Search

 

Cablegate: Senator Boxer Hears Positive Views On Carbon

VZCZCXRO5941
RR RUEHGI RUEHMA RUEHROV
DE RUEHLO #3338/01 2431219
ZNR UUUUU ZZH
R 311219Z AUG 07
FM AMEMBASSY LONDON
TO RUEHC/SECSTATE WASHDC 5157
INFO RUEHGB/AMEMBASSY BAGHDAD 0439
RUEHBUL/AMEMBASSY KABUL 0498
RUEHFR/AMEMBASSY PARIS 2989
RHMFIUU/HQ EPA WASHINGTON DC
RUEKJCS/JCS WASHDC
RUEKJCS/SECDEF WASHDC
RUCNDT/USMISSION USUN NEW YORK 0986
RUCPDOC/DEPT OF COMMERCE WASHDC
RUEHBS/USEU BRUSSELS
RUEHBC/REO BASRAH
RUCNFUR/DARFUR COLLECTIVE

UNCLAS SECTION 01 OF 02 LONDON 003338

SIPDIS

SIPDIS

E.O. 12958: N/A
TAGS: OREP SENV KGHG PREL UK IZ AF SU
SUBJECT: SENATOR BOXER HEARS POSITIVE VIEWS ON CARBON
TRADING; DISCUSSES IRAQ, AFGHANISTAN, DARFUR

REF: A. STATE 109658
B. LONDON 3093

LONDON 00003338 001.2 OF 002


1. Summary: Senator Barbara Boxer heard strongly positive
views from HMG, heavy industry and the investment community
on the UK,s experience with carbon cap-and-trade systems as
a tool for addressing climate change. Many of HMG officials
who handle climate change are new to their portfolios, and it
is not yet clear who will attend the September 27-28 Major
Economies Meeting (ref a). Discussions on Iraq and
Afghanistan with the FCO Minister for Asia, Africa and the
UN, Mark Malloch-Brown, (see paras 8-810) focused on
post-conflict support for Iraq from the UK, and the need for
more international support for Afghanistan. On an eventual
withdrawal of UK troops, Malloch-Brown said that PM Brown
understands his obligation to &do it the right way.8 On
Darfur, Malloch-Brown praised President Bush as a
&tremendous, tremendous leader.8

2. Senator Barbara Boxer, Chair of the Senate Environment
and Public Works Committee, had a series of meetings on
August 23-24 focused on climate change. She met with the
senior officials in the new Brown cabinet and with a variety
of private sector groups. She met Sir Mark Malloch-Brown,
former UN Deputy Secretary-General, who is the Minister for
Africa, Asia and the UN at the Foreign and Commonwealth
Office (FCO). His portfolio includes global issues such as
climate change and human rights. She also met MP Phil
Woolas, the new Minister of State for Climate Change and
Environment at the Department of Environment, Food and Rural
Affairs (DEFRA). Senator Boxer met London Climate Change
Services, which is a trade association of the financial
industry; the UK Emissions Trading Group, which is a trade
association representing industrial interests; and Climate
Change Capital, a private financial firm. End summary.

--------------------------------------------
Climate Change Seen as a Business Opportunity
---------------------------------------------

3. In Senator Boxer,s first meeting, DEFRA Minister Woolas
expressed the basic message that would recur throughout the
visit: aggressive engagement on climate change through
cap-and-trade programs is a business opportunity that creates
jobs and adds to, not subtracts from, GDP. Woolas said that
the EU Emissions Trading Scheme (EU-ETS) and other emissions
trading programs within the UK itself have &created an
industry8 of high-end environmental engineering firms,
environmental technology manufacturers and consultants.
Environmental protection, including emissions trading, &is a
way to make money,8 Woolas said, and has created 400,000
jobs in the UK. Separately, FCO Minister Malloch-Brown said
that carbon emission caps would &unleash8 technology and
investment.

--------------------------------------------- ------
Carbon Market Works ) Currently Low Price Proves It
--------------------------------------------- ------

4. Government officials, such as the Head of International
Emissions Trading at DEFRA Jill Duggan, industrialists from
Shell Oil, British Cement and BP, and representatives from
international financial players such as Goldman Sachs,
Merrill Lynch, NatSource and JP Morgan Chase conveyed a
consistent message that the EU-ETS carbon trading market
works. The legislation, rules, people and infrastructure for
carbon trading are in place, and carbon trading is now a
multi-billion dollar industry.

5. Dr. Bill Kyte from the Emissions Trading Group, an
industrial consortium that focuses on emissions trading
policy and communication, said that the simplicity, certainty
and transparency of emissions trading programs are paramount.
Financiers made the same point in a separate meeting. Kyte
noted that the effect of taxes is more opaque and more
difficult to adjust than a trading system. Kyte also
emphasized the need for &data, data, data.8 He promoted
early engagement on policy between government and industry at
the &pre-decision8 stage.

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

LONDON 00003338 002.2 OF 002


Learning by Doing8 Builds Capacity, Infrastructure
--------------------------------------------- -----

6. Lessons have been learned from early mistakes,
particularly an initial over-allocation of carbon emission
permits. The over-allocation has pushed the price down near
zero for the time being, but futures prices for carbon are
healthy, indicating the market is functioning and foresees a
greater demand, said Dr. Kyte from the Emissions Trading
Group. Both Dr. Kyte and DEFRA,s Jill Duggan said that
business and government had learned a tremendous amount from
the pilot stages of the EU Emissions Trading Scheme, which
Kyte called &learning by doing.8 Duggan said three years
of pilot program was too long; two would have been enough.
Financial representatives at a separate meeting noted that
carbon caps have to be &tough8 in order to send a price
signal at the beginning of the trading program that is strong
enough to encourage serious, long-term investors. Investors
also noted their preference for &linking8 carbon
instruments in various markets to promote liquidity, rational
prices and supply. Investors are concerned that a U.S.
carbon market would be &hermetic,8 unlinked to global
markets.

-----------------------------------------
Major Economies Meeting on Climate Change
-----------------------------------------

7. Although the FCO and DEFRA are aware of the September
27-28 Major Economies Meeting (reftels), they were unaware of
any decision on who will come from the UK. The Labour
Party,s annual conference, PM Brown,s first as PM, is
September 23-27, complicating the question of who attends.
Woolas and Malloch-Brown both commented that the formal
invitation had not yet been received through the EU,s
Portuguese Presidency. Malloch-Brown said that the meeting
is &a good signal8 that there is movement within the USG on
climate change, a sentiment noted in other meetings as well.

----------------------------------------
Other Issues ) Darfur, Afghanistan, Iraq
----------------------------------------

8. FCO Minister Malloch-Brown noted the Prime Minister,s
interest in &pushing the poverty agenda8 in Africa, and in
paying more attention to Asia. On Darfur, he noted that
things are looking better, especially because of the recent
15-0 Security Council resolution on Darfur. &Sudan
recognizes it must comply,8 he said. He commented that
Darfur is in part an environmental war. He praised President
Bush as a &tremendous, tremendous leader8 on Darfur.

9. On Iraq, Malloch-Brown said that the UK is committed to
make the post-war situation &work8 and noted the
responsibility of the UK and the U.S. for Iraqis who worked
with them. Iraq is a less pressing issue in the UK than it
is in the U.S., he added. On an eventual withdrawal of UK
troops, he said that PM Brown understands his obligation to
&do it the right way.8

10. On Afghanistan, Malloch-Brown said that &as the cloud
of Iraq clears,8 there is more focus on Afghanistan and what
he called the &collective international responsibility8 to
address Afghanistan,s reconstruction. It would be a &long
slog,8 he predicted.

11. Senator Boxer,s office cleared the content of this
report.

Visit London's Classified Website:
http://www.state.sgov.gov/p/eur/london/index. cfm
LeBaron

© Scoop Media

 
 
 
World Headlines

 

UN: As COVID Deaths Pass Two Million Worldwide, Guterres Warns Against Self-Defeating ‘Vaccinationalism'

With more than two million lives now lost worldwide to COVID-19, the UN Secretary-General appealed on Friday for countries to work together and help each other to end the pandemic and save lives. In a video statement , Secretary-General António Guterres ... More>>

Gordon Campbell: On The Washington Riot And The Georgia Results

Hong Kong and Washington DC. On the same morning, the tyrants in power in Beijing and their counterpart in the White House have shown how they refuse to accept the legitimacy of any different points of view, and the prospect of losing power… More>>

UN: Guterres To Seek Second Five-year Term
António Guterres will be seeking a second five-year term as UN Secretary-General, which would begin in January 2022.... More>>


UN Rights Office: Iran Execution Of Child Offender Breaks International Law

The execution of an Iranian man for a crime allegedly committed when he was 16 years old has been condemned by the UN Human Rights Office (OHCHR) and raised concerns over violations of his right to a fair trial. In a statement released on Thursday, ... More>>