US CLIMATE ENVOY EXPLAINS COPENHAGEN ACCORD, PART II

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13 january 2010

TRANSCRIPT OF PRESENTATION OF JONATHAN PERSHING AT SCIS [SECOND OF THREE PARTS]

It is not something that you can credibly say that all countries are equal, equal in capacity, equal in ability to move forward on their policies or equal in their ability to know what those policies might yield in the future.

So, there's a bit of a difference. Those countries are required to inscribe actions. We expect, and during the course of the months leading up to Copenhagen, that there will be significant actions reported by the major economies.

We're not really worried about what Chad does. We don't really fundamentally concern ourselves with whether Haiti is going to put a big greenhouse gas emission program in. What we really hope is they can recover from the earthquake.

We are okay with the fact that some of the least developed countries in Central Asia are going to be on a development pathway that may not start with this, but we need to see, from the major players, clarity in the actions they take and in the adequacy of their efforts. And that's in.

We also need to be able to know what they're doing and to be able to review it and to have it be publicly something that these countries will stand behind and that's in as well.

There's a bit of a difference because we're continuing to propose to provide financial assistance and support to countries and, clearly, when you're providing financial support you can ask for things in a slightly different way and you might do things differently as a donor in what you're seeking back from that country by way of information about projects and activities.

But we've wanted information not just on things that were financed, but also things that were undertaken independently by the countries, because let's be clear, we're not going to finance China. That's not what's going to happen.

We're not really going to finance much in India, perhaps aside from some work to help them do some policy design. We're not going to finance anything in Korea.

We're going to finance something that's only at the margins maybe in Mexico on some of their forestry programs, but we want to know what they're doing, because what they're doing will affect our reaction.
What they're doing will implicate our next steps and our ability to move forward and our willingness to move forward and we want to know that and that's in the agreement.

We also note the need for deforestation. There's a paragraph on that. We note the need to move forward with markets. One of the things that's quite central in the way the world has evolved in the design of its greenhouse gas reduction strategies is to send market signals.

That's reflected in this agreement. We wanted to have information on technology. That's reflected in the agreement. Some new institutions to try to further develop the design and the implementation and the widespread penetration of greenhouse gas appropriate technologies. That's in.

And we had a set on finance and there are a number of paragraphs on finance. Let me spend two minutes on finance. It is quite clear that there are opportunity costs from action and from inaction.
The alternative that people often cite is that if I didn't do this I would have all that money that I could spend on something else, on development, on growth, on something else.

But I think that misses the point that climate change is real and that it has consequences that have immediate and direct costs. So, the reality is not if I do nothing I save money.

The reality is if I do nothing I have phenomenal problems. The question really is how do I invest wisely to spend the least money in the most effective way to meet multiple goals, one of which is climate change.
There's a lot of analysis out there. There are no really rigorous and strong numbers and that's a problem that we all face in deciding, well, how much is enough? How much is right? How much do you spend?

What's fairly clear is that in the near term there are several billions of dollars of clear activities that countries could be taking that could be steered in the right direction.

So, the first thing that was done here is to set up a recommendation for a prompt start to financing and that prompt start would be approaching $30 billion of the next three years collectively, 2010, 2011, and 2012.

That's funding that's largely already in place. That's funding that might be steered in a slightly different way. It might be turned a bit more to some of these long-term programs to help design adaptation.
It might be turned to a bit more on low-carbon development strategies that help countries do their planning, but it's mostly in place. It comes through a variety of sources.

It comes through bilateral assistance and it comes through the multilateral banks. It comes from programs that USAID runs, but also programs the Department of Treasury runs.

Much, much smaller shares to come from the Department of Energy or EPA or USDA, but the collective sum is in government coffers. We are putting out that kind of resource now.

The question is how will we move it in a way that's appropriate? But that's not going to do it. There's no one out in the community that I've ever spoken to who thinks you solve that problem with $10 billion.
What you need to really be thinking about is how you change the direction of energy investment. How you change the direction of the new building stock that's going in. How you think about the transport sector, what happens in forests, what happens in agriculture.
How do you steer that? It's not paying for agriculture or paying for new capital stock, new power plants. It's paying for some of the incremental costs or setting up the policies that will help steer that incremental cost in the right direction.

And, therefore, it is not about government finance. It's about government finance as a catalyst for private finance. And how do you steer that and where does that come from?

And this makes explicit that it comes from multiple sources. It is public and private, not just public finance. It comes from all countries, not just the current set of donors.

And it's fairly clear that we will end up with financing not from only those that you'd expect like the rich Scandinavians who have a willingness to pay that's extraordinary. It comes also from others in Europe.

It comes also from Brazil, indicated that would put some financing in. Mexico indicated it would put some financing in. A much more global reach as is appropriate to this kind of a problem.

And it's scaled at a very large level. It scales, for the first time, at a level that begins to be commensurate with the scale of this question.

It has to be ramped up over 10 years and by the year 2020 we have collectively committed, not individually, but collectively as a world, to trying to mobilize $100 billion per year by 2020.

It probably still isn't going to be enough, but it begins to get to the point where it can really make the kinds of differences that are commensurate with the scale of this problem.

Finally, we end up with a set of institutions to try to manage that. None of us are particularly confident that the U.N. in its current context would be a good place to manage its finances. The convention did not succeed in managing the meeting all that well.

I'm not sure that any of us are particularly confident that managing the near-term financing is the place to go. So, we've got a high level panel that's to be thinking about the long term and we are likely to put in the near term the financing resources through the existing institutions that we have.

But managing that and being clear that it is well managed will be the only way that countries around the world and citizens in those countries are going to be willing to provide the kinds of market signals and the kinds of public resources to this end.

And it's contingent. It doesn't happen automatically. It says it will be provided if countries move forward. It says it will be provided if we had these agreements going forward.

It's not an open ended promise that there is money on the table and you do nothing and it comes rolling in. There are actions that have to be taken, actions commensurate with the kind of financing that's being proposed.

Finally, what this ends up doing is talking about what comes next. What if we're not enough? What if we did too much? What if we don't have enough money? What if we don't have enough technology?
How do you proceed? There's a paragraph at the end that talks about a process for review, reviewing both the adequacy and the effort and that would be done by the year 2015.

So we're looking at a five-year process, how are we moving forward? How well are things doing? Let me close with a couple of comments both about the meeting itself and about what comes next.

The meeting itself was at best chaotic. The meeting itself began with thousands of people in and thousands more people who could not get in.
The Danes had organized a meeting in a venue which was big enough for 15,000 and got nearly 45,000 people. I think what's remarkable in some ways about the meeting is that there were not bigger security problems.

I don't think I've ever been to a meeting with 100 heads of state. I've been to a number of the U.N. General Assembly sessions when they open up and 50 or 60 is a big number.

Had 113 or something like that heads of state at this meeting and there were no problems, so in that sense it was very good. But in the sense of people participating, it was difficult.

Many things happened at the same time. There were six simultaneous meetings going on in Copenhagen. There was a meeting of the conference of the parties. There was a meeting of the Kyoto Protocol parties.
There was a meeting of the subsidiary body for scientific and technological advice. There was a meeting of the subsidiary body for implementation, both under the convention.

There was a meeting for next steps under the Kyoto Protocol and there was a meeting for next steps of long-term cooperative arrangements under the parties of the convention.

Really, a chaotic thing and every single one of them had sub groups and sub bodies and they used all the halls and people spilled out into the corridors and we met mostly overnight.

It seems like we didn't sleep for two weeks. It was kind of a funny way
to do anything serious and it showed. By the end of the two weeks we had virtually no agreement.

Thursday of the second week Secretary Clinton arrived and brought with her a commitment to raise the level of financing in this collective way and that really began to turn things around.

And that commitment from the U.S. brought along with it the equivalent levels of efforts primarily from Europe, but also with a buy in from other major donors, fundamentally began to shift the debate.

But even then, by Friday morning we had no agreement. So, I was working with my delegation to draft what we could tell the president he might say when things fell apart and to give that to him when he arrived on Friday morning. That's where we were.

And, I must say, it is a remarkable pleasure to be part of an administration where the guy at the top is as talented and as capable as our president is.

And whatever one might think, he was unbelievable. It was just extraordinary. I have remarked to some people that there's something about being a community organizer which gives you the confidence to walk into a room and sit down at the table and engage people in a conversation.

Except that his table consisted of four players. His table was President Lulu from Brazil and President Singh from India and President Zuma from South Africa and Wen Jiabao who's the premiere of China.
That was the table that he walked into and he created an outcome with that community having first gone through consultations with Gordon Brown from the U.K. and with Sarkozy from France and a set of our allies - with Hatoyama from Japan - a set of our allies.

And he then came into that room and created an outcome that did not exist until he came there. And is that something that we need? Absolutely. What's the consequence of not having had any outcome here? I think it's disastrous.

I think the consequence would be not that it's another process waiting in the wings to step forward, but probably years of delay while nothing would have happened.

It is a critical thing and, in fact, the thing that was created is really quite good. It ends up with much of what we want substantively in a next step and I've articulated that. So what are the next steps?
The next steps consist of a couple of pieces. The first one is that by the 31st of January countries are to inscribe their actions in an appendix to the agreement.

We are actively working now to get countries to do that. We are being joined by others who are also pressing diplomatically for countries to do that. We are fairly optimistic that we'll have quite a large number of countries.

Don't know exactly what they'll say. Everyone is working on it. People are looking to see what we'll say. We're working on that as well, the language of what we'll inscribe.

But countries are working that. A couple or three more weeks and we'll have a good sense of where this is going. That's the very first step.
The next step is to begin to iron out some of the complexities in the process, because this was not in agreement that was adopted as a decision of the parties.

It was, in fact, it adopted by a decision, but the decision was not to agree it, the decision was to take note of it. It's a formal recognition that exists of this agreement, but not an acceptance universally by consensus.

And why not? Because five countries said no. Not 100 countries saying no. Not 50 big countries saying no. Five countries said no and one of the failings of the process is that it currently requires that you have a consensus and a consensus is the absence of stated objection.
And when you have a country wildly waving its flag and where it's entire delegation is shouting uproariously into the room, you cannot argue that there was no stated objection.

Who were they? Bolivia, Venezuela, Nicaragua, Cuba. These are countries that are a part of the ALBA group, a group that sees this process not so much as a solution to climate change, but, in fact, as a mechanism to redistribute global wealth.

And they don't like the fact that this did not do that. It didn't do that and they object to that fact. Well, surprise, surprise, surprise, the rest of the world doesn't want to do it that way.

But they couldn't get an agreement because this group, this narrow group was blocking it. And be clear, because it's not, as many have said, that China blocked the outcome. They did not. They were in the room. They agreed to this.

Or that India blocked the outcome. They did not. It is shaped around their concerns as it is shaped around our concerns, but the block came from others.

And with 185 countries saying yes and five saying no, we were unable, because of the process of demanding consensus, to get to an outcome, so we now have multiple processes.

We have the accord and we have the convention. We have the accord and the convention and we also still have the Kyoto Protocol. And managing those series of next steps is part of what we have to manage over the next year.

And then we have to work on the implementation of the elements in the accord. We have to do information on the finances, both the institutions are, on the technology, on the guidelines for reporting, on the elements of how we deal with forestry.

Those are all urgent tasks that will be taken up and there were decisions that were not adopted because the accord came essentially overnight Friday night and had we had another day we could have resolved those other decisions that give much more flesh to the bones in this accord.

They're not all that far away, but they need some political attention, that will probably happen over this year. That's also part of the next step.

And then, finally, the next step really is what countries do at home. It is impossible to imagine we can succeed on this deal at this particular point in time without domestic action.

And that means for us and that means for others and that means legislatively and through regulations in countries around the world including the United States.

The dynamic now is in many ways it has been returned and the ball is in
the court of the domestic programs and so part of what happens this year is a consideration for the U.S. of how it will move forward.

And for the moment that's a consideration where the focus is in Congress. So let me stop with that. Thank you again very much for the time and I look forward to taking any questions.


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