Thought you would be interested in Jonathan Lash's report. 

Rosie

 -----Original Message-----
From: 	"Jonathan Lash, President" <jlash@wri.org>@ENRON [mailto:IMCEANOTES-+22Jonathan+20Lash+2C+20President+22+20+3Cjlash+40wri+2Eorg+3E+40ENRON@ENRON.com] 
Sent:	Wednesday, July 25, 2001 11:05 AM
To:	Lay, Kenneth
Subject:	Climate News from Bonn


The climate news from Bonn this week is very  good.  Against the odds, and defying expectations, 178 nations have agreed  to proceed with implementation of the Kyoto Protocol.  The United States  alone refused to participate in this remarkable achievement.  
 
Two weeks ago every environmentalist I know was  gloomy about the prospects for agreement.  Japan, Canada, and Australia had  expressed grave misgivings about going forward without the U.S.  There were  rumblings of doubt from several European nations.  But in Bonn the  imperative of taking a first step to protect the global climate proved strong  enough to persuade negotiators to step back from entrenched positions.   Europe agreed to flexibility in the treatment of "sinks" (forests and  agricultural soils that absorb CO2), and "trading" (the ability of a nation that  falls short of its target to purchase credits from a nation that exceeds its  target).  Japan, Australia, and Canada agreed to join.  With strong  leadership from conference chair Jan Pronk the result is a legally binding  international agreement that achieves a little less than hoped 4 years ago, but  much more than nothing.  If it is all it appears to be it is a profoundly  important commitment to take a first step.
 
There are two great ironies about the impact of  the U.S. withdrawal from the Kyoto Protocol.
 
The first is that the U.S. criticism of the  Protocol, and failure to offer any alternative whatsoever, helped the rest of  the world to reach agreement.  A very senior Japanese official whom I spoke  with expressed frustration and confusion that Japan's urgent efforts to stand by  the U.S. and open the negotiations to alternatives - despite strong popular  support for the Kyoto agreement in Japan - were met with stony silence.   "What do they want," this official asked, "Do they know?" U.S. silence  foreclosed negotiations and pushed Japan and others toward Europe.
 
My colleague Tony LaVina, on temporary detail to  the Philippine delegation in Bonn, reports that U.S. silence meant that there  was no U.S. rhetoric attacking developing countries, and consequently greater  willingness by developing countries to be flexible in their approach to the  Protocol.
 
And resentment of the U.S. position helped to  unify negotiators.  Francois Bayrou, a member of the European Parliament  and French presidential candidate, told me that support for the Kyoto Protocol  and opposition to the U.S. position is one of the most reliable applause lines  in speeches he gives all over Europe.
 
The second irony is that U.S. isolation will  deprive U.S. industries of three things they eagerly sought in any climate  agreement:
 
1. Clear and certain rules that enable companies  to make rational decisions on energy related investments that will last 10, 20,  30 or more years.  It remains unclear when the U.S. will enact policies  to reduce greenhouse gas emissions, or what those policies will  be.
 
2.  The ability to purchase credits from  other countries.  The trading system will be set up under the Protocol  for countries that are participating.
 
3.  The ability to receive credits for  investment in measures that reduce emissions in developing countries through the  "Clean Development Mechanism".  The CDM too, will operate under the  Protocol, which will be designed by and operated for parties.
 
It seems obvious that this will raise the costs  and reduce flexibility for the U.S.  when we decide to make  reductions.  Even the Wall Street Journal editorial page admitted to  harboring "a certain fondness for one part of the Kyoto treaty - emissions  trading."
 
An encouraging development in the U.S.:   Last week I was invited to testify before the Senate Governmental Affairs  Committee on a bill that would require the U.S. to develop a long-term strategy  for reducing greenhouse gas emissions.  The first witness was the  snowy-haired chairman of the Appropriations Committee and former Majority Leader  of the Senate, Robert Byrd, of West Virginia, the author with Senator Stevens of  Alaska of the bill under discussion.  Senator Byrd has been an effective  advocate for his state and its coal industry, and often an opponent of clean air  legislation.  In 1997, with Senator Hagel of Nebraska, he authored a  resolution calling on the U.S. to reject any agreement that failed to impose  mandated emissions reductions on developing countries.  That resolution has  been cited by White House spokespersons as reason for the U.S. to withdraw from  the Kyoto process.
 
Last week Senator Byrd delivered a powerful  statement on the urgency of addressing global climate change, saying "make no  mistake about it, global climate change is a reality."  He said he did not  believe his 1997 resolution "should be used as an excuse for the United States  to abandon its shared responsibility to help find a solution to the global  climate change dilemma."  He expressed optimism that the United States is  "particularly well positioned with the talent, the wisdom, and the drive" to  lead efforts to control global warming.
 
The U.S. has painted itself into a corner with  global consequences.  The White House appears to have miscalculated the  importance of the issue, the seriousness of our allies, and the capacity of U.S.  industry to respond.  I think that in the next three years - with the White  House, or without it - the United States will take action on climate.  That  Wall Street Journal  editorial I mentioned urged the  Administration to propose an emissions cap and trading system.  It would be  a good start...the sooner the better.