DEAR MR. CHAIRMAN: Following the September 17, 1996 hearing at which Under Secretary Timothy Wirth testified, additional questions were submitted for the record. Please find enclosed the responses to those questions.

If we can be of further assistance to you, please do not hesitate to contact us.
Sincerely,

[Enclosures.]

BARBARA LARKIN,
Assistant Secretary.

RESPONSES TO QUESTIONS FROM SENATOR MURKOWSKI

Question 1. Your written testimony of September 17, 1996 states: "While the Berlin agreement specifies that there will be no new commitments for developing country Parties, it calls for advancing the implementation of the existing treaty commitments agreed to by developing countries and allows for negotiations on new commitments to begin as soon as work under the Berlin agreement is complete. Under the existing treaty, developing countries are required to adopt policies and measures to reduce greenhouse gas emissions. We are working now to develop specific proposals for advancing implementation of these existing commitments by the developing countries."

(a) Please identify the specific language of any provision in the United Nations Framework Convention on Climate Change (UNFCCC), together with citation to the article and paragraph in which such language is found, that "requires" developing countries to adopt policies and measures to "reduce" their greenhouse gas emissions. (i) Isn't it true that, during negotiation of the UNFCCC, the developing nations refused to agree to language that committed them to "limit" or even to "limit the growth" of their greenhouse gas emissions, much less "reduce" those emissions?

(ii) If your answer to Question (i) is not an unqualified "yes," what accounts for the fact that, although Article 4.2(a) of the UNFCCC committed developed (Annex I) countries to adopt policies and take corresponding measures on the mitigation of climate change "by limiting" greenhouse gas emissions, Article 4.1(b), which is applicable to developed and developing countries, referred merely to measures to mitigate climate change "by addressing" greenhouse gas emissions?

Answer. The Convention's Article 4.1 provides that all Parties must formulate, implement, publish and regularly update national programs containing measures to mitigate climate change by addressing anthropogenic emissions by sources and removals by sinks of all greenhouse gases not controlled by the Montreal Protocol. We believe that this is a real commitment, and one that applies to developing countries as well as to developed countries.

The question, however, suggests a nomenclature with respect to terms like "reduce", "limit", "limit the growth", and "address" that is more rigorous than their usage in the Climate Convention justifies. In brief, the Intergovernmental Panel on Climate Change (IPCC) has indicated that global greenhouse gas emissions would

need to be reduced some 60 percent to stabilize atmospheric concentrations at today's levels. Such an immediate reduction is, of course, economically impossible with existing technology. On the other hand, the Convention's ultimate objective (contained in Article 2) is to stabilize atmospheric greenhouse gas concentrations at a level that would prevent dangerous human interference with the climate system.

Attaining the Convention's ultimate objective will require concerted, long-term efforts by all countries of the world. It will also hinge on the development and diffusion of new technologies, with enormous potential for U.S. business. In view of their greater historic and current greenhouse gas emissions as well as their greater current capacity to respond, the Convention looks to developed country Parties to take the lead in the global mitigation effort. At the same time, it is clear that we will not achieve the Convention's objective or allay the threat of global climate change without action by developing countries as well. The United States has consistently and repeatedly emphasized this point in the negotiations and will continue to do so. Question (b). Does the provision in the Berlin Mandate concerning "no new commitments" for developing countries mean that a protocol or another legal instrument resulting from the negotiations in the Ad Hoc Group on the Berlin Mandate (AGBM) will not contain any provisions that obligate nations such as the Republic of Korea, Taiwan, Singapore, Malaysia, Indonesia, Mexico, Brazil, Argentina, and South Africa to "limit" or to "reduce" their current or future greenhouse gas emissions? Will any of the named nations be added to Annex I?

Answer. We anticipate that the new legal instrument will contain provisions that reaffirm the commitments in Article 4.1 and continue to advance the implementation of those commitments, as called for in the Berlin Mandate.

The specific countries listed in the question are among the most advanced of the Parties to the Convention that are not listed in Annex I. Two have already joined the Organization for Economic Cooperation and Development (OECD). In the negotiations that led to the current Convention, membership in the OECD was widely seen as a key criterion of developed country status.

While the Convention anticipates that the status of countries will evolve over time (e.g., Article 4.2(f)), it established no agreed thresholds or process through_which such changes can be recognized. Consequently, this remains a matter for further consideration as negotiations progress toward a new legal instrument.

Question (c). Please identify the specific language in the Berlin Mandate that "allows for negotiations on new commitments [by developing nations] to begin as soon as work under the Berlin agreement is complete." Isn't it more accurate to say that the Berlin Mandate is silent on that issue?

Answer. The Berlin Mandate recognizes that Article 4.2(a) and (b) of the Convention, which deal exclusively with the commitments of developed country Parties, are inadequate. Accordingly, the Parties-all Parties agreed to begin a process to take appropriate action for the period beyond 2000. This process will include efforts to strengthen the commitments of developed country Parties in Article 4.2(a) and (b). It will also include efforts to reaffirm existing commitments in Article 4.1-commitments which apply to all Parties, including developing country Parties-and continue to advance the implementation of these commitments. The Berlin Mandate envisions that this process will culminate at the Third Conference of the Parties, now scheduled for December 1997 in Kyoto, Japan, in the adoption of a protocol or other legal instrument.

In other words, the Berlin Mandate pertains to next steps under the Convention that the Parties envisage taking in 1997. It is clear that those steps will be only a milestone along a much longer path toward meeting the Convention's ultimate objective.

In this regard, Article 7(e) requires the Conference of the Parties to assess the implementation of the Convention, the overall effects of the measures taken, and the extent to which progress toward the objective of the Convention is being achieved. Article 7(a) requires that the Conference of the Parties periodically examine the obligations of the Parties and the institutional arrangements under the Convention, in light of the objective of the Convention, the experience gained in its implementation and the evolution of scientific and technological knowledge. And Article 7(2) authorizes the Conference of the Parties to make the decisions necessary to promote the effective implementation of the Convention. Taken together, these provisions of the current Convention ensure that negotiations on new commitments by developing country Parties can begin as soon as the current round of negotiations under the Berlin Mandate is completed.

Question (c)(i). Will the U.S. delegation insist on a provision in the protocol or another legal instrument, which is to be negotiated in the AGBM, or a decision of the Conference of the Parties (COP) at its third session (COP-3), that obligates all Parties, including the non-Annex I Parties, to begin negotiations of new commitments

by non-Annex I Parties to limit or to reduce their greenhouse gas emissions? If not, please explain the Administration's reason.

Answer. As noted previously, the Berlin Mandate pertains to next steps under the Convention that the Parties envisage taking in 1997. It is clear that those steps will be only a milestone along a much longer path toward meeting the Convention's ultimate objective.

Specifically in response to this question, we have as yet reached no decision with regard to follow-on negotiations. Much will depend on the specific provisions of a new legal instrument itself, as well as on the progress of the Parties in implementing their current commitments and advancing the implementation of those commitments. As always, we are immovable in our belief that developing countries must play a role in present and future efforts.

Question (c)(ii). If the U.S. delegation will seek such a provision or decision, will the U.S. proposal specify that such negotiations should "begin without delay and be conducted as a matter of urgency," as was stated in the Berlin Mandate with regard to new commitments for developed nations? Will the U.S. proposal state the desired ending date for such negotiations, such as the fourth session of the COP? If your answer to either question is not an unequivocal “yes,” please explain the Administration's reason.

Answer. Again, we have as yet reached no decision with regard to this issue. The reasons cited above in response to question 1(c)(i) are relevant here as well.

Question (d). Please state in specific terms every proposal already made by the U.S. delegation during the negotiations pursuant to the Berlin Mandate that would advance the implementation of the current commitments of developing countries under Article 4.1 of the UNFCCC.

(i) Which of the U.S. proposals and which proposals made by other nations, concerning advancing the implementation of those current commitments of developing nations, has been accepted by the AGBM?

(ii) Given that developing countries' greenhouse gas emissions are projected to grow very substantially, why hasn't the U.S. delegation until now made proposals, concerning advancing the implementation of those commitments of developing nations, in addition to those (if any) it already has made?

(iii) Bearing in mind the statement in your written testimony that "we will work closely with the Congress," please identify the "specific proposals for advancing implementation of these existing commitments by the developing countries" on which you say "[we are working now to develop." Please be as specific as your work to date allows. For example, if you have not developed the details of your proposals, please identify the essential points or thrust of each proposal on which the Administration now is working.

(iv) Which of the proposals identified in your answer to Question (iii) will be presented by the U.S. delegation to the December 1996 session of the AGBM? If not all of them, please explain the Administration's reasoning.

(v) Will it be the intention of the U.S. delegation that the proposals identified in your answer to Question (iii), if agreed to by the COP, would become part of the protocol or another legal instrument that emerges from the COP? If not, please explain.

(vi) Bearing in mind the statement in the Berlin Mandate that specifically links advancement of the implementation of existing commitments of developing countries to Articles 4.3, 4.5, and 4.7 of the UNFCCC, please state as to each of the proposals identified in your answers to Questions (i) and (iii) the range of the amount of financial resources that you believe would or might be necessary for the United States to contribute in order to assure that the developing countries actually will take the actions contemplated by those proposals. Although the exact amount of required U.S. financial contributions cannot be known at this time, the committee desires your best estimate of what the range would or might be.

Answer. A number of the specific points raised in this series of questions are addressed in the answers to previous questions. The Ad Hoc Group on the Berlin Mandate (AGBM), in which negotiations on a new legal instrument are taking place, met in August 1995, in October 1995 and in March 1996, each time for one week. During the course of those meetings, the U.S. delegation made three separate interventions (public statements) concerning U.S. views on the issue of reaffirming and continuing to advance the implementation of Article 4.1 commitments (copies attached). At the July 1996 Conference of the Parties, the AGBM did not take up this issue due to the compressed schedule (to make room for the ministerial segment of the Conference) and the press of other business (three specific roundtables and the need to develop a report to the Conference of the Parties on progress in the negotiations). Early in the AGBM discussions, the United States strongly advocated that the Parties focus their initial efforts on analysis and assessment of the issues, rather

than begin more formal negotiations of specific text. This approach had strong support from key private sector groups in the United States. Moreover, the U.S. approach won broad endorsement within the AGBM. Consequently, the AGBM has not yet reached a stage in which Parties, including the United States, have tabled a broad array of specific proposals, in which the AGBM has considered such proposals or in which the AGBM has agreed to adopt certain ones and reject others. Thus, neither the U.S. delegation nor the AGBM have yet considered the precise provisions that would be included in a new legal instrument or proposed for decision by the Conference of the Parties. Moreover, in the absence to date of such proposals and agreement on them, it is not possible to project which might require the provision of financial resources and what the U.S. contribution might be.

Recognizing that, following the July Conference of the Parties, the AGBM's efforts will now begin to shift toward more formal negotiations, including the tabling and negotiation of text, the Administration is in the process of preparing for the AGBM's Fifth Session, which will take place in Geneva from December 9-13, 1996. Toward that end, the United States recently submitted a paper (copy attached) to the Convention's secretariat setting forth U.S. views on "Elements of a New Legal Instrument." The paper contains a number of suggestions of ways that the Parties can 'continue to advance the implementation of Article 4.1 commitments.' We intend, as we continue to prepare for the AGBM's December session, to consult with Congress, with representatives of the U.S. private sector and environmental community, and other interested groups concerning the ideas contained in the paper and our further thinking beyond that. In addition, we will continue to solicit the ideas of others in this regard, both in Congress and among U.S. constituencies, and to give their suggestions the closest consideration as we develop specific U.S. proposals.

Question 2. Your July 17, 1996 statement in behalf of the U.S. delegation to the second session of the Conference of the Parties (COP-2) stated: "the United States recommends that future negotiations focus on an agreement that sets a realistic, verifiable and binding medium-term emissions target." At COP-2, the U.S. delegation enthusiastically endorsed the so-called "Ministerial Declaration," in which those nations supporting that 'document "[i]nstruct their representatives to accelerate negotiations on the text of a legally-binding protocol or another legal instrument" containing "commitments for Annex I Parties regarding quantified legally-binding objectives for emission limitations and significant overall reductions within specified timeframes, such as 2005, 2010, 2020," with respect to greenhouse gas emissions. (a) Is it the position of the Administration that the protocol or another legal instrument which emerges from the AGBM negotiations should impose a legally binding ceiling or "cap" on U.S. (and other Annex I Parties') emissions of greenhouse gases not controlled by the Montreal Protocol? Please note that the foregoing question presupposes either a stated ceiling or "cap," expressed, for example, in tons or other units of emissions, or one determinable by reference to provisions of the protocol or another legal instrument.

Answer. It is the position of the United States that the current Convention structure has not achieved the results that were anticipated, that few nations in either the developed or developing world have been fully successful in meeting their commitments under Articles 4.1 and 4.2 of the Convention, and that we have to do better. At the Second Conference of the Parties in July of this year, we therefore recommended that future negotiations focus on an agreement that sets a realistic and binding medium-term emissions target, to be met through maximum flexibility in the selection of implementation measures, including the use of reliable activities implemented jointly, and trading mechanisms around the world. In addition, we viewed it as necessary to continue working toward a longer-term concentration goal (e.g. for the next 50-100 years), as set out in the Convention's objective, recognizing that scientific understanding and technology will improve over time.

Our analysis and assessment concerning the optimal level and structure of a binding medium-term emissions target is continuing.

Question (a)(i). If your answer to Question (a) is not an unqualified "yes," are you changing the position that you stated at a meeting with representatives of U.S. environmental and industry organizations on the morning of July 17, 1996 in Geneva, when you agreed that the U.S. position would require a "cap" on the greenhouse gas emissions of the United States?

Answer. As stated in the response to question 2(a) above, we have as yet reached no further decisions in our analysis and assessment.

Question (a)(ii). If your answer to Question (a) is not an unqualified "yes," please explain what would be "traded" in the "trading mechanism" referred to in your written testimony. If there is no legally binding emissions "cap," why would any Annex I nation (or emissions-generating entity) be motivated to acquire by means of a "trading mechanism" whatever is "traded," e.g., "credits (or something similar)?

Answer. Emission "allowances" or emission "credits" might be traded in the trading mechanism referred to the testimony I presented on behalf of the Administration on September 17, 1996. A Party (or emissions-generating entity) would be motivated to acquire by means of a trading mechanism an "allowance" or "credit" that could be acquired more cost-effectively through trading than through taking equivalent action to produce the same environmental benefit.

Question (a)(iii). If your answer to Question (a) is not an unqualified "yes," please identify all other types of commitments by Annex I Parties, concerning quantified emissions limitations or reductions, that could result from the current AGBM negotiations and still be consistent with the language quoted above from your July 17 statement and the so-called "Ministerial Declaration."

Answer. As noted in the response above to question 2(a)(ii), either emission “allowances" or emission "credits" or both could result. Either or both would be consistent with the language of the documents mentioned.

Question (a)(iv). During the negotiation of the so-called "Ministerial Declaration" (up to and including the meeting of COP-2 at which the draft was presented), which of the Annex I nations favored, and which resisted or expressed skepticism about, inclusion of the words "legally-binding" in the phrase "quantified legally-binding objectives for emission limitations and significant overall reductions within specified timeframes"? Is it true that, during the negotiations, when one or more other nations resisted or expressed skepticism concerning the words "legally binding," you or other U.S. representatives insisted on inclusion of those words? Did the U.S. representative inform other nations that its demand for the phrase "legally binding" was "nonnegotiable" (or words to that effect)?

Answer. Australia, New Zealand and Russia expressed concerns about the words "legally-binding." The United States proposed and supported the inclusion of these words, and U.S. representatives made it very clear in the course of the negotiations over the Geneva Declaration that the United States supports making quantified greenhouse gas emissions limitation and reduction objectives legally-binding.

Question (b). At the Committee's hearing on September 17, there was inconclusive explanation by you of the meaning of the phrase "legally binding." Two possible interpretations of the phrase seem to be possible:

First: "Legally binding" only is intended to mean "unequivocal," so as to distinguish the quality of the commitment from what your testimony called “non-binding

aims."

Second: "Legally binding" also is intended to mean that a tribunal would be granted authority to receive, hear, and decide complaints, allegations, or questions concerning whether a Party has violated its commitment concerning limitation or reduction of its emissions.

(i) Which of the foregoing understandings of "legally binding" reflects the position of the Administration? If either or both understandings do not reflect the position of the Administration, please explain fully why they do not.

(ii) Does the Administration have any additional or alternative understandings of what is meant by "legally binding?" If so, please state such understandings.

Answer. In using the term "legally-binding," we sought to convey the ordinary meaning of legally-binding in the treaty context, namely, the obligation is binding under international law.

Support by the United States of legally-binding objectives for emissions limitations and reductions in a new protocol or amendment does not necessarily entail support for dispute settlement mechanisms such as arbitration. Review mechanisms will be considered in the course of negotiations.

Question (c). In your written testimony, you state the Administration's view that "continued use of non-binding targets that are not met would make a mockery of the treaty process." A similar thought was expressed in the current draft Technical Paper prepared under the auspices of IPCC Working Group II, entitled "Policies and Measures for Mitigating Climate Change." It states: "For a trading scheme to be effective in controlling emissions, it is clear that there must be a reasonable probability of detecting and penalizing those responsible for unauthorized emissions. This however, does not distinguish a tradable quota system from any other international agreement on emission reductions."

(i) If a protocol or another legal instrument contains commitments for quantified legally-binding objectives for emission limitations and significant overall reductions within specified timeframes, do you agree that significant violations of such commitments also would "make a mockery of the treaty process" and that it would be in the interests of the United States that the protocol or another legal instrument also should contain realistic provisions for detecting unauthorized emissions by other Parties (as well as of the United States)? If your answer is not an unqualified "yes" to both parts of this question, please explain your answer fully.