(SBU) GREENLAND'S CLIMATE-CHANGE DEAL WITH DENMARK

UNCLAS COPENHAGEN 000039

SENSITIVE
SIPDIS

STATE FOR OES/EGC, S/SECC, EUR/ERA, EUR/NB

E.O. 12958: N/A
TAGS: KGHG SENV ECON ENRG GL DA
SUBJECT: (SBU) GREENLAND'S CLIMATE-CHANGE DEAL WITH DENMARK

(U) SENSITIVE BUT UNCLASSIFIED; PROTECT ACCORDINGLY. NOT
FOR INTERNET DISSEMINATION.


1. (SBU) SUMMARY: Greenland (which is is self-governing
within the Kingdom of Denmark) is satisfied with the
climate-change agreement it reached with Denmark during
COP-15. Under that agreement, Greenland is committed to
doing the following by 2020: reducing GHG emissions by five
percent from the 2007 level, excluding hydrocarbon activities
and energy-intensive industries; covering over 60 percent of
civil society's energy needs with hydropower; and developing
hydrocarbon activities and energy-intensive industries in
accordance with international standards and best practices.
A projected Alcoa aluminum smelter will on its own nearly
double Greenland's GHG emissions (679,000 tons in 2007),even
though it is planned to be driven entirely by hydropower.
Greenland will have to negotiate further with Denmark
regarding Greenland's commitment under the Kyoto Protocol,
which it is not on course to meet. END SUMMARY.

GREENLAND'S VIEW
--------------


2. (SBU) Greenland is self-governing within the Kingdom of
Denmark; it is outside the European Union, and had been
seeking to negotiate separate emissions-reduction targets
with Denmark in order to avoid being obliged to meet the
stricter requirements for EU members. Mette Frost of the
Climate and Energy Office of Greenland's Government told
Pol-EconCouns January 14 that Greenland Premier Kuupik Kleist
laid out the following commitments in a letter to the Danish
Minister for Climate and Energy dated November 24, 2009, and
that Denmark agreed to them during COP-15:

- Greenland is committed to reducing emissions of greenhouse
gases (GHG) in civil society for the years 2013-2020 by five
percent from the 2007 level. This excludes hydrocarbon
activities and energy-intensive industries.

- By 2020 Greenland will cover more than 60 percent of its
energy production for civil society with sustainable energy
such as hydro power.

- In 2013-2020, Greenland will develop hydrocarbon activities
and energy-intensive industries in accordance with
international standards and best practices for sustainable
development, including Best Available Techniques (BAT) and
Best Environmental Practices (BEP).


3. (SBU) Frost explained as follows: Greenland is
committed to decreasing its dependence on Denmark's annual
block grant (3.4 billion Danish Kroner, nearly USD 700
million, corresponding to about 30 percent of Greenland's
GDP),through developing its "vast resources of oil and gas
offshore, resources of minerals (zinc, gold, iron ore,
molybdenum, olivine, diamonds, etc.)" and making "use of our
large potentials for hydropower." The five percent GHG
reduction target excludes hydrocarbon activities and
energy-intensive industries because these "are just being
developed" in a country the size of India, with fewer than
60,000 inhabitants widely scattered in small settlements,
each with a stand-alone energy supply. Per capita CO2
emissions are "relatively high" at 11.9 tons annually.
Hydropower already accounts for about 42 percent of energy
production after the recent opening of Greenland's fourth
hydroelectric plant. A proposed Alcoa aluminum smelter would
increase Greenland's CO2 emissions by 650,000 tons due to the
industrial processes in aluminum smelting, even though the
plant would be driven entirely by hydropower. (NOTE: Final
approval for the project is still pending, as Greenland
weighs whether to take an equity stake. END NOTE.) For
comparison, Greenland's total CO2 emissions were 679,000 tons
in 2007. Even so, smelting aluminum in Greenland using clean
hydropower would benefit the global climate, because some
alternative venues are powered by dirty fossil fuels.

4. (U) Kleist described the agreement with Denmark as
"reasonable good" (sic) in a speech he gave January 7 in
Copenhagen, in the presence of the diplomatic corps and
Denmark's Minister for Nordic Cooperation Bertel Haarder.
Kleist said he felt Denmark now understood Greenland's
development needs. He noted that global warming is having
serious impacts in Greenland, placing the livelihoods of
hunters and fishermen under threat. Kleist highlighted that
as of January 1, 2010, Greenland had taken over "the
ownership and control of Greenland's oil and mineral
resources. This summer, there will be two exploratory
drillings for oil off the west coast of Greenland and we
expect more drillings in the coming years." He added that
"this summer, we will actively start to seek international
investors to finance two or more hydroelectric plants. An
expansion of our capacity in clean energy would also be
crucial in the event we decide to develop energy-intensive
industries."

DENMARK'S VIEW
--------------


5. (SBU) Peder Lundquist, Deputy Permanent Secretary in the
Danish Climate Ministry, confirmed to Regional Environment
Officer January 20 that an agreement including the five
percent civil-society reduction target was signed by Premier
Kleist and Danish Climate Minister Lykke Friis during COP-15.
That agreement stated Denmark would not oblige Greenland to
accept further GHG reductions should it sign on to a legally
binding global climate accord. Lundquist said there was
never any question of Denmark obliging Greenland to accept
future emissions restrictions binding on Denmark as an EU
member, since Greenland is not part of the EU. According to
Lundquist, the new agreement does not absolve Greenland of
its binding commitment under the Kyoto Protocol (which
Greenland itself chose to subscribe to) to reduce GHG
emissions by eight percent from 1990 level between 2008 and

2012. Lundquist said Greenland is "way off" reaching that
target. Since that failure has implications for Denmark
under Kyoto, there will need to be further discussion and
agreement on how that issue is to be resolved (most likely,
he thought, by purchasing quota under the clean development
mechanism, which will raise the question of how that quota is
paid for).
FULTON