VZCZCXRO2914
RR RUEHIK
DE RUEHBS #1334/01 2741632
ZNR UUUUU ZZH
R 011632Z OCT 09 ZDK
FM USEU BRUSSELS
TO RUEHC/SECSTATE WASHDC
INFO RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHBJ/AMEMBASSY BEIJING
RUEHNE/AMEMBASSY NEW DELHI

UNCLAS SECTION 01 OF 02 BRUSSELS 001334 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ECON EIND ENRG EUN EWWT KGHG SENV TPHY TRGY TSPL
SUBJECT: CONGRESSMAN MARKEY SHOWS OPTIMISM IN VIDEO CONFERENCE WITH 
EUROPEAN COMMISSION 
 
BRUSSELS 00001334  001.7 OF 002 
 
 
¶1. (SBU) Summary.  Congressman Edward Markey (D-MA), Chairman of the 
House Select Committee on Energy Independence and Global Warming and 
co-author of the American Clean Energy and Security Act (ACES, also 
known as Waxman-Markey), told Commission officials and reporters 
that the Senate could pass similar legislation prior to Copenhagen 
on September 29.  The Chairman's DVC with three of the Commission's 
chief climate officials - Karl Falkenberg, Director General for DG 
Environment; Matthew Baldwin, climate and energy advisor to 
President Barroso; and Nancy Kontou, Chief of Staff to Environment 
Commissioner Stavros Dimas - was well received and elicited several 
themes: 
 
     -- Concern on the part of the Commission that the Senate will 
not act on climate legislation during this year, as both 
administration and Congressional priorities are with health care. 
The Chairman explained that there was no confidence in Waxman-Markey 
either, but it passed in record time; 
     -- The Commission remains solely focused on Copenhagen and is 
concerned that both inertia in the Senate and the lack of pressure 
from the administration will leave the United States without a 
mandate to negotiate.  The Chairman expressed confidence in the 
Senate, noting that most of the stakeholders were addressed by 
Waxman-Markey and that several Senators are pushing to complete as 
much as possible by Copenhagen; and 
     -- Linking carbon markets is almost as important to the 
Commission as agreement in Copenhagen, but some provisions in 
Waxman-Markey, including border measures and price collars, are 
causing concern.  End summary. 
 
Chairman Markey Confident of Senate Success 
------------------------------------------- 
 
¶2. (SBU) Chairman Markey took advantage of the video conference with 
key members of the Commission's climate to highlight the steps the 
United States has already taken this year to address climate change. 
 He noted both the $80 billion from the stimulus package to go 
directly to green energy technologies as well as the increase in 
U.S. CAFE standards to 35.5 mpg in 2016.  He then turned to the 
Waxman-Markey bill, stating that his legislation reached out to all 
stakeholders, including Congressmen and industry including coal, 
utilities, auto manufacturing, agriculture, and refining, leading to 
a widely supported bill. 
 
¶3. (SBU) DG Falkenberg offered his congratulations to the Chairman 
for success in passing Waxman-Markey, as well as plans by Senators 
Boxer and Kerry to release their bill. However, he expressed concern 
that the bill will not unfold during this year, leaving the rest of 
the world to wait for the Senate to act.  He noted that he 
understood that health care has taken priority in Washington, but 
questioned why President Obama has not endorsed Waxman-Markey or 
used his political influence to pressure the Senate. 
 
¶4. (SBU) Chairman Markey responded to Falkenberg's concerns by 
noting that there were few "experts" predicting success for 
Waxman-Markey, but the legislation passed the House in record time. 
He noted that President Obama has endorsed the legislation, and 
during his speech in New York, called Waxman-Markey "most important" 
in U.S. policy.  Turning to the Senate, the Chairman acknowledged 
the challenge of health care, but said that the health care debate, 
when successful, should add momentum to the climate legislation.  He 
also noted that since the bill has already been completed in the 
House, it will be more difficult for several Senators to vote 
against a comparable bill, particularly those who have endorsed 
climate legislation in the past. 
 
Target Remains Copenhagen 
------------------------- 
 
¶5. (SBU) Falkenberg appreciated the Chairman's optimism, but 
continued to express doubt that the Senate would be far enough along 
for the administration to negotiate strongly in Copenhagen.  He 
noted that there are only 68 days left before Copenhagen, and the 
world is watching what is happening in the United States.  Many, 
particularly China and India, want to see concrete content from the 
United States, and while Falkenberg is confident in the "outstanding 
people" and commitment from the administration, he questions how 
flexible the U.S. could be.  He noted that there is a risk that the 
agreement only serves to highlight what countries are doing 
domestically and questioned what the UN negotiating process adds to 
the debate in that situation. 
 
¶6. (SBU) The Chairman acknowledged Falkenberg's concerns, noting 
that it would certainly be better if the entire Congressional 
process was complete by Copenhagen.  He expressed belief that 
significant progress can be made to aid in the preparation for 
Copenhagen.  He relayed Congressional commitment, explaining that 
after Waxman-Markey was submitted, the Chairman travelled with 
Speaker of the House Nancy Pelosi to China, where they met with 
 
BRUSSELS 00001334  002.3 OF 002 
 
 
several officials at the top of the Chinese leadership to 
demonstrate U.S. intent to pass legislation.  Additionally, 
Waxman-Markey contains several key provisions focusing exclusively 
on international climate efforts.  He explained that the legislation 
allots approximately $5 billion/year to address international 
deforestation, as well as up to $4 billion/year each for 
international clean technology development and international 
adaptation.  Addressing outcomes in Copenhagen, the Chairman 
expressed that ultimately, all countries must have a common plan by 
which everyone is bound. 
 
Carbon Markets Remain Commission Priority 
----------------------------------------- 
 
¶7. (SBU) Beyond Copenhagen, a key message from the Commission is the 
aim of a global carbon market, ideally to be led by the creation of 
a transatlantic carbon market.  Falkenberg said that the United 
States and the EU need to look now at how to link the markets. 
However, he identified what he saw as two problems with 
Waxman-Markey: the inclusion of border adjustment measures and the 
existence of carbon price floors and ceilings.  (Note: In separate 
meetings with Commission officials, the size and scope of the two 
systems has also been cited as a potential problem.  The EU's 
Emissions Trading Scheme (ETS) makes up only 40-45% of the EU's 
economy, while Waxman-Markey covers 85% of the U.S. economy, 
incorporating both road transport and agriculture.  It is the 
inclusion of agriculture that is most often noted as the larger 
problem.  The Commission has indicated that it wants to set up a 
U.S.-EU working group to address these concerns.  End note.)  The 
Commission successfully fought against the inclusion of either in 
ETS, and Falkenberg believes those could present stiff obstacles. 
Additionally, Falkenberg explained that the details of international 
offsets need to be discussed and agreed, because only if the systems 
equally maintain the integrity of projects can the systems be 
linked. 
 
¶8. (SBU) The Chairman was in full agreement that there must be a way 
to link carbon markets and that offsets are set up correctly. 
Addressing border adjustment measures, he explained that many 
members are concerned that China and others will take advantage of 
U.S. environmental laws for a competitive advantage.  The provision 
written into Waxman-Markey is intended to send a signal to the U.S. 
steel, aluminium, and concrete industries.  However, it is important 
to note that the bill confers Presidential authority beginning only 
in 2020.  By then, the Chairman argued, there should exist a tight 
international regime, in which case there will be no need for border 
measures. 
 
¶9. (SBU) The Chairman concluded the DVC by stating that China wants 
to be number one in everything, particularlynited Sh` `ioned that "itis not 
everyday I have the opportunity to speQk to an influential 
Congressman."  USEU stronly supports engagement of this nature and 
invites additional policymakers to take part in similar video 
conferences. 
 
MURRAY