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Cablegate: Sarkozy Announces Marshall Plan for the Environment

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FM AMEMBASSY PARIS
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UNCLAS SECTION 01 OF 03 PARIS 004364

SIPDIS

SENSITIVE

SIPDIS

WHITE HOUSE FOR CEQ, USTR

E.O. 12958: N/A
TAGS: SENV ECON PGOV FR
SUBJECT: SARKOZY ANNOUNCES MARSHALL PLAN FOR THE ENVIRONMENT

REF: PARIS 4139 (NOTAL) AND PREVIOUS

1. (SBU) Summary: On October 25, Nicolas Sarkozy, flanked by Al
Gore, Wangari Maathai and Manuel Barroso, concluded the
four-month French 'Grenelle' environment process calling for a
series of measures to reduce greenhouse gas emissions, cut
pesticide use, and implement a "freeze" on planting GMOs. He
suggested imposing additional taxes on fossil fuels and urged
the European Union to study levying a carbon tax on imports from
countries not part of the Kyoto Protocol system. The Grenelle
process and Sarkozy's presentation have received wide acclaim in
France. Legislation to implement some of these measures comes
next. The public success of the process gives France the boost
it sought before it assumes the EU presidency in the second half
of 2008 when it will put climate and the environment at the top
of its agenda. A septel will follow containing policy
recommendations in response to measures affecting U.S.
interests. End summary.

Environment Front & Center
--------------------------

2. (SBU) Sarkozy has put the environment at center stage from
the outset of his presidency. He created a 'mega' environment
ministry with responsibilities not only for traditional ecology
and sustainable development, but also for transportation, energy
and regional planning. He deemed the new minister to be the
third ranking official in the government. But the most
ambitious environment-centered effort was a process bringing
together the government, business, farmers, NGOs and
international environmental activists to develop concrete
measures to reduce greenhouse gases, preserve biodiversity, and
limit pollution. The 'Grenelle', named after a similar type of
estates-general held following the turmoil of 1968, was called
to develop a new social contract based on the environment
(www.legrenelle-environnement.fr). Over the last several months,
six working groups have met and considered issues relating to:
climate change, biodiversity, health, sustainable production and
consumption, governance, employment and competitiveness. Two
inter-sectoral groups considered GMOs and pollution. Preliminary
group reports were followed by regional consultations, leading
up to a two day national meeting that concluded at the Elysee
yesterday. While various groups criticized the process along
the way - especially when Sarkozy ruled out any reconsideration
of French reliance on nuclear power, overall the process
received rave reviews across the political spectrum. The
environment is popular in France and Sarkozy's 'green team' of
State Minister Borloo and Ecology and Sustainable Development
Secretary of State Kosciusko-Morizet largely succeeded in

SIPDIS
capturing the public's and interest groups' attention and
imaginations during these past several months.

France's 'Environmental New Deal'
---------------------------------

3. (U) Measures of significance summed up by Sarkozy in his
October 25 speech include those related to the climate and
energy, agriculture, and health.

Carbon Taxes - Sarkozy has committed to studying the imposition
of "climate-energy taxes." The idea is not to increase taxes
domestically, but rather to increase taxes related to greenhouse
gas emissions and lower those associated with labor. He
emphasized he does not want to "penalize" French competitiveness
nor the buying power of the French through the imposition of new
net taxes. By way of example, he suggested the reduction of
value added taxes on 'green' products. This matter is now
referred to the French Parliament for further consideration.
Sarkozy also proposed the "study" at the EU level within the
next six months of an import tax on goods manufactured in
countries not subject to a cap-and-trade system along the lines
of the European Emissions Trading System. ( This proposal was
first advanced in the de Villepin government, but Sarkozy's
speech was the first formal GOF endorsement.)

GMO Moratorium - As expected, Sarkozy announced the suspension
of the commercial production of "pesticide GMOs" pending review
by a new competent authority on biotech, which is to be
established by year's end. Sarkozy also announced that France
would adopt a national biotech law in the spring of 2008,
transposing the EU directive on coexistence between biotech and

PARIS 00004364 002 OF 003


conventional crops, as legally required. Sarkozy invoked the
precautionary principle (which is incorporated in the French
constitution) both in justifying this decision and in guiding
future actions. While stating that France would live up to its
EU and international commitments, he put the burden of proof on
biotech advocates to prove the environmental and health benefits
of biotech varieties stating that decisions would be founded on
the "general interest" not individual commercial benefit. Open
field research will be allowed to continue. The President
condemned biotech crop destruction. (Comment: This announcement
clearly jeopardizes MON 810 corn production, the only biotech
crop commercially produced in France, and is likely to greatly
reduce if not eliminate the possibility for 2008 planting. End
comment.)

Energy - Sarkozy did not totally skirt the nuclear issue. He
gave a nod to the environment community by proposing a freeze on
"new sites" for nuclear reactors, leaving open building on
existing nuclear sites. (The new European Pressurized Reactor
under construction in Normandy is, for example, being built on
an existing nuclear site and would, therefore, be exempted from
this freeze.) Sarkozy also endorsed a 20% reduction in energy
consumption by 2020 and declared that France would increase the
content of renewable energy in its mix to 20% by 2020. The sale
of incandescent bulbs will be banned after 2010. The GOF
proposes a major program to reduce energy consumption in
buildings by enhancing the building codes for new and renovated
buildings substantially by 2008 and 2012.

Transportation - Sarkozy also articulated an ambitious proposal
to freeze construction of new roads and airport infrastructure
with certain exceptions. On the other hand, he proposed the
extension of the system of public tramways and encouraged
increasing by an additional 2,000 kms high speed trains. He
gave the green light to new efficient maritime routes between
Spain and France and Portugal and France. He proposed an 'eco'
tax on heavy trucks. Interestingly, a proposal by one of the
Grenelle working groups to cut automobile speed limits did not
make it into the President's speech.

Pesticide reduction - Under the new proposals, French
agriculture could be subject to considerable change: targeting a
great increase in organic farming and drastically reducing the
use of pesticides (subject to the identification of viable
alternatives). The Agriculture Minister is to submit within one
year a plan to reduce the use of pesticides by 50% "if possible"
within 10 years. Targeted pesticides are to be withdrawn from
the French market.

Other - A number of other significant measures were reported by
Sarkozy including those related to air quality and the recycling
of household waste and packaging.

Next Steps
----------

4. (SBU) In a preview earlier this week, Kosciusko-Morizet's
chief of staff told us that the outcomes of the Grenelle would
include a number of immediate operational decisions; a set of
targets and timetables for future action, for which concrete
mechanisms would be defined over the next several months; and, a
set of medium term proposals that would require either domestic
legislation or action at the level of the European Community.
The former would be submitted to the National Assembly in early
2008 while the latter would become the centerpiece of France's
EU presidency in the second half of the year. An advisor to
Agriculture Minister Barnier stressed to us that French fear of
GMOs was widely shared in Europe and the Grenelle process would
lead to a broader European reconsideration of agricultural
biotechnology. What France decides at the national level, he
said, it would seek to expand to the Community, with expected
broad popular support.

Not there yet....
-----------------

5. (SBU) There has been relatively little discussion of costs
and financing in the Grenelle discussions thus far. Sarkozy
stressed the need for France to set the example on sustainable
development which will require annual investment of up to one
percent of GDP. More specifically, Sarkozy announced that the

PARIS 00004364 003 OF 003


GOF would invest one billion euros over the next four years in
R&D as well as in incentives to change behavior. There appears
to be a general belief that most of the conservation measures
mooted will pay for themselves and in turn enhance growth. A
full accounting of projected costs has not been presented.

6. (SBU) Comment: Despite the skeptics, Sarkozy pulled off a
domestic environmental (and political) coup. He has put France
at the forefront of European environmentalism (at least
according to the French). Jean-Louis Borloo and Natalie
Kosciusko-Morizet, the State Minister and State Secretary for
environment have proven themselves (to the French electorate) as
environmental custodians for having shepherded the Grenelle
process. And, of course, the process succeeded in bringing
varied French stakeholders together. End Comment.

Please visit Paris' Classified Website at:
http://www.state.sgov.gov/p/eur/paris/index.c fm


Stapleton

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