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FM AMEMBASSY WARSAW
TO RUEHC/SECSTATE WASHDC 7252
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUEHZN/EST COLLECTIVE
RUEHZL/EUROPEAN POLITICAL COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING 0766
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHEBAAA/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RHEHNSC/NSC WASHDC

UNCLAS SECTION 01 OF 03 WARSAW 001271 
 
SIPDIS 
 
TREASURY FOR STEPHEN WINN, COMMERCE FOR MIKE ROGERS, ENERGY 
FOR ED ROSSI 
 
E.O. 12958: N/A 
TAGS: ECIN EMIN ENRG SENV PL
SUBJECT: POLAND INTENSIFIES EMISSIONS DIPLOMACY 
 
REF: A. WARSAW 1086 
     ¶B. BRUSSELS 1686 
 
¶1. (U) Summary: Recent robust Polish diplomacy on climate 
change issues has raised the country's profile in the EU's 
internal energy and climate debate and spotlighted its role 
as host of the 14th Annual Conference of the Parties to the 
UNFCCC (COP-14) in December.  In visits to Madrid, Paris, 
Berlin, Brussels and Beijing over the past month, PM Tusk has 
rejected any EU climate change package disruptive of the 
coal-based Polish economy; he has moved to solidify a 
"blocking minority" against such a package in Brussels; and 
he has invited leaders of EU member states comprising that 
minority to a November summit in Warsaw.  He also has 
referred to China, with its own coal dependence, as an ally 
in the approaching COP-14. 
 
¶2. (U) Though recent, such Polish diplomatic engagement is 
rooted in long-term domestic economic and political 
calculations rather than new aspirations for regional or 
international leadership.  Compared to western European EU 
member states, there is a measurably lower level of public 
concern in Poland over climate change issues, but a higher 
aversion to dependence on Russian energy supplies, Poland's 
only perceived alternative to carbon intensive coal.  The GOP 
continues to assert its support for EU and UNFCCC energy and 
climate policies, but until it diversifies its energy 
supplies and becomes more competitive in its energy 
efficiency, these prevailing economic and political factors 
within Poland will limit the scope for agreement on emissions 
caps with its EU partners.  Poland risks losing whatever bets 
it places on a European coal-based alliance(s) to political 
horse-trading in Brussels. End summary. 
 
=================================== 
EMISSIONS DIVIDE OLD AND NEW EUROPE 
=================================== 
 
¶3. (U) Since joining the EU in May 2004 as the largest of the 
newer EU economies, Poland's 38.5 million people have enjoyed 
annual economic growth rates of over 5%.  Among the resources 
Poland brought into the EU were its vast coal reserves, which 
are the largest of any member state.  According to World Coal 
Institute statistics from 2006, Poland is the world's eighth 
largest coal producer.  Its coal reserves are concentrated in 
the Upper and Lower Silesia regions of southwestern Poland 
near the Czech and German borders.  Together these two 
regions have more working coal miners than the rest of the EU 
combined.  Poland generates over 95% of its electric power 
from coal--a higher percentage than any other industrialized 
country except South Africa, and far more than the US (50%), 
Germany (47%), the UK (44%), Italy (14%) and France (under 
4%).  Poland's central and eastern European EU neighbors--the 
Czech Republic, Slovakia, Hungary, Romania and Bulgaria--all 
rely on coal for well over 50% of their electricity. 
 
¶4. (U) French President Sarkozy's EU energy and climate plan, 
which he aspires to see enacted by the end of the current 
French EU presidency, mandates a 20% cut in EU emissions by 
2020 from 1990 levels.  The plan sets CO2 emissions quotas 
for all EU member states and a full auctioning of emissions 
permits for the electric power sector by 2013.  The plan cuts 
Poland's requested emissions quota by 27%; as such it has 
serious implications for Poland.  Piotr Serafin, Under 
Secretary of the GOP's Office of the Committee for European 
Integration, has said, "For Poland, the current (French) 
proposal is still more a threat than an opportunity."  In a 
meeting with econoffs, Serafin said he foresees many Polish 
electric power plants being forced to close under the plan, 
since they will be unable to afford the emissions permits 
required in order to continue operating.  He also predicts 
electricity rate increases of up to 70% for Polish consumers 
based on emissions caps alone, and a doubling after necessary 
modernization investments (more than 40% of Poland's 
coal-based power plants are at least 30 years old). 
Emphasizing these concerns in an early October press 
conference in Cordoba, Spain with PM Zapatero, PM Tusk said, 
"The nations of the EU cannot adopt decisions today that will 
contribute to an increase in the price of energy."  At 
subsequent meetings with President Sarkozy in Paris and 
Chancellor Merkel in Berlin, he restated these Polish 
objections to the French plan. 
 
WARSAW 00001271  002 OF 003 
 
 
 
=================================== 
An Alliance of Coal-Based Economies 
=================================== 
 
¶5. (SBU) By the October 14-15 EU summit in Brussels, Tusk had 
forged an alliance with the Czech Republic, Slovakia, 
Hungary, Romania and Bulgaria to delay passage of the French 
plan (all of which share to some extent a reliance on coal 
and a sensitivity to dependence on Russian energy supplies). 
Once Italy, which under PM Berlusconi is expanding its 
coal-based power generation, joined the Polish diplomatic 
effort, the alliance became a "blocking minority" under the 
EU's complex weighted voting rules.  Said Tusk, "We don't say 
to the French that they have to close down their nuclear 
power industry and build windmills.  Nobody can tell us the 
equivalent."  (NOTE: Polish officials privately admit their 
skepticism that the alliance will hold as political 
horse-trading picks off smaller members). 
 
¶6. (U) Moving to solidify this Polish-led minority, Tusk has 
since invited leaders of the blocking minority countries 
(except Italy) to a November summit in Warsaw for talks on 
revisions to the French plan which would raise CO2 emissions 
caps for electric power utilities and shift to a gradual 
introduction of auctioned emission permits from 2013 to 2020. 
Post will report on this summit septel. 
 
¶7. (U) In his speech on sustainable development at last 
week's Asia Europe Economic Summit, PM Tusk included what MFA 
contacts described to Econoff as having "major parts" on an 
alliance of "coal-based economies" within the EU and a 
similar alliance with China at the COP-14.  Press reports 
quoted Tusk saying, "I expect that in China we will find an 
ally for the global climate talks.  We are in a similar 
situation due to our coal-based economies.  We cannot allow 
fighting climate change to destroy them."  Econoff and poloff 
have scheduled a follow-up meeting with MFA for more details 
and will report septel. 
========================================= 
Public Opinion: Climate Change vs. Russia 
========================================= 
 
¶8. (SBU) The COP-14 scheduled for Dec 1-12 in Poznan is 
expected to attract approximately 10,000 attendees from 190 
countries.  However, what awaits them in Poland is a country 
with a level of public interest in climate change issues that 
is measurably lower than almost anywhere else in the EU. 
Polish media rarely report on environmental issues in 
general, and coverage of recent pre-COP 14 environmental 
ministerial meetings in Warsaw was negligible.  According to 
Eurobarometer research conducted from March through May 2008, 
50% of Poles view climate change as the most serious problem 
now facing the world, compared to 74% of Swedes, 73% of 
Finns; 71% of Germans, Danes, and French; 69% of Austrians, 
66% of Dutch, 61% of Belgians and Spaniards, and 57% of 
British.  In fact, among all EU residents, only Italians 
(47%) and Czechs (45%) show less concern than Poles over the 
issue. 
 
¶9. (SBU) Poles do care about climate change, but they place a 
much higher priority than western Europeans on averting any 
increase in the country's dependence on Russian energy 
supplies.  GOP leaders view this as a bone fide national 
security issue, supported by public opinion polls in the wake 
of Russia's recent military incursion into Georgia that show 
65% of Poles are afraid of Russia.  Poland currently obtains 
70% of its natural gas from Russia.  While gas accounts for 
only about 12% of Poland's energy needs (compared to over 60% 
of Germany's), Poles view these supplies as inherently 
unstable, subject to politically motivated price hikes and 
service cuts (like those used against the Baltics, Ukraine 
and Belarus in recent years), or to delivery shortfalls as 
Russian oil and gas production declines.  GOP leaders are 
unbending in their opposition to German participation in the 
planned Nordstream project for transporting Russian gas by 
undersea pipeline directly from Russia to Germany, and often 
cite this as a reason they resist investing in gas 
interconnections to the West. 
 
¶10. (SBU) Nevertheless, in the absence of rapid advances in 
clean coal technologies, Poland has no readily available 
 
WARSAW 00001271  003 OF 003 
 
 
alternative to natural gas for modernizing its power and 
other energy intensive sectors.  The GOP continues to pursue 
a number of plans--so far without concrete success--to 
diversify the country's oil and gas imports.  These include a 
pipeline from Norway through Denmark that to date has 
attracted scant investor interest, a Liquified Natural Gas 
(LNG) terminal project on Poland's Baltic Coast; and 
membership in a regional consortium to build a 1,200 MW 
nuclear power plant in Lithuania that remains a distant goal. 
 Poland's natural gas utility PGNiG has been aggressively 
seeking alternative sources of supply.  They have reportedly 
made investments or at least made contacts as far afield as 
Pakistan, Venezuela, Nigeria, Libya, Iraq, and even Iran 
(though they have committed to support sanctions regimes 
against Iran as reported in reftel).  More recently, the 
Minister of the Economy has organized a "Summit on Sectoral 
Cooperation" just before the COP-14 for his counterparts from 
the major emitting countries and representatives of their 
heavy industries (steel, aluminum, cement).  Also, Piotr 
Serafin's office, which closely tracks climate change and 
emissions cap legislation in the U.S. Congress, has requested 
post's assistance in making US cap & trade experts available 
to GOP policy makers. 
 
======= 
Comment 
======= 
 
¶11. (U) PM Tusk's intensifying diplomacy on climate change 
has compelled recognition of Poland's policy prerogatives in 
the EU, but these remain on a collision course with Sarkozy's 
zeal to see "Europe set an example" on the issue.  In the 
short term, Poland's blocking minority may thwart the French, 
but only as long as it holds together in the face of pressure 
from the rest of the EU--which still supports the French 
plan.  Regardless of whatever solidarity emerges from Tusk's 
coal-based alliance summit in Warsaw next week, or from any 
partnerships with the Chinese or others at the COP-14, 
Poland's diplomatic efforts can ultimately only buy time in 
the face of the inevitable.  One way or another, it will have 
to raise the efficiency of its most energy intensive economic 
sectors and move away from dependence on coal, a natural 
resource that has long fueled not only its economy but its 
hope of energy self-sufficiency and its national pride. 
 
ASHE