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PREPARED STATEMENT OF ROBERT A. REINSTEIN Thank you for the opportunity to review with you the results of the second session of the Intergovernmental Negotiating Committee (INC) for a Framework Convention on Climate Change (FCCC) and our views on the issues raised during that meeting.

OVERVIEW

The second INC negotiating session took place in Geneva, June 19-28 and was attended by 127 delegations, up from 101 at the first session which was held in Chantilly, Virginia. We were pleased that significantly more delegations from Africa and Asia participated, increasing the number of developing countries represented from 65 to 94. Increased funding for LDC travel also ensured the participation of more technically prepared representatives from capitals. These delegates were familiar with the issues and prepared to engage on them substantively rather than procedurally.

Getting down to work on substantive issues bred an atmosphere of cooperation in which most countries sought to identify areas of agreement and avoid confrontation. Relations among key delegations were open and constructive. EC countries diminished their insistence on CO2 targets and timetables, and several important developing countries tempered their rhetoric. Notwithstanding large differences on the issues, many countries in both Working Groups made clear and useful proposals, indicating a widespread desire to advance the negotiating process.

ELECTION OF WORKING GROUP LEADERSHIP

Before getting down to substantive issues at the second session, the INC first elected leaders for the two working groups established in the organizational "terms of reference developed at the first session in Chantilly. When it became clear that no country competing for a chairmanship would step aside for another, the INC decided to have co-chairs for each group. Mexico and Japan were elected as co-chairs of Working Group I on Commitments, with Mauritania acting as Vice Chair. Canada and Vanuatu were elected as.co-chairs of Working Group II on mechanisms, with Poland acting as Vice Chair. This arrangement creates an appropriate balance between industrialized and developing country interests with OECD countries serving as two of the four working group co-chairs.

The two working groups met simultaneously during the last week of the session, with only brief time out for plenary meetings on the work of the intergovernmental Panel on Climate Change (IPCC) and the need for additional financing for the INC Secretariat.

WORKING GROUP I (COMMITMENTS)

In Working Group I discussion began with a number of developing countries call, ing for an agreement on principles (including terms of art such as “responsibility": and “equity") to guide the negotiations. The U.S. and many other industrialized countries questioned the utility of this approach since it was clearly an effort to prejudice subsequent discussion. We favored going straight to the issue and discussing what kinds of concrete actions might constitute appropriate commitments.

The co-chairs agreed to compile a list of all the principles that had been discussed and distribute them for consideration in capitals. We have not yet received this document from the Secretariat, but we understand it will contain about forty-eight principles representing the views of both industrialized and developing countries. Since conventions do not normally contain articles on principles, and since it will be impossible to reconcile such diverse points of view in this context, we expect that the question of principles may eventually be addressed indirectly in the preamble of the convention.

The U.S. prepared and submitted the following list of principles which we think should guide deliberations. In our view, the Framework Convention on Climate Change should:

1) be global, acknowledging that climate change is a common concern of the international community and that all nations need to participate in any international response, in accordance with the means at their disposal and their capabilities.

2) respect national autonomy in accordance with Principle 21 of the Stockholm Declaration, recognizing that nations have different social, economic and other circumstances, including different sets of net greenhouse gas emissions, and need flexibility in the choice of any response options.

3) be comprehensive, recognizing that several greenhouse gases, each with different impacts on the environment, arise from numerous human activities and natural processes worldwide; and that strategies to understand and address climate change will be most environmentally effective and economical if they encompass all the greenhouse gases, their sources and sinks.

4) be flexible, recognizing that strategies to understand and address climate change will be most environmentally effective and most economical if they are based on, and continually reevaluated in light of, relevant scientific, technical, and economic considerations.

5) foster global stewardship recognizing the interdependence of environmental protection and economic growth, and the need to pursue strategies that advance both goals if we are to protect global resources for present and future generations.

6) reflect the long term nature of climate change, building the knowledge, technology and resources needed to achieve sustainable development.

7) spur needed technologies through technology cooperation and appropriate incentives for their development and dissemination, including adequate and effective protection of intellectual property rights.

8) foster international cooperation, enabling cooperative arrangements for understanding and addressing potential climate change in the most effective and efficient manner.

9) recognize and encourage other measures that may be taken, are being taken, or have already been taken at the national, regional and international levels that help address the issue of climate change.

10) encourage nations to use market mechanisms, as appropriate, to foster expanding free trade and to achieve cost-effective results.

11) promote sound science and economics, encouraging appropriate bodies to undertake vigorous research, systematic observation and analysis, including full and open exchange of data among parties and cooperation among all nations.

12) take precautionary approach, reaffirming that lack of full scientific certainty should not be used as a reason for postponing measures that are commensurate with the expected extent and likelihood of any adverse impact of climate change, that reflect the costs and benefits of such measures, and that are directed, as appro priate, toward understanding, limiting, reducing, adapting to or preventing such adverse impacts.

13) foster an open process, allowing appropriate input from nongovernmental organizations, public access to decision-making deliberations where appropriate, and outreach and education of the interested global citizenry.

As Working Group I moved discussion from “principles" to "appropriate commitments”, the developing countries echoed earlier calls for a "differentiated" approach that stresses the historical responsibility of industrialized countries for GHG emissions and therefore their obligation to compensate developing countries for the problem. Several blamed global warming on the “opulent lifestyles” of the West; others denied that developing countries should incur any obligations at all under the convention, especially in light of their overriding need for economic growth. Some advo cated emissions limits for industrialized countries, as a quid pro quo for action on forests. Almost all insisted on "new and additional” financial resources and technology transfer on a "non-commercial and preferential” basis. One or two strongly favored a barebones framework convention, with all details left to possible subsequent protocols.

The U.S. acknowledged the special needs of developing countries and countries with economies in transition, but we supported the concept that all countries should have responsibilities and obligations under the Convention, taking into account their particular circumstances. We also strongly supported the protection of intellectual property rights and technology transfer On a commercial basis. We further stressed the need to define through country studies what technology cooperation, including technology transfer, developing countries need. We pointed out that in market economies governments do not usually own the relevant technology and cannot therefore guarantee its transfer; however, governments can and should facilitate technology transfer and cooperation as much as possible.

The U.S. advocated a partnership among sovereign States to facilitate such cooperation. We recognized that technology transfer to developing countries and to countries with economies in transition on a priority basis must be a central aspect of this cooperative effort. Financial resources to support this effort should, in our view, make maximum use of existing bilateral and multilateral institutions and should be integrated in such a way that support for general development purposes is in no way diminished.

Most industrialized countries except the U.S. favored some form of targets and timetables. Some favored the developing country view that only industrialized countries should be obliged to take action now, whereas the U.S. and others stressed the need for global action in keeping with diverse national circumstances. Many expressed support for a Japanese proposal for each country to set its own target for action under a system of “pledge and review.” This approach was generally supported by the U.K., France and, on the final day, by the EC. Industrialized countries were divided on whether to support calls for "new and additional” financial resources for developing countries or to support a less specific call for "adequate" resources, which several countries suggested should be provided through the World Bank's Global Environmental Facility (GEF).

Appreciating the wide diversity of views on commitments, Working Group I asked its co-chairs to organize for the September session a thematic compilation of views on commitments drawn from country submissions relevant to the Working Group's terms of reference. It is hoped that such a document will facilitate a more focused discussion and the development of draft text on commitments at the next meeting.

WORKING GROUP II (MECHANISMS)

Working Group II contributed in large measure to the feeling of momentum that pervaded the second session. Working with texts provided by the U.K. and India, Working Group II drafted several heavily bracketed provisions on scientific research for the convention.

There was less concrete progress on the question of institutional arrangements, but useful general discussions were held. The U.S. reserved on this question, noting that institutional arrangements will depend in large part upon the commitments to which we agree. That said, we cited the need for dynamic institutions capable of responding to new developments, as well as the need to consider how institutions established under the convention will relate to existing institutions such as the IPCC. Several other countries supported this position.

Australia, New Zealand, and the UK made more detailed proposals: Australia advocated national bodies to implement obligations and a committee of experts to review their progress; New Zealand proposed national monitoring bodies, a 15 member national implementation committee modeled on the Montreal protocol implementation committee, and a Conference of the Parties to receive and evaluate national reports. The UK called only for a Conference of the Parties and a Secretariat. The U.S. and most OECD countries assume that at least these two bodies are needed and are prepared to support such. Many also assume the need for a science advisory body. Support among OECD countries for Japan's “pledge and review” pro posal led several to note the need for some sort of “review” board. Several developing countries argued that compliance mechanisms should not be considered in the convention itself, citing the Montreal protocol as precedent.

The substance of the Working Group II discussion on finances, technology needs and cooperation did not differ significantly from that of Working Group I. Although debate in both groups divided along North-South lines, the tone was decidedly more constructive and less confrontational than at the session in Chantilly.

Addressing the question of financial mechanisms, industrialized countries, including the U.S., generally favored the use of existing instruments such as the Global Environmental Facility (GEF). Developing countries expressed concern about their lack of control over such mechanisms and advocated creation of a new climate fund that would be “democratically" administered. Some cited the ozone fund created under the Montreal Protocol as a precedent. Small island States proposed an insurance plan to indemnify them for investments lost due to climate change; others proposed a scheme whereby developing countries in need of the same technology could solicit bids through an international mechanism which would use the free market to give them the benefit of discount volume buying.

The U.S. recognized the need for techno cooperation, inclu the transfer of technology on a priority basis. We noted that commitments to action and financial resources must be linked and further noted that it will be necessary to quantify any costs associated with action before consideration of resources could be justified. We called for the development of international partnerships based on the principle of equality among sovereign States. We recognized the need for developing countries to define their own technology cooperation needs—perhaps with the assistance of industrialized countries, as appropriate, through country studies. Rather than restrict parties to a single funding mechanism for such studies, we noted the utility of using all existing available mechanisms, including multinational funds, bilateral assistance, and UN programs.

Working Group II asked its co-chairs to prepare a single text on the elements relating to mechanisms under the mandate of the Working Group. The text developed by the co-chairs is to highlight areas of convergent and divergent views.

U.S. INITIATIVE ON TECHNOLOGY COOPERATION

In addition to active participation in the Working Groups, the United States proposed a common approach to technology cooperation which focuses on the need to develop a country study process and an inventory of current technology cooperation resources. The proposal was favorably received in a presentation made to the OECD "common interest" group, and served as the focus of a subsequent meeting with both developed and developing countries.

During the session Poland, Mexico, and Brazil accepted the U.S. offer to cooperate on emissions inventories and/or strategy studies. Sufficient progress was made in persuading people of the utility of country studies that it was informally agreed to hold a meeting on the margins of the IPCC Working Group III meeting in August to inventory current efforts or plans for country studies and resource inventories.

OTHER ISSUES

The Chairman of the Intergovernmental Panel Climate Change (IPCC) Bert Bolin addressed the INC plenary and defined the role of the IPCC as that of translating and interpreting the science of climate change for the INC. The IPCC's mission is technical, not political, he cautioned. He outlined the IPCC's workplan and advocated a precautionary approachi no regrets actions, and the inclusion of economic analysis. Twenty-five countries responded. Some called for the IPCC to develop science annexes, to conduct harmonized emissions inventories and country studies and to expand the participation of developing countries as IPCC Chairs. A few wished to eliminate economic analysis from the workplan because economics is "politics.” However, most countries felt that the IPCC should not ignore the economic implications of climate change and responses to climate change.

Finally, on behalf of the INC Secretariat, the INC Secretary, Michael Zammit Cutajar, made a plea for financial support for the Secretariat. Noting the increased participation of developing countries, he called attention to concerns that there are only enough funds to finance one more negotiating session.- All countries were asked to contribute generously. The U.S. plans to contribute in the next fiscal year, following up on its contribution this year of $50,000 for developing country travel and $1.6 million for the first negotiating session, which we hosted.

To summarize: the second negotiating session was more productive than the first. We have proposals to consider and the prospect of further developing draft negotiating text at the next session, which will be held in Nairobi, September 9-20.

We expect that the spirit of cooperation that reigned at the June session in Geneva will be tested in Nairobi. At the next session, countries will have to start responding to each other's proposals, and the differences are great. However, as we get closer to 1992 the incentive to look for common ground increases. As Chairman Řipert noted, we have begun our climb up the mountain. I have every expectation that we will reach our goal, but the route ahead will require perseverance and patience.

This concludes my review of the second negotiating session for a Framework Convention on Climate Change. I will be happy to answer questions.

PREPARED STATEMENT OF RICHARD N. MOTT Mr. Chairman and Members of the subcommittee: My name is Richard Mott. I am Treaties Officer_with WWF-International and will testify today on behalf of the World Wildlife Fund-US and the WWF family of organizations worldwide. I thank the committee for its invitation to testify.

INTRODUCTION

WWF's concern with the issue of global climate change stems from our mission, which, in short, is to preserve the abundance and diversity of life on earth. Global climate change threatens habitats and species around the world, in plant, animal, and human realms.

I will speak today to the recent history and present outlook for the international negotiations to develop a framework convention on climate change for signature next summer. I will tell you that we at WWF, and our colleagues throughout the environmental community, are concerned about the prospects for a successful agreement in the next eleven months. And I must say that we are troubled by the role that the United States government has taken in obstructing progress toward an effective and meaningful agreement. We urge you in the Senate to become more actively involved, in the hopes that you can help change the current policy of the U.S. government.

During the past four years I have regularly attended, as a nongovernmental observer, intergovernmental negotiations on a range of environmental issues, in particular protection of the global atmosphere. I have closely followed international efforts to address the threat of human-caused climate change, initially in the IPCC, the Intergovernmental Panel on Climate Change, and most recently in the INC, the Intergovernmental Negotiating Committee for a Framework Convention on Climate Change, established last year by the UN General Assembly to prepare a draft Convention for signature next June at the UN Conference on Environment and Development in Brazil. I have also worked closely in these endeavors with my colleagues in other environmental groups through the Climate Action Network.

U.S. ROLE IN INTERNATIONAL NEGOTIATIONS It is a fair assessment, and it is certainly my experience, that the U.S. government has been of two minds in most of these negotiations. On the one hand, there is a clear desire to participate in some international efforts to confront global environmental problems. On the other hand, a persistent view in Washington is that U.S. environmental policy is best formulated in domestic fora, and there has been, as a consequence, some misgiving about entering into intergovernmental negotiations seen as likely to impact U.S. policy.

The U.S. is surely not alone in this sentiment, but it is fair to say that our allies, particularly in Western Europe, are generally showing a greater willingness to de liberate environmental policy in a multilateral context. Nowhere has this been more the case than with climate change. From the outset, there has been a clear conflict between U.S. intentions, on procedure as well as substance, and those of our peers.

Nearly three years ago, when the IPCC was created, the U.S. invested considerable financial and diplomatic resources, as well as its own credibility, in an intergovernmental consultative process on climate change. Its reluctance to act on climate was well known, and for two years the U.S. was accommodated in the IPCC deliberations at every turn of the road. Formation of a legal group within IPCC was first put off, then truncated, and its final document diluted time and again before issuance last year.

EMERGENCE OF THE CO2 CLUB Just prior to the Second World Climate Conference last November, we witnessed a dramatic consensus for action on climate change among the industrialized countries-except for the U.S.-in the form of national commitments to limit CO2. This began in the EC at the end of October, when the 12 member-states reached a common position for EC-wide stabilization of CO2 by the year 2000. The EC agreement was followed directly by similar agreement among the six European Free Trade Association (EFTA: Norway, Sweden, Finland, Austria, Switzerland, and Iceland) countries, and by CO2 stabilization pledges by Japan, Canada, Australia, and New Zealand. By the close of the ministerial portion of the SWCC, virtually every industrialized country in Organization for Economic Cooperation and Development (OECD) had agreed to some measures to control CO2-except the U.S.

At the time it seemed that such broad consensus on the carbon dioxide issue could transform the politics of the formal climate negotiations slated for the following February (at Chantilly)-in short, that the starting point for industrialized countries would become CO2 stabilization by century's end.

This had indeed been the course of prior experience. In some other international environmental negotiations, when agreement on an issue was reached by a bloc of countries meeting outside the formal negotiating process, that agreement acted as a catalyst to complete the main negotiations, often setting the terms for final agree ment. In acid rain negotiations in the UNECE, for example, an "SO2 Club” and a “NO, Club,” both formed outside the formal negotiations, were credited with leading to final agreement on two separate Protocols.

The stabilization policies on CO2 announced last year appeared to be just such a “CO2 Club,” and potentially the key to future global agreement on climate. In this instance, however, it has not worked. The U.S. unwillingness to join with other countries in making such a commitment to limit CO2 emissions has slowed, and thus

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