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P 050831Z DEC 06
FM AMEMBASSY BERLIN
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RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUCNMEM/EU MEMBER STATES COLLECTIVE
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UNCLAS SECTION 01 OF 05 BERLIN 003422 
 
SIPDIS 
 
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ROSSI 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV ENRG ECON EAIR GM
SUBJECT: ENGAGING GERMANY ON ENERGY AND CLIMATE: CEQ CHAIRMAN?S 
MEETINGS WITH 
GERMAN OFFICIALS AND GERMAN PRIORITIES FOR ITS G-8 AND EU 
PRESIDENCIES 
 
 
¶1. SUMMARY:  White House Council on Environmental Quality Chairman 
James L. 
Connaughton met with senior German officials from the Environment, 
Economic, and 
Foreign Affairs Ministries as well as the Bundestag (parliament) and 
Chancellery 
to discuss environment and energy policy as Germany prepares to take 
over the EU 
and G-8 presidencies in 2007.  The meetings took place following the 
High Level 
Dialogue on Climate, Clean Energy, and Sustainable Development 
October 24-25 in 
Helsinki.  Comments from interlocutors at all agencies indicate 
Germany 
approaches climate change as an integrated policy approach with a 
recognition of 
the economic potential of exporting clean technologies to India and 
China. 
Germany?s goals for the EU and G-8 presidencies will include a focus 
on energy 
efficiency and promoting, clean energy technologies, biodiesel and 
clean coal. 
Interlocutors agreed with Connaughton these are areas where the U.S. 
and Germany 
can and should cooperate.  German officials were eager for follow-on 
discussions 
that would lead to further cooperation.  Officials from the 
Bundestag, Ministry 
of Foreign Affairs, and Chancellery explained that Berlin remains 
committed to 
the Kyoto Protocol, and to the 
post-2012 framework discussion. 
 
¶2. Connaughton used his meetings to make key points on clean coal, 
biodiesel, 
energy efficiency, and international climate change negotiations. 
Connaughton 
also made a presentation on U.S. climate policy at the Friedrich 
Ebert 
Foundation, highlighting U.S. domestic and international policies 
that advance 
the development and deployment of cleaner and more efficient 
technologies that 
reduce greenhouse gas emissions, improve air quality, and lead to 
greater energy 
security.  German public opinion of U.S. environmental policy is 
generally very 
critical and Connaughton did some much-needed public outreach in an 
exclusive 
interview with Die Zeit, a leading national newspaper. END SUMMARY 
 
CLEAN COAL 
 
¶3. On the topic of clean coal, Connaughton shared with his 
interlocutors U.S. 
plans to commercially deploy advanced coal power technology, 
including 
FutureGen, the world?s first integrated sequestration and hydrogen 
production 
research power plant.  He said the federal government will shortly 
announce 
approximately USD 1 billion in tax credits to encourage commercial 
construction 
of advanced clean coal plants.  Connaughton encouraged Germany to 
pursue a 
parallel strategy on a similar scale to that of the U.S. so that 
both countries 
would test different clean coal technology platforms and learn the 
true 
economics of the technology.  He noted China has been reluctant to 
invest so 
heavily in clean coal, but transatlantic cooperation on this issue 
could change 
things.  If we are successful in lowering clean coal?s capital costs 
and 
accelerating commercial deployment, he suggested, we will be in a 
stronger 
position to urge China and other developing countries to adopt the 
technology. 
 
 
BERLIN 00003422  002 OF 005 
 
 
¶4. Officials from all agencies acknowledged the U.S. and Germany, as 
two of 
the largest coal users and the leading innovators of clean coal 
technology, have 
a common interest in promoting clean coal at home and abroad and the 
G-8 could 
provide the forum to do so.  Foreign Ministry Director General for 
Economics and 
Sustainable Development and G-8 Sous Sherpa Peter Ammon said clean 
coal will be 
a ?centerpiece? of the German presidency and recommended forming a 
contact 
group.  Johannes Kindler, Deputy Director General for Industry, 
Energy, and 
Telecommunications at the Chancellery asked Connaughton to convey 
Germany?s 
interest in bilateral cooperation on clean coal to the President. 
Kindler said 
the time is ripe for U.S.-German cooperation on clean coal at the 
government and 
industrial levels and noted GE has expressed interest in cooperating 
with 
Munich-based Siemens.  For its part, he said, German industry is 
eager to 
cooperate with U.S. counterparts. 
 
¶5. Clean coal cooperation was also advanced by Ministry of 
Environment State 
Secretary Matthias Machnig, who said the U.S. and Germany should use 
 
SIPDIS 
the G-8 
sherpa process to explore promoting clean coal in third countries. 
He cautioned 
that there is still serious public concern about the safety of 
underground 
carbon storage which poses a challenge to investment in clean coal 
technology in 
Germany.  Machnig noted a public endorsement of the importance of 
clean coal by 
Chancellor Merkel, an East German and former Environment Minister, 
would send a 
powerful political signal in support of this technology to the 
international 
community.  He suggested that if the German public knew that by 2020 
all new 
power plants would have to be equipped for carbon capture and 
sequestration 
(CCS), innovation would take off.  While acknowledging the G-8 
cannot articulate 
such a specific goal, he said it would be very useful if G-8 leaders 
emphasized 
the importance of speeding up the commercial deployment of clean 
coal 
technology. 
 
¶6. In Connaughton?s meeting with Parliamentary State Secretary Peter 
Hintze 
at the Economic Ministry, Andreas Obersteller, Deputy Director 
General for 
Sustainable Energy, Efficiency, Coal and Mining, explained clean 
coal is part of 
Germany?s graduated process of increasing energy efficiency.  The 
first step is 
making existing traditional power plants and new plants more 
efficient.  He said 
there are already new German power plants (i.e., 2000 MW plants 
currently being 
built by RWE in North Rhine Westphalia) that are utilizing the best 
available 
technology and are more efficient than their predecessors.  Building 
clean coal 
facilities is the next step after achieving greater efficiency in 
traditional 
power plants.  Connaughton pointed out, and Economic Ministry 
interlocutors 
agreed, that Germany?s G-8 presidency would be an opportunity to 
articulate to 
the public the role of clean coal in this process. 
 
¶7. Speaking on behalf of the Bundestag Environment Committee, Deputy 
Chair 
 
BERLIN 00003422  003 OF 005 
 
 
and Left Party member Eva Bulling-Schroeter told Connaughton that 
the Bundestag 
also sees clean coal as an increasingly important part of Germany?s 
approach to 
climate change. 
 
ENERGY EFFICIENCY 
 
¶8. Connaughton suggested Germany use its role as G-8 president to 
shift 
attention to a greater focus on energy efficiency.  He noted energy 
efficiency 
is a good way to engage China on greenhouse gas emission reductions, 
given 
Beijing?s goal of increasing efficiency by 20 percent by 2010. 
Connaughton 
explained that Asia Pacific Partnership (APP) task forces are 
currently 
identifying targets and projects for investment in energy efficiency 
in each 
industrial sector under the APP. 
 
¶9. Interlocutors at the Chancellery and MFA emphasized energy 
efficiency will 
be on Germany?s EU and G-8 presidency agendas.  The Environment 
Ministry?s 
Machnig also stated it would be helpful if the U.S. made clear, in 
the G-8 
context, its strong interest in energy efficiency and suggested 
identifying 
specific areas for cooperation. 
 
¶10. At the Economic Ministry, Obersteller commented that Germany?s 
approach to 
energy efficiency, in contrast to that of the European Commission, 
is market- 
oriented.  As an example he explained Brussels is considering 
mandating 
(currently voluntary) carbon emissions reductions in the automobile 
sector but 
Germany advocates consumer labeling of vehicles so people know how 
much fuel a 
car consumes before they buy it. 
 
BIOFUELS 
 
¶11. Connaughton noted the U.S. is focusing on the development and 
deployment 
of second generation biofuels, including ethanol and biodiesel.  He 
mentioned to 
interlocutors the U.S. has a mandatory target of producing 7.5 
billion gallons 
of biofuel by 2012. The U.S. may produce as much as 12 billion 
gallons, he 
explained, depending on market demand.  On biodiesel, he noted 
German biodiesel 
standards favor rapeseed while U.S. standards favor soybeans and 
emphasized that 
harmonizing standards is essential for the development and global 
interoperability of biofuels and other key new energy 
saving/emissions cutting 
technologies. 
 
¶12. The Chancellery agreed that biofuels is an area ripe for 
U.S.-German 
cooperation in the context of their upcoming EU and G8 presidencies. 
 Kindler 
suggested the U.S. and EU bolster their clean technology sectors by 
working to 
jointly set standards and efficiency criteria.  In comments made 
before MFA 
State Secretary Georg Boomgaarden joined their meeting, Ammon told 
Connaughton 
he wants to see more U.S.-German cooperation on biofuels.  He noted 
German 
companies, such as DaimlerChrysler, are pushing forward on second 
generation 
biofuels and biomass-to-liquid (BTL) development and emphasized the 
need for the 
U.S. and German governments to engage industries in their bilateral 
 
BERLIN 00003422  004 OF 005 
 
 
discussion. 
He also pointed out that biofuels makes sense as a fuel source for 
the U.S. and 
Germany, who both want to put surplus agricultural production 
capacity to good 
use. 
 
INTERNATIONAL PROCESS STILL KEY 
 
¶13. While showing strong interest in cooperating with the U.S. on 
clean coal 
technology, energy efficiency, and biofuels, interlocutors from the 
MFA, 
Ministry of Environment, Chancellery, and Bundestag nonetheless 
expressed 
Germany?s unwavering commitment to international discussions on 
climate change, 
both through the Kyoto Protocol and the discussions on a follow-on 
agreement. 
 
¶14. Connaughton stressed the importance of engaging China and India 
on climate 
protection as part of a broader agenda, including energy security 
and 
environmental quality.  He noted that China and India rank climate 
change lower 
than energy security and air pollution and are not organized around 
the goal of 
reducing greenhouse gas emissions.  Connaughton explained that the 
Asia Pacific 
Partnership was created in part to help promote such a dialogue. 
He said the 
EU made a mistake at Montreal by assuring China and India that they 
would not be 
obligated to make emissions reductions in a post-2012 regime and 
stressed that 
the U.S. will not join an international framework in which 
developing countries 
have no commitments.   Connaughton explained the U.S. supports a 
dialogue among 
all UN members within the UNFCCC but a more focused discussion among 
 
environment, economic, energy, and industry interests of the 15-20 
leading 
emitters of carbon dioxide would be more effective in coming up with 
real 
solutions.  He noted British Prime Minister Tony Blair started this 
kind of 
?leadership dialogue? on climate change at Gleneagles. 
 
¶15. MFA State Secretary Boomgaarden?s first comment in his meeting 
with 
Connaughton was that it is important to have the U.S. ?in the boat? 
in post-2012 
discussions, along with India and China.  Boomgaarden said he is 
optimistic 
clean coal and other technologies can become economically viable. 
He stressed 
the importance of the Kyoto process and the inherent value of 
approaching 
climate at the international level and of having specific goals for 
carbon 
emissions reductions.  Boomgaarden acknowledged U.S. reticence to 
commit to a 
target for absolute carbon emissions reductions, but pointed out 
that the U.S. 
has targets in other areas.  He said on aid to Africa, for example, 
Americans 
are comfortable with setting a number goal. 
 
¶16. Boomgaarden, however, acknowledged the value of a smaller-scale 
discussion 
on climate among key industrialized countries.  He said it was 
useful that UK 
Prime Minister Tony Blair started the G-8 dialogue on climate at 
Gleneagles and 
noted the G-8 process is an easier way to engage ministries of 
Economics/Energy 
than within the UNFCC.  He concluded by reiterating the need for a 
minimum 
 
BERLIN 00003422  005 OF 005 
 
 
binding goal such as preventing a global temperature rise of more 
than 2 degrees 
Celsius above pre-industrial levels.  There are different ways to 
achieve such a 
goal, he said, but stressed ?the discussion doesn?t make sense 
without the 
context of binding goals.?  Ammon qualified Boomgaarden?s remarks by 
commenting 
it doesn?t make sense for the U.S. and Germany to have a ?religious 
war? about 
how to approach climate when there is so much the two countries have 
in common, 
such as interest in engaging China, which will soon be the biggest 
emitter of 
carbon dioxide. 
 
¶17. Members of the Bundestag from all parties similarly advocated 
strong 
support of the Kyoto process.  Dr. Axel Berg, Social Democrat member 
of the 
Economic Committee, said that while he is ?no great fan? of Kyoto, 
he does not 
see Kyoto commitments and support for technological innovation as 
mutually 
exclusive.  Both the U.S. and Germany want to sell clean coal 
technology to 
China, he continued, and Germany wants to use the Clean Development 
Mechanism 
under the Kyoto Protocol as a mechanism to do so.  Michael Kauch, 
Left Party 
member of the Environment Committee, supported Berg?s comments but 
noted that 
the German public?s impression of U.S. environmental policy is 
tainted by the 
U.S. refusal to discuss Kyoto. 
 
¶18. Machnig touched on the topic of international cooperation on 
climate by 
raising the issue of adaptation.  He said there needs to be a signal 
at the G-8 
level that we take the concerns of developing countries seriously 
and will 
support their adaptation to climate change.  Connaughton agreed but 
explained 
the U.S. sees adaptation as part of a broader, sustainable 
development agenda. 
Machnig insisted on the importance of signaling to the developing 
world that we 
support adaptation by putting money into the World Bank Energy 
Investment 
Framework for this cause. 
 
¶19. This message has been cleared by CEQ. 
 
TIMKEN, JR