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Cablegate: Ambassador's April 15 Meeting With

VZCZCXRO9397
OO RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV
DE RUEHRL #0475/01 1071009
ZNR UUUUU ZZH
O 161009Z APR 08
FM AMEMBASSY BERLIN
TO RUEHC/SECSTATE WASHDC IMMEDIATE 0919
RHEHNSC/NSC WASHDC IMMEDIATE
INFO RUCNFRG/FRG COLLECTIVE
RUCNMEM/EU MEMBER STATES COLLECTIVE
RUEHKO/AMEMBASSY TOKYO 1565
RUEHMO/AMEMBASSY MOSCOW 1923
RUEHOT/AMEMBASSY OTTAWA 1121

UNCLAS SECTION 01 OF 03 BERLIN 000475

SIPDIS

SENSITIVE
SIPDIS

STATE FOR G, OES, E, EEB, AND EUR
PLEASE PASS CEQ - CONNAUGHTON

E.O. 12958: N/A
TAGS: SENV ENRG TRGY KGHG KPAO KSCA GM
SUBJECT: AMBASSADOR'S APRIL 15 MEETING WITH
ENVIRONMENT MINISTER GABRIEL

REF: A. BERLIN 428

B. 07 BERLIN 2077 AND PREVIOUS

1. (SBU) SUMMARY: German Environment Minister
Gabriel told the Ambassador that Germany
recognizes the role sectoral approaches will play
in supporting global efforts to reduce greenhouse
gas emissions. Gabriel views the Major Economies
Process as the key forum for building consensus
to support efforts toward a post-2012 framework
agreement, but believes developed countries need
to show more leadership by taking initial
responsibility before China, India, and other
emerging economies can be convinced to undertake
binding commitments. END SUMMARY.

--------------------------------------------- ----

GABRIEL RECOGNIZES VALUE OF MEP AND SECTORAL
APPROACH
--------------------------------------------- ----


2. (SBU) The Ambassador, accompanied by EMIN and
Econoff, met with German Environment Minister
Sigmar Gabriel April 15 to seek German support
for a forward-leaning Major Economies Leaders
Declaration on the margins of the July 2008 G-8
Summit in Japan. Gabriel was accompanied by
Environment Ministry Deputy Director General for
International Cooperation (and Germany's lead
climate change negotiator) Karsten Sach. Gabriel
expressed strong support for the Major Economies
Process (MEP), noting that the MEP will be for
the foreseeable future "the forum" where
decisions will be made among the 20 major
economies. "Whatever is discussed in the
UNFCCC," Gabriel said, "the MEP will be needed to
bring the 20 countries on board."

3. (SBU) Gabriel said the most interesting
discussion at the first Major Economies Meeting
in September 2007 was the emphasis the U.S. had
placed on the Montreal Protocol as an example of
the successful application of a sectoral
approach. At the end of the day, Gabriel
predicted, the post-2012 framework agreement will
employ a mixture of global and sectoral
approaches. Pointing to the ongoing discussion
among EU member states, Gabriel said that the EU
would not be able to accept a global treaty
without looking at sectoral agreements in at
least five energy-intensive areas, including auto
manufacturing and steel. "We need to create the
prospect for European industry of a level playing
field," he added.

4. (SBU) In response to the Ambassador's request
that Germany support the U.S. call for all major
economies (including China and other emerging
economies) to take on binding commitments,
Gabriel agreed that the emerging economies would
need to make binding commitments in the UNFCCC
process, but insisted that developed countries --
and the United States in particular -- must "show
leadership" by being the first ones to make a
commitment. The Ambassador stressed the
importance of recognizing that each country has a
different starting point, but that does not
diminish the need to press countries to make
commitments that they are willing to live by.

--------------------------------------------- ----

GERMAN CONCERNS ON LEADERS DECLARATION MAINLY
PROCEDURAL
--------------------------------------------- ----


5. (SBU) In a follow-on discussion with EMIN and
Econoff, Sach said that he and colleagues at the
Federal Chancellery had not yet seen the revised

BERLIN 00000475 002 OF 003


draft of the Leaders Declaration, but noted that
the emerging economies continued to reject
anything that might go beyond a "political"
statement. Sach said Germany's concern about the
Leaders Declaration is more procedural in nature.
Germany would like discussion on the Leaders
Declaration to be more closely coordinated with
the G-8 Sherpas' discussions on the G-8 Summit
Declaration to ensure consistency in the way both
declarations are framed.

6. (SBU) Specifically, Sach said, Germany would
like to use the G-8 Summit Declaration to move
the emerging economies toward sectoral approaches
by laying out a series of benchmarks that would
gradually level the playing field over the course
of several years. Sach speculated that the G-8
Summit Declaration might state that G-8 leaders
consider halving emissions by 2050 to be
adequate, but note that the G-8 countries need
help to do it. This would increase pressure on
the emerging economies to step up at the G8 + O5
meeting the following day and/or at the follow-on
MEP Leaders press conference. Developed
countries must first show leadership in order to
get the emerging economies to commit, he
insisted, noting that Brazilian officials have
privately admitted they will need to make
commitments, but will wait to do so until the end
of the process.

---------------------
CLEAN TECHNOLOGY FUND
---------------------

7. (SBU) Asked for the German view on the U.S.
proposal to establish a Clean Technology Fund
(CTF), Sach said he had heard that the April 12
discussions between Treasury U/S McCormick and
German Development Minister Wieczorek-Zeul had
been productive. Sach said Germany had initially
been concerned that recipient countries take
"ownership" in the Fund's governance in order to
avoid the appearance of conditionality.
Discussions are moving in the right direction,
Sach said, adding "there are no issues here that
cannot be overcome." Sach said Germany would
also like to see greater focus on supporting
adaptation funds already built into the UNFCCC.
Sach stressed that Germany does not oppose the
CTF and generally supports U.S. technology-based
initiatives. Sach requested additional
information to address perceived discrepancies
between President Bush's publicly announced
pledge for CTF of 2 billion USD and Congressional
allocations of only 100 million USD to date.

--------------------------------------------- ----

GERMANY COMMITTED TO 40 PERCENT EMISSIONS
REDUCTION TARGET
--------------------------------------------- ----


8. (SBU) Turning to domestic developments, Sach
said the Environment Ministry's decision to
abandon a planned increase in the unlabeled
blending mandate for bioethanol in gasoline from
five to ten percent (ref A) would not diminish
Germany's commitment to reduce its GHG emissions
by 40 percent over the 1990 base by 2020. The
share of renewables in fuel production will
increase from 6 to 14 percent instead of from 6
to 17 percent as previously planned. The three
percent difference will be made up for by
increasing the number of fixed power
installations (combined heating and power
stations). Sach noted a large portion of the
projected GHG emissions reductions would come
from increased energy efficiency. "The
perception is much bigger than the actual burden"
that will be imposed by Germany's ambitious

BERLIN 00000475 003 OF 003


reduction goals, he insisted.

9. (SBU) Sach insisted that German price
guarantees for solar energy are not technically
subsidies, because the German government does not
provide direct funding to users or providers.
Instead, the government guarantees prices for
solar-produced electricity that are higher than
electricity from other sources. Sach disagreed
that price guarantees are a type of indirect
subsidy but, when pressed, quickly changed tack
by arguing that German energy consumers hold
themselves to a "higher standard" and are willing
to pay more to fight climate change. Sach
indicated that Germany would pursue similar
initiatives to promote the development of clean
coal technology -- the German Government will not
fund the construction of physical plants, but
will fund research on storage and safety and the
development of an implementing framework.
Ultimately, Sach said, Germany prefers the
"polluter pays" principle, which avoids market-
distorting incentives.

TIMKEN JR.

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