088 SENSITIVE NOFORN SIPDIS DEPARTMENT FOR EAP/ANP, EEB/ESC/IEC, OES/EGC E.O. 12958: DECL: 01/29/2020 TAGS: SENV ECON KGHG PREL AS SUBJECT: AUSTRALIA: EMISSIONS BILL BECOMES POTENTIAL LIABILITY Classified By: Classified by: Political-Economic Counselor Edgard Kagan , Reasons 1.4 (b)(d). ¶1. (C/NF) SUMMARY: Climate Change and Water Minister Penny Wong expressed her appreciation for U.S. commitment to addressing climate change, particularly the "extraordinary" U.S. efforts in Copenhagen in an introductory meeting with Ambassador Bleich. Wong stressed the importance of developed countries implementing the Accord. She noted that the GOA will reintroduce its own emissions trading legislation but the timing will depend on "circumstances," referring to the opposition's alternative proposal and shifting voting patterns in Parliament. In Wong's view, China remains the critical player and its hard-line stance in Copenhagen may have been a strategic defeat that will retard progress in other nations, including Australia. Wong's previously confident and aggressive approach on the CPRS bill appeared to have given way to a lukewarm "wait-and-see" approach during the meeting with Ambassador Bleich. Reflecting a change in status from political front-burner issue to potential liability, PM Rudd is likely to take a more careful approach to the CPRS legislation -- prioritizing election-year dynamics and pushing the legislation when and how it proves to be most politically expedient. End Summary. Grateful for U.S. Support -------------- ¶2. (C) During her first meeting with Ambassador Bleich on January 29, Climate Change and Water Minister Penny Wong expressed her appreciation for U.S. support in Copenhagen, saying that "the fact we got anywhere is due to strong U.S. efforts during the negotiations." She further congratulated the U.S. on formally inscribing itself to the Accord. Wong said Copenhagen succeeded in setting conditions to operationalize the Accord in the future, but warned that progress going forward will depend on how seriously these conditions are met. She expressed satisfaction with the provisions for international consultations in the Accord, describing them as necessary to verify outcomes. On China's standing after Copenhagen, Wong agreed with Ambassador Bleich that while the Chinese are perceived to have won this round from a tactical perspective, it is not the case from a strategic point of view. China lost face in some larger respect by appearing to obstruct progress. Still, she felt that it will be up to "our respective leaderships" to overcome Chinese resistance and realize the long-term success of the Accord. Domestic Cap and Trade Legislation -------------- ¶3. (C/NF) Wong said the GOA would reintroduce its Carbon Pollution Reduction Scheme (CPRS),though the timing will depend on the circumstances. In addition to the fact that the GOA must now deal with this legislation in the aftermath of a less-than stellar Copenhagen outcome, it must also promote the CPRS within the context of an election year. Failure to pass the legislation, in and of itself, could be used by the Rudd government to trigger an Qitself, could be used by the Rudd government to trigger an election. U.S. Role -------------- ¶4. (SBU) Wong said the best thing the U.S. can do now for the Climate Change cause is to pass its own domestic legislation, currently in the U.S. Senate. Additionally, U.S. leaders visiting Australia can help promote the cause by expressing their strong support for climate change measures and Australian leadership. ¶5. (C/NF) Comment: Copenhagen failed to meet the CANBERRA 00000088 002 OF 002 expectations of most Australians, given the prominent role the GOA, including the Minister Wong and Prime Minister Rudd, played in it. Minister Wong's characteristically confident and usually aggressive approach on the CPRS bill was muted. Reflecting a change in status from political front-burner issue to potential liability, PM Rudd is likely to take a more careful approach to the CPRS legislation -- prioritizing election-year dynamics (including calibrating reaction to the opposition's proposal) and pushing the legislation when and how it proves to be most politically expedient. BLEICH