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DE RUEHNE #1669/01 1700551
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O 180551Z JUN 08
FM AMEMBASSY NEW DELHI
TO RUEHC/SECSTATE WASHDC IMMEDIATE 2231
INFO RHEBAAA/DEPT OF ENERGY WASHDC IMMEDIATE
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UNCLAS SECTION 01 OF 03 NEW DELHI 001669 
 
SIPDIS 
SENSITIVE 
 
STATE FOR EEB/ESC DHENGEL, PHAYMOND, KBEL 
STATE FOR STEVE MANN 
DEPT OF ENERGY FOR U/S BUD ALBRIGHT, DSCHWARTZ 
DEPT OF ENERGY IP FOR A/A/S KFREDRIKSEN, RCOOPER, GBISCONTI 
DEPT OF ENERGY IP FOR TCUTLER 
DEPT OF ENERGY FE FOR DAS JSWIFT, RLUHAR 
DEPT OF TREASURY FOR OFFICE OF SOUTH ASIA - MNUGENT 
AMEMBASSY TOKYO PASS USDOE SEC BODMAN, KFREDRISKEN, SRUEN 
 
E.O. 12958: N/A 
TAGS: ECIN ECON ENRG EPET ETRD PGOV PREL SENV IN
 
SUBJECT: CEQ CHAIRMAN CONNAUGHTON TALKS CLIMATE CHANGE AND ENERGY 
SECURITY WITH GOI 
 
¶1. (U) Summary:  On June 16, Chairman James Connaughton of the White 
House Council on Environmental Quality (CEQ) met with Dr. Kirit 
Parikh, Member, Planning Commission of India, and Ministry of 
Commerce Secretary G. K. Pillai to discuss key climate-change and 
energy-security issues ahead of the Major Economies Meeting to be 
held in South Korea from June 20 to 22 and the G8 Summit in 
Hokkaido, Japan, July 7 to 9.  Chairman Connaughton was joined by 
Mr. Landon Van Dyke, the CEQ's Associate Director of International 
Affairs & Climate Change, as well as key Embassy representatives. 
End summary. 
 
PARIKH FOCUSES ON PER-CAPITA PARADIGM FOR CARBON 
--- 
 
¶2. (SBU) In his meeting with Dr. Parikh, Chairman Connaughton 
emphasized that the U.S. anticipates a strong national plan by India 
to improve energy efficiency and simply wants India and other major 
economies to reflect their national plans in an international 
agreement.  Parikh responded that India has already committed to an 
international standard with the Prime Minister's pledge that India 
will not exceed the world's average per-capita carbon emissions, 
adding that reductions in emissions by developed countries will 
reduce the world average and consequently bring down India's 
benchmark. 
 
¶3. (SBU) Connaughton then had to depart for his meeting with 
Secretary Pillai, but Parikh continued the dialogue with Mr. Van 
Dyke.  Van Dyke briefed Parikh on the multifaceted U.S. plan to 
improve energy efficiency and reduce emissions, giving particular 
attention to the effort to move to second-generation biofuels, which 
are not made from food sources.  Parikh asked a number of questions 
about the details of U.S. plans and about strategies for 
implementation and said that India is doing many of the same 
things. 
 
¶4. (SBU) Parikh asserted that the U.S. and the European Union need 
to reduce carbon emissions by 80 percent by 2050 and that the U.S. 
should start reducing from tomorrow rather than projecting a peak in 
2025 and reductions thereafter.  He proposed what he called "the 
simplest solution"--worldwide, per-capita, tradable carbon credits, 
allocated retroactively from 1990 and out to 2050, so major emitters 
would be fully accountable.  Van Dyke countered by explaining that 
developing countries with very small populations might not have 
enough credits to cover even minimal energy production needed for 
development, nor the resources to buy credits from others. 
 
¶5. (SBU) Parikh endorsed a graduated system in international 
commitments that would motivate the biggest emitters to reduce 
emissions and developing countries to stay below established 
thresholds.  He also approved of the idea of facilitating trade in 
clean-energy technologies by reducing tariffs and other barriers, 
provided the market for such technologies is competitive enough to 
ensure reasonable pricing.  He said India aims to improve energy 
efficiency by 20 percent by incorporating renewables, hydroelectric 
power, and other alternatives to fossil fuels, but he also said that 
India will continue to need large amounts of coal for the 
foreseeable future.  He suggested that nuclear power could 
contribute 300 gigawatts in 2050 but is not likely to account for 
much of India's generation over the shorter term.  Parikh qualified 
this assessment, however, by saying that if solar technologies 
become more fully developed, all of the numbers could change. 
 
CONNAUGHTON MEETS WITH COMMERCE SECRETARY 
--- 
 
¶6. (SBU) Separately, on June 16, CEQ Chairman Connaughton met with 
GOI Commerce Secretary G.K. Pillai to discuss the WTO Doha Round 
environmental goods discussions and the Leaders' Declaration at the 
Major Economies Meeting (MEM) to be held in conjunction with the 
G8. 
 
¶7. (SBU) Secretary Pillai began by stating that he was "mildly 
optimistic" on prospects for a successful conclusion to the Doha 
 
NEW DELHI 00001669  002 OF 003 
 
 
Round.  "Things are looking positive," he continued, "I expect 
discussions this week [June 16] to narrow gaps further."  According 
to Pillai, differences could be narrowed even more the following 
week, culminating in a Ministerial in the first half of July.  He 
only foresaw some difficulty with NAMA (Non-agricultural Market 
Access), "where the chair has made a mistake" in putting forth a 
text that increases the number of negotiating brackets. 
 
¶8. (SBU) Turning to the Major Economies Leaders' Declaration, 
Chairman Connaughton noted that the U.S. was trying to move language 
forward.  To come up with a strong statement, leaders should direct 
trade negotiators in Geneva in the WTO Committee on Trade and 
Environment in Special Session (CTESS) to conclude discussions on an 
agreed list of climate friendly technologies and make progress on 
the environmental goods proposal.  The main concerns on the 
liberalizing proposals in CTESS have come from India, Brazil, and 
China.  A clear statement from the leaders would also help fend off 
problematic proposals for trade-based measures against countries 
based upon carbon output.  Noting that the list of goods and 
services will be a broad list of about 180 items, Connaughton pushed 
Pillai to look at finding some language for the MEM Leaders' 
Declaration.  Pillai indicated that the GOI's concern is that the 
proposed list of products may consist of items that are "dual use," 
though it was evident he likely had not yet reviewed the proposed 
list. 
 
¶9. (SBU) Pillai asked skeptically whether there would be a benefit 
in increased technology transfer from reducing tariffs on climate 
friendly items, noting that India had not seen as much tech transfer 
from trade and investment as it had hoped.  Connaughton underlined 
that the thrust of the proposal was to unblock two way trade.  The 
U.S. actually ran a trade deficit ($18B in imports and $15B in 
exports) in this area with countries with which it had agreed to 
greater market access, such as Canada and Japan.  In fact, many 
items on the proposed list are not high-profit-margin technologies, 
and high tariffs only serve to block this potential trade.  Many of 
the items play to India's strengths, Connaughton noted, citing the 
huge bilateral potential in more efficient motors and windmills as 
an example. 
 
¶10. (SBU) Pillai said that the GOI favors a "project approach," 
which would grant tariff concessions to environmental goods to be 
used in specified projects.  [Note: India's approach would 
substitute unilateral import tariff preferences for imports for 
specific environmental projects in place of multilateral 
liberalization on an agreed list of environmental goods.  End note.] 
 Connaughton replied that such a project approach simply represents 
the status quo and would not allow for long-term capital planning 
and the free flow of goods given all the bureaucracy involved. 
Pillai demurred, stating that there was not much tech transfer 
occurring, and questioning why there was not more FDI from the U.S. 
in India, "everyone else is coming to India - where is the U.S.?" 
He further expressed concern that reducing tariffs in this area 
would lead to a "one-way" street, stating that he was "not convinced 
that just making tariffs zero" would be useful.  Pillai emphasized 
that there were some items on the proposed list that would be 
damaging to Indian industry which "needed protection" in these 
areas.  He did not specify any item.  Connaughton urged him to share 
his concerns and the list of sensitive goods with the USG. 
 
¶11. (SBU) Returning to the larger Doha Round discussions, Pillai 
focused on Services as the most important potential benefit for 
India.  Claiming that in Ag, India was not getting anything, and 
that in NAMA, India was taking deeper cuts than the U.S., Pillai 
said that the GOI did not understand the U.S. concern over Mode 4. 
He discussed the GOI's Mode 4 concerns at length, repeatedly 
underlining that it was an issue of trade in services and not 
immigration.  Nevertheless, India was willing to be forward-leaning 
in Services discussions.  "We can bind at 74 percent in telecom, and 
100 percent in courier services," Pillai said, noting that FedEx and 
other express delivery companies already operated in India and 
provided many benefits. 
 
 
NEW DELHI 00001669  003 OF 003 
 
 
¶12. (SBU) In closing, Connaughton again pressed for a clear 
statement for the MEM Leaders' Declaration, which would have the 
benefit of also helping fend off trade-based measures on carbon. 
Pillai replied that "we'll work on it." 
 
¶13.  (U) The Connaughton delegation cleared this cable. 
 
MULFORD