VZCZCXRO7536
RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSR
DE RUEHVI #0054/01 0151103
ZNR UUUUU ZZH
R 151103Z JAN 09
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 1860
INFO RUCNMEM/EU MEMBER STATES
RUEAEPA/EPA WASHDC
RHEBAAA/USDOE WASHDC

UNCLAS SECTION 01 OF 03 VIENNA 000054 
 
SIPDIS 
SENSITIVE 
 
STATE FOR OES/GC AND EUR/CE 
EPA FOR OIA (ALMEIDA) 
 
E.O. 12958: N/A 
TAGS: SENV KGHG ENRG EIND ECON AU
SUBJECT: New Austrian Climate Realism at Highest Levels 
 
REF: (A) 08 VIENNA 1348 AND PREVIOUS; (B) 07 VIENNA 1819 
 
Sensitive but Unclassified - not for Internet distribution. 
 
¶1.  SUMMARY:  Faced with a widening gap between promises 
and performance on emissions reduction, the new GOA is 
shrinking its climate/energy goals to fit Austria's modest 
initiatives.  Having failed to reach its Greenhouse Gas 
(GHG) reductions goals in the Kyoto period by almost a 
quarter, the GoA now avoids putting any figures in its 
official program for the post-Kyoto period.  Blessed with 
extensive hydropower resources, the GoA nevertheless fought 
Brussels until the 11th hour -- in vain -- over Austria's 
2020 target of 34% renewables in the energy mix (currently 
23%).  Energy-intensive industries here are content with 
the climate/energy package, and contacts say the Commission 
might even waive fines for Austria and other Member States 
missing their GHG reduction goals under the Burden Sharing 
Agreement, since the EU as a whole will reach its 8% 
reduction target.  END SUMMARY. 
 
New GOA Tactic: Be Vague / Avoid Concrete Targets 
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¶2.  The new GoA seems to have learned from experience not 
to include verifiable goals on climate change and energy 
goals unless there is sufficient will to fulfill them. 
Austria missed its high-profile Kyoto GHG reduction targets 
(ref A), its goal (introduced in 2007) to have a 45% share 
of renewables on the energy mix by 2020, and its very 
ambitious biofuels goals (10% of transportation fuels by 
2010).  The new GoA domestic program for the period through 
2013 has only general language on an "ambitious" climate 
protection policy, reducing fossil fuel use, promoting 
environmental technologies, and increasing renewable energy 
sources.  Planned national measures include the 
introduction of a "Federal Climate Protection Act" (to 
coordinate policies among Austrian states), EUR 150 million 
annually for the "Climate and Energy Fund" (septel), and 
crafting adaptation/compensation measures for energy- 
intensive industry.  With regard to international climate 
policy, the focus is on "fair burden sharing on CO2 
reductions and renewables energies" within the EU climate 
package and the Kyoto-successor agreement. 
 
¶3.  In personnel terms, climate policy has been downgraded. 
Chancellor Faymann summarily fired his predecessor's 
"Special Envoy for Climate Change" (Andreas Wabl) and said 
the task can be handled within existing institutions. 
Vice-Chancellor Josef Proell (head of the conservative 
People's Party) knows the issue well as a former 
environment minister, but is occupied with finance and 
party responsibilities and is not/not a leading voice on 
the environment. 
 
GOA Tried To Get Lower Renewables Goals... 
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¶4.  The EU summit in December 2008 was a first litmus test 
for the new GoA climate policy.  While Austria accepted its 
16% GHG reduction target until 2020, the GoA fought until 
the last minute against the 34% renewables goal (by 2020 / 
primary energy).  Chancellor Faymann argued that according 
to a study by the Vienna Technical University and the 
Austrian Institute for Economic Research, Austria could 
reach at most 28% renewables (from 23% at present).  Since 
the GoA had itself set a 45% goal as recently as 2007, 
backing away from the 34% mark was a non-starter and 
Faymann only got the Commission to accept a declaration in 
the annex to the Renewables Directive that it "acknowledges 
that some Member States already in 2005 have achieved a 
high share of renewable energy at the national level".  The 
GOA sees the Commission declaration as mollifying language 
in case it does not meet the 2020 target.  COMMENT: Co- 
author Stefan Schleicher told us that since the study 
extrapolates from current energy consumption, if Austria 
can reduce consumption, a higher renewables share is 
possible.  END COMMENT. 
 
... and Won Generous Co2 Exceptions For Industry 
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¶5.  Austria was among those member states lobbying in the 
EU climate package for giving free emissions certificates 
to energy-intensive industries and relief to automotive 
producers (Austria has big stakes in steel, cement, and 
automotive components).  Chancellor Faymann announced after 
 
VIENNA 00000054  002 OF 003 
 
 
the summit that most Austrian industry will probably not 
have to pay for CO2 certificates.  NOTE: The final 
allocation will be known by the end of 2009, and not mid- 
2009 as the GoA had preferred.  END NOTE. 
 
¶6.  A contact in the Austrian Association of Industries, 
environmental specialist Dieter Drexel, told embassy reps 
that industry got "100 percent" of its demands at the EU 
summit and that the "carbon leakage" argument was decisive. 
Industry claimed that full auctioning of CO2 emission 
rights would have cost Austria a GDP loss of EUR 17 billion 
and around 17,000 jobs would have gone abroad. 
 
Austrian Industry Lauds MEM Model 
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¶7.  Drexel was a member of the Austrian delegation to 
UNFCCC-COP 14 in Poznan (as an industry lobbyist) and gave 
us his readout, opining "nothing" besides a work plan was 
achieved at Poznan.  There is a "deep gap" between 
developing and developed countries on almost every issue. 
Industry's proposal for voluntary agreements on emissions 
reductions in the developing world in exchange for funding 
was seen as "affront" by the EU, which insists on 
governmental agreements.  Drexel warned that protectionist 
measures remain on the table unless parties can agree on 
agreements that include key industries in China and India 
to create a "level playing field" for European companies. 
Drexel praised the U.S.-sponsored Major Economies Meetings 
(MEM) and its limited participation as a better forum for 
constructive discussion than the huge UNFCCC conferences. 
(NOTE: Austria is not a participant in the MEM process). 
 
Commission May Clear Austria Of Its Kyoto Goal Failure 
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¶8.  Observers here say the GOA is backtracking and the EU 
is unlikely to compel decisive action in Austria.  Deputy 
Director Karl Steininger of the Wegener Center (a leading 
climate research institution) expressed concern that the 
new GoA avoids setting measurable goals either domestically 
or within the UNFCCC/Kyoto framework.  Steininger sees no 
concrete measures which would come close to the 69 mtCO2e 
target over the Kyoto period 2008-2012 (in 2006 Austria 
emitted 91 million tons, in 2007 88 mtCO2e) .  The GoA is 
treating its Kyoto goal as a 2012 target -- and not in its 
original meaning as a five-year average.  The GOA's plan to 
buy 9 mtCO2e in allowances from other coutries and reduce 
domestic emissions by another 1 mtCO2e will not/not be 
enough.  Steininger suggsted that the EU Commission may 
waive fines for Mmber States under the EU Burden Sharing 
Agreemens because the EU as a whole will reach its 8% 
reuction goal.  The breach of the Kyoto Protocol 
cmmitments itself does not trigger compensation payents, 
he said. 
 
¶9.  Steininger sid Austria's short-term abatement 
prospects are modest:  they include 
-- discouraging "gasoline tourism" by residents of 
neighboring countries by raising the fuel tax 
-- mandating highly efficient and renewable heating 
systems, and 
-- massive subsidies for energy-efficient renovations 
Only the last measure is foreseen in the GoA program.  In 
any case, the current recession will reduce energy 
consumption and GHG emissions. 
 
Will Ordinary Austrians Re-Engage? 
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¶10.  COMMENT:  While still a country with high 
environmental and efficiency standards, in recent years 
Austria has made a gradual policy shift towards industry 
interests whenever those conflict with environmental goals. 
That shift predates the current economic crisis. 
Government and industry officials now agree that standards 
cannot be improved without losing competitiveness.  The GOA 
is a strong supporter of biofuels and (all else equal) 
wants more renewables but further expansion of hydropower 
resources would meet local resistance and nuclear energy is 
completely anathema.  Transportation -- the biggest source 
of GHG growth -- is an obvious target but there is no 
political will for higher taxation or road pricing.  The 
GOA will take steps on the building sector. 
 
¶11.  Perceptions are slow to change, and for now the 
Austrian public does not perceive this anti-environment 
 
VIENNA 00000054  003 OF 003 
 
 
shift (NOTE: Austria's Greens failed to capitalize on the 
protest mood in 2008 national elections).  Eventually 
ordinary Austrians will discover that the Alpine republic 
is no longer among Europe's environmental forerunners. 
While jobs are the biggest concern at the moment, in a 
country where a noisy highway (or any hint of atomic 
energy) can lead to civil disobedience, that realization 
may eventually have political relevance.  END COMMENT. 
 
GIRARD-DICARLO