For Immediate Release
May 31, 2007

Press Briefing by Tony Snow and Jim Connaughton, Chairman of the Council on Environmental Quality
White House Conference Center Briefing Room

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12:03 P.M. EDT

MR. SNOW: Welcome. As you heard just a few minutes ago, the President gave extensive remarks on international development and the international development agenda leading up to the G8. Among other things, he described his ideas that will be presented to the G8 ministers about the environment, and I figured the best person to answer any questions and all questions about it is Jim Connaughton, who is the Chairman of the Council on Environmental Quality, and the President's top environmental advisor, somebody who has been deeply involved in the crafting of this policy.

So without further ado, I will turn it over to Jim on this topic, and then we'll be happy to tackle all others afterward.

CHAIRMAN CONNAUGHTON: Thanks, Tony, and good afternoon, everybody. Today, in the context of the President's speech on development, he's announced our going forward strategy on the issue of energy security and climate change. I think it's important to note that this was in the context of the development agenda. The President emphasized some very important issues on education, on health, on good rule of law. Well, energy is also important to development, and he underscored the theme that in order to help nations grow and prosper, they need access to more energy. But energy carries environmental consequences, and so -- and we realized that, and so the issue is, how do we move forward with an increased use of energy, but to do so in an environmentally responsible way.

Part of that issue is the challenge of global climate change. Our understanding of the science has strengthened, and our understanding of the technology opportunities for solving the problem has also carried us forward with meaningful solutions.

So the President laid out a three-part agenda that he will be taking into discussions at the G8 next week, and more broadly independent of the G8, and the three parts are as follows. First, the United States is going to commit to help lead the way on the development of a new framework on climate change for the time after the Kyoto Protocol expires in 2012. We are going to bring to the United States the countries that represent the largest energy use and the largest emissions of greenhouse gases. In numbers, about 10 to 15 countries are responsible for more than 80 percent of energy use and greenhouse gas emissions. We hope to find consensus on the statement of a long-term goal for reducing greenhouse gases. That has not been done before collectively in the climate change process.

In addition to trying to find consensus, including with countries like India and China, on a long-term vision for where we want to be on greenhouse gases, we're going to work to develop, each country will develop its own national strategies on a midterm basis in the next 10 to 20 years on where they want to take their efforts to improve energy security, reduce air pollution, and also reduce greenhouse gases.

We will then bring together industry sectors. So imagine you have transportation, you have power generation, you have fuels, buildings. There are industrial leaders and NGOs who are very active in each of these sectors. What we want to do is get the representatives from those sectors in each country to see if they can come up with a common work program to share best practices, but also, we would anticipate they would set targets, too. This is an approach we used more recently in something called the Asia-Pacific Partnership on Clean Development and Climate that already involves China and India, as well as South Korea, Japan and Australia.

And then the final element of part one is that we will have a stronger program of measuring performance and making that very transparent so we can compare apples to apples on how we're doing.

The second part of the agenda is a broad agenda that involves all of the participants in the U.N. Framework on Climate Change -- that is 189 countries -- and it's to see if we can develop a common agenda around four main areas of emphasis. One is sustainable land use -- better forestry practices, better agricultural practices, and better thinking through our cities. We want to stop illegal logging -- that's a big problem, and we want to see if we can -- what we can do about halting deforestation.

Second is efficiency. All nations benefit from efficiency. If we're using energy more wisely, that's good for everybody. The third piece is technology sharing: How can we do more to bring technologies in the developed world and get them into the developing world?

The third component will then be an accelerated program on technology and advancement. The United States has already committed to significantly increase its investment in advanced clean energy technologies -- most notably, in the State of the Union announcement this year the President indicated how much more we were going to put into advanced biofuels, as well as other clean coal technologies and other technologies. We're going to call on other leaders to see if they can make similar commitments and get our research programs working together.

Another component will be to see if we can bring a greater priority in our international development banks, who have billions of dollars to lend out at a low-cost basis to see if we can bring a greater priority to clean energy investments by the multilateral development banks.

And then we're proposing two things -- one that's within reach. We have had several years of discussion on the elimination of tariff barriers and non-tariff barriers to the trade in clean energy technologies. This discussion has been going on for several years in the context of Doha. We are going to -- we want to drive to agreement on a schedule of eliminating these tariffs in the Doha round, which seems quite promising, and in any event, to do so by the end of next year. The sooner we can remove these tariffs, the sooner we can get a lot of commonly used technologies in America moving into the global marketplace.

And then finally, the U.S. government taxpayer dollars pay for a lot of research and development of new technologies. We often make that technology available to U.S. manufacturers at very low cost. We are proposing to extend that policy globally, that if the taxpayers producing new clean energy systems will make that available globally, as long as other countries make the same commitment.

So these are the elements of the plan. We hope to conclude this by the end of next year, so within 18 months to have this new framework established. And the President will be bringing these ideas to the G8. Now, these ideas are going to build on the solid foundation that we now have in America of a whole system of new regulations that will help us deal with energy security and climate change, a system of more than $10 billion in tax incentives and innumerable technology advancement partnerships, as well as what you heard, again, this year in the State of the Union, our desire to replace gasoline use by 20 percent in the next 10 years, which should also help us halt the growth of greenhouse gas emissions from passenger cars.

So these are the kinds of things we're going to be bringing to the table. This is very consistent and closely in line with the thinking of Prime Minister Blair and Chancellor Merkel, who have laid the foundation for some of this work in Europe. And we also know that there's interest in many of these countries in light of the Asia-Pacific Partnership, where we've gotten the conversation started already. So we're off to a moving start; we're not starting from square one on this.

So, happy to answer your questions.

Q Will the new framework consist of binding commitments, or voluntary commitments?

CHAIRMAN CONNAUGHTON: It will move similar to the current system, where -- in this instance, you have a long-term aspirational goal that sends a clear signal that we want significant reductions in greenhouse gases. And then what we're calling on is that each country will develop their national strategies for the first phase of trying to meet that goal.

In those national strategies, I'll give the American example. We now have mandatory fuel economy standards, and those are binding. We have mandatory renewable power standards at the state level; those are binding. The President has called on new fuel standards and new auto-efficiency standards. Europe is doing the same thing. They've got sort of a European direction, but each of the European member states sets their own binding national programs.

But also we anticipate it will include technology commitments by sectors that don't require regulation. And those are just good, old-fashion market agreements. And then we think there will be incentives involved, as well.

Q Now I'm confused. Does that mean there will be targets for greenhouse gas emission reductions and that everybody will be making binding commitments to each other about greenhouse gas reductions -- or, at the end of the day, are those just voluntary commitments?

CHAIRMAN CONNAUGHTON: The commitment at the international level will be to a long-term aspirational goal --

Q Voluntary.

CHAIRMAN CONNAUGHTON: Well, I want to be careful about the word "voluntary," because we do these kinds of goals all the time, international agreements. It's the implementing mechanisms that become binding. And in this instance we are expecting that each nation will make a commitment to a national program strategy to achieve this.

I'll give you the example. We do the same thing in fisheries. We set a goal for a fishery, but that has to be carried out through national legislation. That's where it gets its binding characteristics. There's a lot of misconception about what's binding and what's not binding. The issue is you agree on goals in the international process; you implement them through national strategies that include binding measures.

Q But you couldn't really do that internationally, anyway. I mean, you couldn't make it binding through international --

CHAIRMAN CONNAUGHTON: There are some international agreements that you bring in a structure that can be enforced, sort of mutually enforced. That has not been utilized in the context of climate change in the past. And it's just challenging because you're trying to deal with big economic issues. If you're dealing with --

Q Why not do that with climate change?

CHAIRMAN CONNAUGHTON: Because where the rubber meets the road on climate change is the effectiveness of the national strategies and the commitment of countries to actually carry them out.

I'll give you an example. China has made a national commitment to improve the energy efficiency of their economy by 20 percent by 2010. That's a very consequential commitment. They're going to achieve that through a wide array of programs. Some of them are quite dramatically regulatory. That's exactly what we'd like to see China do, but they retain sovereignty -- they get to decide on the right mix, rather than us telling them what the mix should be.

Q Chancellor Merkel has made clear that she wants to use next week's G8 summit to forge a consensus on climate control. Now the President wants to call a summit, but later, on the same issue. Doesn't this effectively undercut her effort and put the process off further to the future?

CHAIRMAN CONNAUGHTON: Actually, it's the inverse of that. We've been having a lengthy discussion -- you'll see a text on climate change and energy security that will be longer than 20 pages, and what we're trying to do is reach closure on the broad elements of that. We've had some disagreement over a few issues, but this will actually bring closure on the core of what we can agree on, and that's what Chancellor Merkel is trying to achieve, a situation where the G8 has a sense of how they want to develop a framework, but we are doing it in a way that will also be attractive to large emerging economies, like China and India and Brazil. That's our real challenge -- the G8 is already moving in a common direction; how do we bring these other countries on board.

Q I'd like to go back to the example you just cited of China, for example. If they were to set their own goals, which would be binding within their own system, if they do not hit it, what's left for others to do about that? What's the price?

CHAIRMAN CONNAUGHTON: Well, what we do is similar to what we're doing now, is we put in a system of measuring progress. We work with the Chinese -- one is to understand why they didn't hit their mark. There are some goals that you try your best and the technology doesn't come along, there are other goals you try your best and technology comes along a heck of a lot faster than you thought, in which case you can ramp down your goals. We do the same thing, for example, in the Montreal Protocol on ozone depleting substances -- we break it out into air conditioning, we break it out into cleaning electronics, aviation. And each country has set its own strategy for how to do that. Then we take it back to the international process and make sure we're making the progress we want to make. This is a marathon, it's not a sprint, and so there's lots of stages to getting to this long-term objective. So we shouldn't lose sight of the fact we want a constructive outcome, where each country is really bringing home to their own domestic circumstances a message of progress that will take hold.

Q The President and you have both again emphasized the development of biofuels, but at the same time, the oil companies say that that focus has them questioning the feasibility of improving refineries and building new ones, thus the higher prices. So what's the balance, what's the answer?

CHAIRMAN CONNAUGHTON: I think your question is answering itself. We need to find a balance, but the President is very adamant that we've got to make faster progress on improving our energy security through the application of new technology. We've done a lot of internal work in the administration to see just how far we can push the envelope on bringing the second generation of biofuels online.

Now the way that happens, though, is you then get Europe to pursue similarly ambitious goals, you get the developing world to pursue similarly ambitious goals, then all of a sudden the market jumps in and you get a lot more investment, like we're already seeing on corn ethanol. And we expect with this much more ambitious mandate the President set you're going to see a huge push by the private sector of these second generation fuels. When you have the second generation fuels, you then get the second generation vehicles to use those fuels.

So it's part leadership and setting a very aggressive goal, but then it's also being sure that you're responsive to the pace of technology. We believe we will be successful. If we're not, we're going to have to take stock on our way to meeting the goal to see if it requires some adjustment.

Q So in the short-term, then, should the oil industry then just not do anything about its aging refineries; let the status quo on that and let the prices just keep going up?

CHAIRMAN CONNAUGHTON: The President has emphasized we actually need more of everything. We need more renewable fuel, we need more domestic supplies of oil and gas for energy security, we need a strategic petroleum reserve that gives us the security against a major supply disruption, and we need more efficient vehicles, and we need to alleviate traffic congestion that massively wastes fuel. We need to work on every aspect. There's no silver bullet to the energy security equation, just like there's no silver bullet to the climate change equation. We need it all. And those who suggest there's one approach versus another, they're not facing reality.

Q And no silver bullet to the prices, right?

CHAIRMAN CONNAUGHTON: No silver bullet to prices. But markets work, and if you're sending clear signals, the markets will respond. And you're already seeing a significant investment and more joint ventures between oil companies and farmers, between livestock producers and technology providers. So we're already seeing, with these high gasoline prices we're experiencing, a lot more interest in the next generation. If global leadership backs that up, it gives the confidence to the markets to respond.

Q You, specifically, in the past couple of days rejected Europe's proposal to set specific limits -- a degree increase beyond which we would not go -- presumably because you felt the world could not meet this without economic penalties that were unacceptable. Do you believe that Europe can meet the goals it has set? Do you believe it has achieved the reductions it claims over the past -- since the passage of Kyoto?

CHAIRMAN CONNAUGHTON: Well, first of all, we have actually disagreed with one aspect of one piece of this 22-page agreement, and that's the European -- the recently established European goal to commit to a temperature outcome. We don't think that's a very practical approach -- leaving aside other issues with trying to state your goal on temperature. You can't manage the temperature. You can manage to -- emissions. And so that's what the President is talking about. Let's figure out what quantity of emissions we want to try to reduce by by a certain date.

And there's lots of different ideas on that, by the way. Europe doesn't have the lock on this. Europe has one goal they think it should be; Japan has stated a slightly different one; Canada has stated it still differently again. So we want to bring all these -- this ambition to one conversation.

On the second part, how are we doing? The President did highlight in his speech today that we got a flash estimate for '06 where the United States actually had a net reduction of greenhouses gases of 1.3 percent during a period when we had economic growth of 3.3 percent. That is a remarkable outcome. Now that's as a result of reasons intentional and unintentional. The unintentional are, we had cooler summers and warmer winters. The intentional are, we have a lot more clean power coming on line, and with the huge new investment in new manufacturing and more productive manufacturing in America, we're getting more efficient production. So we're getting more output with the same or slightly increasing amount of energy. So there's always going to be a mix.

Europe -- some countries in Europe, like Germany and the U.K., have made very significant strides in reducing their emissions. But if you look at the period since we took office, so since January 2001 -- we have international data through the end of 2004 -- the U.S. saw economic growth of about 10 percent while our emissions went up only about 1.6 percent. In Europe, they had economic growth of 8 percent while their emissions went up 5 percent, not down. It's always going to go up and down, and so you can't pick any one moment in time to gauge your progress. As I said, this is a marathon, it's not a sprint. We want to see what the overall trend lines look like.

John.

Q Will this administration consider mandatory emission caps? And why would Europe and the other nations want to take part in these talks if they're already discussing long-term global emission talks that do include mandatory caps?

CHAIRMAN CONNAUGHTON: Well, the President has supported a portfolio of policies that includes mandates; it includes very significant tax incentives and includes these technology development partnerships that I discussed. So we think we should have a mix.

We've been very concerned about cap and trade proposals, which is what you're talking about, largely on the grounds that they have tended in the context of climate change not to work very well. What you want is a policy that gets investment in new technology, that produces a real reduction. What we're seeing, though, is if you have an unreasonable cap on your emissions that's impossible to comply with as a matter of technology, you end up going overseas to try to purchase reductions someplace else.

Well, if your partner overseas doesn't have a cap, his incentive is to make more of what you're trying to buy, rather than make less of it. And so we're seeing a dramatic increase in emissions overseas. So it does you no good to cap your emissions here if it's going to lead to an increase in emissions someplace else. We just have to be thoughtful about this. This is not a dogmatic issue, it's a what's the practical policy that gets you the technology investment you think is going to provide a lasting solution.

Q How are you going to bring India and China on board on this?

CHAIRMAN CONNAUGHTON: Well, we're going to build on the foundation of the Asia-Pacific Partnership. We have found that if you approach India and China on what matters to them, which is energy security, lifting their people out of poverty, and finding ways to clean up their power sources -- and they have choking air pollution. You can also get them onboard with an aggressive greenhouse gas management approach.

It is also the case for China and India, if you make the conversation more practical, they want to know how to get more power out of less fuel. So how do you make power generation more efficient? That's something they want to talk to you about. And by the way, when you do that, they'll set targets, and they'll set targets with real timelines.

If you're having a big esoteric discussion about a broad agenda that you haven't actually laid out a real plan to achieve, that's where they begin to get nervous. Why do they get nervous? Because they're afraid it's going to impose a constraint on their growth, and a constraint on their growth means fewer people coming out of poverty. So we just have to respect that they're in a different place than we are, but we want to see if they can take a stride with us together.

Q Could I follow up on that?

CHAIRMAN CONNAUGHTON: Sure.

Q They have representatives at G8 -- they're not G8 members, but they have representatives at G8. Have you talked to them? What's been the reaction to this? Are they ready to sign up?

CHAIRMAN CONNAUGHTON: We've had discussions at very high levels and the President, himself, has spoken directly with a number of the world leaders to whom we'll be proposing this, one on one, either by telephone or in person. There is a strong interest on finding a common way forward. And I think that's even different than five years ago. There is a strong interest on trying to design practical strategies that are based on technology. And so that's good.

And so as long as we are focusing the conversation on global trade and clean technologies, that's a really solid ground to build on. They also are beginning to be more comfortable domestically in their own countries in setting goals and educating their population on those goals. So we want to draw that forward.

So I'm looking forward to a very constructive G8 outcome. But what's more important than that is the conversation that occurs where everyone is on equal ground. The G8 is the G8. They've invited five countries; they're not members of the G8. So that's what the President wants to do -- he wants to create neutral ground where China and India are on the same ground the United States and Europe are on, to have this discussion at a very high level.

Q What do you say to those who point to the G8 and say, look, there was a plan on the table, you could have had an agreement there, and what you're doing today effectively kicks the can down the road until the end of the President's time in office?

CHAIRMAN CONNAUGHTON: Actually, it's the opposite of that. We're very close to an agreement in the G8, rather than not an agreement. And the other thing is, if you wanted to kick the can down the road, you would actually run the basic U.N. process, where they meet at the end of this year, they meet at the end of next year, they meet once a year for the next five years.

What we're doing instead is saying, no, let's speed up the clock, and in the 18 months, see if we can get agreement on the basic elements of this framework. If you do that, then the U.N. process actually has something to chew on. If you stick with the current approach, what happens is everybody goes back to their corners. So everyone is kind of in a safe place under the U.N. process. Those who are in the Kyoto Protocol like where they are, those of us like Australia and the United States that aren't in it, we're happy where we are, and we end up just basically restating our classic lines.

We're trying to create a new conversation, and the product of that conversation will be brought into the U.N. process with several years to go before Kyoto expires.

Q Would you expect the G8 -- or hope the G8 will endorse this proposal as it stands, that you're making today?

CHAIRMAN CONNAUGHTON: Well, we're bringing these ideas to the G8. So what we would be hopeful is, in large measure, the proposal will work its way into the G8 agreement. And why are we hopeful? Because this is a construct that the President has been talking about for years, with Tony Blair, in particular, and that we've introduced now that Chancellor Merkel is leading the G8, and ongoing discussions with Prime Minister Abe in Japan and Prime Minister Harper in Canada. So we're not starting from scratch here. This is the -- this isn't something out of the blue, this is the culmination -- at least even in my recent involvement -- of five intensive months of trying to figure out what matters to everybody and see if you can give it a shape that will bring some consensus. What the President is trying to do here is find that consensus that will allow for forward progress.

Q Why did it take six years since the President pulled out of Kyoto to come up with an alternative international framework?

CHAIRMAN CONNAUGHTON: Well, actually, in 2002, the President set a 10-year national strategy that included reducing greenhouse gas intensity of our economy by 18 percent, and added a whole series, dozens of programs underneath of that, some of which I've described already.

At the same time the Kyoto countries were busy designing their national strategies to meet Kyoto. That's taken us a few years to get experience with what's working, to get experience with what's not working. So that's number one.

Number two, we now have five years of experience of a whole series of new international technology partnerships -- fusion for the long-term; civilian nuclear -- we have a big group around nuclear; we have a group that's working on how to produce power from coal with no emissions. That's got almost 20 countries involved in it. So we created these international technology partnerships. So when you ask why, the last five years was about building out our base of experience, as well as the funding for a lot of these efforts.

It is also the case that the science progress -- the scientific work has gone forward. As the President indicated in his speech, we understand a lot more about the science. We have a heightened concern about the observed and projected impacts of future climate change, and so that drives us to the next step, as well.

The other piece is, we're five years away from Kyoto, so we want to get the groundwork laid so that we've got a good plan in place for when Kyoto expires. And that just takes some planning. So all of that is the "why now."

In the back.

Q Jim, you seem to suggest that those who are insisting on the cap and trade are dogmatic in their approach. Is that your guys' opinion on this?

CHAIRMAN CONNAUGHTON: No, because in some countries a cap and trade, under certain circumstances, can be an effective instrument. It is proven in the context of climate change to be much more subject to manipulation than anyone thought, and it's not driving the technology advancement that we would want to see. Now, some countries are content to use a cap and trade just to drive additional efficiency investments. From the American perspective, that's a problem because efficiency is good in the near-term, but China is going to use four times more coal than we will by 2020. And so if we don't figure out how to get the technology that's very expensive on coal to a point where it's low emissions, you can do all the efficiency you want and you're not going to affect long-term temperature trends.

A cap and trade does not deliver that investment. Why? Because that's expensive. The same is true of alternative fuels -- they're expensive, they're not cheap. And the cap and trade programs go looking for cheap reductions. So you have to find that balance and it's going to differ from country to country.

Q You have talked about the medium term as 10 to 20 years. So what, in your vision, is a long-term -- in other words, when will we see the world actually cutting greenhouse gas emissions, as opposed to simply slowing the growth?

CHAIRMAN CONNAUGHTON: Well, I think in the next 50 years you'll see a combination of both. For example, industrial greenhouse gas emissions in America have been flat or below their 1990 levels since 1990, even though our manufacturing output is way up. In America, we've had an absolute reduction in methane emissions, a significant reduction in methane emissions. Some European countries have already been able to achieve a net reduction of emissions. But the demographics in many of those countries, they don't have growing populations, they have a different fuel supply.

So you have to look at each country's situation individually. China and India, it's very clear in the near to midterm, that their ambition is to slow the growth significantly. But it is conceivable over a midterm that a number of countries can make real strides in reducing their emissions.

This is the hard conversation we have to have: What does that look like? How do we set a reasonably ambitious long-term objective for a net reduction? But then understand that some countries are going to be starting with intensity; others are going to be driving toward net emission reductions.

Q But your long-term goal is net worldwide reductions 50 years from now?

CHAIRMAN CONNAUGHTON: A number of the proposals from countries have focused on 2050 as the date. I've also heard ideas for staging at 2050, 2075. We don't want to prejudge that conversation, because it's better to get a lot of thinking.

I'll give you a different one. I've heard some saying, well, shouldn't we have a long-term technology objective? So one country has suggested, shouldn't we say we want coal to have this level of low emissions by this date? That's also a plausible approach.

So the point of the next 18 months is to put all those on the table and see if we can bring them together into a common vision.

Q Can I follow up again. So if other countries are putting their goals on the table, what is the United States' vision of what long-term means? Is it 50 years from now?

CHAIRMAN CONNAUGHTON: We are in a very active discussion about that internally, and we're in an active discussion on that with the Hill. And Congress has a voice in this process, as well, and I've seen a dozen different visions of what a long-term goal might be in Congress. We want to take the next 18 months and see if we can find common ground on that.

Q You mentioned 2050, and that the Prime Minister of Japan that set out the plan that cut greenhouse gas emissions in half by that date. So is this something that -- you mentioned it was plausible -- that the President supports?

CHAIRMAN CONNAUGHTON: Again, I don't want to prejudge the outcome of the next 18 months, because also this is an area of particular sensitivity for the major emerging economies -- like China, India and Brazil. We want to take the time to work through the plausibility of this -- is it reasonably ambitious, and whether it fits within their own vision or their own national future. That's not something you plop in front of them, and say, will you agree to this tomorrow? They are big, sovereign countries, just like we are, and we should respect their bigness and we should respect their sovereignty.

Q How did the -- proposed by President Bush today fit in with Bali? Is it meant to supplement, to reinforce Bali or to replace it?

CHAIRMAN CONNAUGHTON: It will run in parallel with and reinforce Bali.

Q You've mentioned a couple of times the "strengthening science." What, specifically, do you mean by that? And does the administration now accept that there really isn't a scientific debate about the human impact on global warming?

CHAIRMAN CONNAUGHTON: Well, I want to disagree with the predicate of your question. In 2001, the President made clear, after commissioning a report from the National Academy of Sciences, that the earth is warming and humans are largely -- are a large part of the problem, and he's been consistent about that since the beginning. That is still misinterpreted broadly, so I need to start there.

Since 2001, the IPCC, which is this international panel that looks at all the scientific literature, has a higher level of confidence of the long-term temperature trend, and they have a higher level of confidence that there is a significant human contribution to that. So that has strengthened.

We also have much better data on observed impacts, such as ice melt on land masses that can lead to sea level rise. That is occurring faster than we thought in 2001. There's then still a lot of work underway about sort of long-term projected impacts, but that is also giving us a sense of what some of those could look like. So this is a step. We've taken a step forward from 2001. We have more information, and we're acting on that information.

We still have a lot of science to do. We spend almost $2 billion a year on science, and none of the scientists would say we're done yet. So there's still many questions that we're working on, especially regional impacts, how temperature trends really affect things in Chicago or in South America. There's a lot of work being done there yet, and the scientists are busy about it.

Q But is it safe to assume that as the Europeans ratchet down their cap that more investment, more capital will go into actual reductions there?

CHAIRMAN CONNAUGHTON: They're in the process of designing the next phase of their system, and they are now actually -- it's a laboratory confronting some of the really problematic projects that took place under the first round of their cap and trade system. And I would note, by the way, their cap and trade system is limited to power production and large industry. They don't have mandatory requirements on cars, they don't have mandatory requirements on their farmers, they don't have mandatory requirements on people in their buildings.

So in the narrow cap and trade system that they do have, they've seen a lot of money, a lot of euros go overseas to projects that most would agree are somewhat questionable. Some of them work. So we'll have some that work, some that don't work.

Looks like we're getting --

Q Can I follow on Kelly's question for a second? Are you familiar with the comments that Michael Griffin, NASA's administrator made to NPR, "I'm not sure that it's fair to say" -- he says global warming exists, but, "I'm not sure it's fair to say that it's a problem we must wrestle with." Does that reflect the general feelings of the Bush administration?

CHAIRMAN CONNAUGHTON: I think the President has made clear his general feelings for himself and the administration. And it goes all the way back to 2001. This is a serious issue, it deserves a sensible response, and -- just look at his speech today, but also look at the State of the Union.

Q Are you familiar with those comments?

CHAIRMAN CONNAUGHTON: I read about them today just as you did.

Q What do you make of it?

CHAIRMAN CONNAUGHTON: The President is committed to this issue, he's committed to a sensible response, and he's committed to doing it in a way that brings advanced energies globally to lift people out of poverty. We get lots of benefits in terms of climate, lots of benefits in terms of health, lots of benefits in terms of economic prosperity. So we're dedicated to action. And in fact, I think the conversation has really moved beyond a statement of the problem, and we're really, really focused now, finally, on the broad effort on solutions. And so that's where we'll take things.

Q I have one more --

Q May I follow --

CHAIRMAN CONNAUGHTON: John.

Q If the United States will not accept mandatory emissions cuts without developing nations like China and India signing on, what new specifics are the United States -- is the United States prepared to offer to try to make that happen?

CHAIRMAN CONNAUGHTON: Again, the premise of your question is off. The President, in his State of the Union address -- just to give one example -- has called for a mandatory program to replace 20 percent of our gasoline usage with alternative fuels and through vehicle fuel efficiency. So we do believe that mandatory approaches can work if you design them well to achieve a particular objective.

Now, by the way, that is stated in terms of alternative fuels, but it's going to give us a huge greenhouse gas reduction. There's this fixation on a one-size-fits-all approach. The reality -- and I don't care what country you're in, whether you're in the United States or Canada or the U.K. or Japan -- the reality is, every country, when you see what they're actually doing, is pursuing a portfolio of strategies: mandates, incentives, technology advancement, industry leadership. We're going to continue to do that. So thank you all very much.

MR. SNOW: And if you have further questions on this, I'll refer you back to Jim and you can ask other stuff.

Okay, other questions. Goyal.

Q Tony, two quick questions. One, I wanted to ask this in relation. As far as India-U.S. civil nuclear energy agreement is concerned, U.S. Ambassador Mulford in Delhi said there are some hurdles. And also a lot of talks have been going on. And with this agreement India is supposed to have clean energy, and I agree that everyone should move forward. What I'm asking you is what's going on, because two congressmen have written a letter to the Prime Minister of India that two Indians were arrested here in connection with some sort of supplying some nuclear technology to India. And also, what I'm asking you is, is this something -- this has to do with this agreement, or when next week the Prime Minister of India meets with President Bush at the G8, you think they will come up with this final agreement?

MR. SNOW: I can't give you a sense on the final timing, but the government is clearly committed to it. We understand that the civil nuclear agreement not only is important, but it's also a template for dealing with other countries. One of the things we think is important for people to recognize -- and Jim was just talking about this in the context of technological improvement -- is you've got nuclear power, which is clean, you don't have greenhouse emissions. It offers an opportunity to give people the prospect of economic growth without the kind of pollution that has caused environmental concern around the globe.

So, look, anytime you have an agreement this big and this ambitious, you're going to run into some technical issues that make progress a little more halting than you'd like it to be. But we're still committed to its success.

Q Can I follow on the immigration. As far as the immigration reforms -- has been committed to go through this immigration bill, now or never, like Washington Post and others are saying. My question on immigration is that if President is in touch with some of the advocates of immigration, because --

MR. SNOW: He's in touch with who?

Q Immigration advocates like lawyers -- immigration lawyers are saying that there are too harsh conditions, including the payment, how they will pay, these illegal immigrants. And there is a lot of anti-immigrant lobbying in the media. So how we can overcome this --

MR. SNOW: Well, two things here. Number one, if you take a look at the way this bill has been put together, you've got Democrats and Republicans have spent a long time looking at it, and you're talking about people -- among other conditions, they have to maintain continuous employment. And so we do not believe that a $1,000 fine at the front is unreasonable. Many people pay far more than that to get snuck into the United States -- or have in the past.

And secondly, that a $4,000 fine plus application fees is unreasonable -- keep in mind, applications fees are larger than that anyway, Goyal. As for the second, you've made sort of a large characterization about people's views and I'm just not going to get into that. That's too non-specific, and also, frankly, too incendiary.

One of the things we hope to do in this immigration debate is lower the temperature and get people to talk about basic principles. You've got to acknowledge, A, that there's a problem; B, a lot of folks are concerned especially about the presence of 12 million illegals, so what do you do about it? And we've articulated principles that we think can really command a lot of support among Democrats and Republicans and the public at large.

Number one, take care of the border, get it secure. Number two, make sure that you restore respect for the rule of law, and you do that in a whole series of ways, including, as I just mentioned, saying to those who came here illegally, the first thing you've got to do is admit you broke the law. Even though the 1986 legislation had no penalty for crossing illegally, you pay a thousand dollar fine up front. And then there are a whole series of other conversations of how you follow.

Third, citizenship. It's not something where you get a coupon that says, well, welcome to America, you're a citizen now. But, instead, it's something that's earned through good behavior and constructive contributions to American society, and embracing the culture and the language.

So all those I think are areas around which people can rally. And that also transforms the nature of the debate into one that's very practical: how do you get the job done? And so we continue to look forward to working with folks and we understand that it's an area that arouses a lot of passions. But on the other hand, once people have a chance to step back and look at these first principles and look at the overall goals, we feel that we can create an atmosphere where we're going to get some progress and constructive action.

Peter.

Q Tony, Judge Walton today decided that he will release the letters that were written in the Libby case. When --

MR. SNOW: These are the letters -- by background -- on behalf of Scooter Libby, these are -- yes.

Q On behalf of him and those who weighed in, saying that he shouldn't have a stiff sentence. When they are released, will we find out that the President and Vice President wrote letters?

MR. SNOW: Well, I think you'll just have to wait and see. I actually do not know who wrote letters, but we'll all have an opportunity to see them.

Q You don't know whether the President --

MR. SNOW: No, no, I really don't.

Q How will the sentencing affect the White House's consideration of a pardon?

MR. SNOW: Well, again, you continue to try to get us to discuss what, even at this late juncture, even though you've got sentencing coming up, is an ongoing legal concern and I don't have comment and can't.

Q Thank you, Tony. Two questions. Syndicated columnist and university professor Walter Williams has noted that the United States successfully deterred a nuclear attack for decades during the Cold War by promising a massive nuclear retaliation for an attack on the United States, as was done by President Kennedy in the Cuban Missile Crisis. And my question: Does President Bush have the same commitment if Iran or any other nation unleashes a nuclear 9/11 on us?

MR. SNOW: I don't know if you missed it, but we're spending a lot of time working on preventing Iran from having that capability. It is the subject of ongoing conversations in front of the United Nations Security Council. The International Atomic Energy Agency is in the game, as well. So it is our aspiration to make sure that that does not become a problem we have to deal with.

Q My question was --

MR. SNOW: I know, but your question is based on a hypothetical, and I'm not accepting the hypothesis.

Q Okay. In Georgia, the President declared those determined to find fault with this bill will always be able to look at a narrow slice of it and find something that they don't like. But Chairman Bilbray, a Republican of California, said amnesty for 12 million to 20 million illegal aliens -- immigrants isn't a narrow slice, Mr. President, it's the whole darn pie. And my question --

MR. SNOW: Well, and again, I think --

Q And my question --

MR. SNOW: Oh, I'm sorry.

Q What is the President's response to this and to Republican -- another Republican, Congressman Bill Sali, who said, "I can safely say that the number one issue with my constituents is immigration, which is no small slice of pie"?

MR. SNOW: Yes, and on the other hand -- let's take a look at two things. There's no amnesty here. Right now a lot of times "amnesty" is used as shorthand for saying, we don't like the bill. Let me put it this way, Les. If you look up the dictionary definition of amnesty, it means total forgiveness of a crime. What you have here is a crime for which there was no punishment originally. Now what we're saying is everybody who came across the border, number one, you pay a thousand dollar fine. Number two, you are on permanent probation. If you break the law, you're deported. If you do not maintain a job, you are deported. If you do not learn the English language, you're deported. If you do not subject yourself to a criminal background check, you're deported. If you do not have an ID that allows us to trace who you are, where you are, for whom you work, you are deported.

In other words it sets up a very strong series of tests, A, for people who want to remain on American soil. And then if you wish to become a citizen, you have to start with the $4,000 fine, you have to start with a $1,500 application fee. There's also conversation about paying back taxes.

Now, I defy you to say that that is something that simply says --

Q You define me?

MR. SNOW: No, I defy you -- you're indefinable. (Laughter.) But the fact is, Les, that's not amnesty. As a matter of fact, what it is, is the most strenuous and arduous test of people's willingness to step forward, to demonstrate good behavior, and to demonstrate an embrace of the culture in the history of the United States of America. These are people who would not be able to have access to the welfare system. These are people who must contribute, who must be paying taxes, who must be having a constructive contribution to the United States of America over an extended period of time, having paid fines that were not in the law when they came here, and will be, in fact, forced to do what one would expect to be good guests.

Q What percentage of the illegal aliens do you think are going to go through all of that?

MR. SNOW: Well, the percentage --

Q If they were illegal to begin with, what percentage do you think are really going to go in for all of that?

MR. SNOW: All of them are going to have to, Les. That's what the law says.

Q You don't estimate how many will.

MR. SNOW: What you estimate is that you're putting together a system where they're all going to have to. And furthermore, you create mechanisms where those who are going to try to harbor them and those who are going to try to employ them illegally are now subject to fines. The original fine for somebody who knowingly hired an illegal was $250. Now we are talking about fines depending on the piece -- the sort of amendment under discussion that range from as high -- the high level of $25,000 to $75,000 per employee. In other words, it breaks the company.

So these are serious sanctions, and therefore very serious incentives for people not to be harboring folks.

Q Thank you.

Q Tony, we heard just now about the efforts on climate change dating back to '01 in this administration. Why did the topic not rate a State of the Union message until this year?

MR. SNOW: Well, the fact is, whether it rates a State of the Union message, most of the State of the Union messages have been targeted toward significant themes, many of them, quite understandably, about the war on terror. On the other hand, if you take a look at administration policy, it has been aggressive. And you take a look, as Jim was pointing out, carbon dioxide intensity or greenhouse emission intensity has gone down. We've got a better record than the European Union.

Now, the fact is that this has been a very aggressive administration, in terms of financing the science, in terms of looking at alternatives, and in terms of taking the lead when it comes to climate change science and climate change activities, and I invite you all to take a look at the record in totality, because we continue to hear, well, when is the President going to admit that climate change plays a role? We've read the quote out to you many times from June of 2001. So it has, in fact, been a central precept of administration environmental policy from the get-go.

Q Does it remain a fundamental difference, though, the U.S. versus Europe on technology versus regulation?

MR. SNOW: No, I don't think so. And that's why -- what Jim was talking about is you've got a statement that will be put together at the G8, it's more than 20 pages. And Angela Merkel is the Chairman of the EU, obviously is chairing this and she's got a keen interest in it. Tony Blair and the President have talked about this. And what you have to be able to do is to craft approaches that are going to allow nations to use their own best practices to put together the resources necessary to clean the air, clean the environment, and at the same time, keep their economies growing.

So this is in no way inconsistent with the general trend and tenor of the conversations. Look, it's going to be an interesting, but I think a very constructive debate. I know there's a tendency to look at this as kind of a showdown, and I think that would be a mistake in perception.

Q To quickly follow on a couple questions that came up -- this sounds like the message today is this meeting next week is fine, but it's not the time for making final decisions; we need to have some big meetings.

MR. SNOW: No, I don't think so. What it says is we have been having a series of big meetings and what you have to do is prepare for life after Kyoto. This is -- you've got the Kyoto Accord where a number of nations say that they're going to stay under Kyoto until 2012. Well, you're going to have to start thinking toward the future. What the President is saying is, let's not wait until the last minute, let's start working on ways forward. There are other nations that have not met their Kyoto targets and have made it clear that they're never going to meet their Kyoto targets, so what do you do that -- how do you put together a policy that, in fact, is something that is going to be politically successful in those countries, economically successful and environmentally successful?

This is a very practical exercise in setting ambitious goals and also trying to bring to bear the technology to do it. In addition, it provides a way to bring on board India, China, developing countries that were not part of it before and, in fact, are increasingly contributors to the problem of carbon emissions and global warming. And as a result, if you can come up with that, that's a very significant advance in the overall global strategy for having a cleaner environment.

Q Thank you. Tony, why is the President inviting Putin to Kennebunkport, rather than Crawford? And will Bush 41 talk with Putin about progress between these two countries? What is his relationship with Putin?

MR. SNOW: Well, first, his relationship is personally good, it is honest, and they understand that the countries have differences. The answer to your first question is, if somebody asked you, Sarah, where would you rather be in July of 2007, Crawford or Kennebunkport -- (laughter.) All right?

Q Devastating answer. (Laughter.)

Q There's some concern that we're reviving the Cold War by putting missiles in the Czech Republic and Poland. And what is the rationale really of putting missiles in at that point --

MR. SNOW: I'm glad you asked the question, because it's the opposite of a revival of the Cold War. The Cold War was a face-off of weaponry where you had the doctrine of Mutually Assured Destruction, where the United States and NATO are facing off against the Soviet Union and the Warsaw Pact, and there was this notion that you had the overwhelming force of arms, and therefore, the prospect of a nuclear exchange was too horrible to contemplate.

This is, in fact, a way of trying to -- what we're trying to do is to take a look at an emerging world where you do have the prospect of rogue nations with nuclear weapons, and the ability to deliver them. How do you protect your allies? This is -- this is in the nature of defensive systems designed to protect soil.

Q You mean Poland and the Czech Republic would be attacked?

MR. SNOW: It's possible. Absolutely. And the fact is, you have the -- you have the prospect of nations within a certain amount -- if you take a look at the development of intercontinental ballistic missiles, and as various nations are approaching them, rogue nations, you have the ability to hit a wide swath as far away as London. So, yes, it is a possibility. And so you hold that as an opportunity. It is not -- this is not designed as an act of aggression, but, in fact, defense, and those are the kinds of conversations we've been having with the Russians, and we'll continue to.

Q A moment ago, you were comparing the United States' voluntary attempts to reduce the growth rate in greenhouse gases, versus Europeans' mandatory attempts to reduce actual numbers of greenhouse gases. Is this essentially an attempt to replace the Kyoto talks with what happens after 2012?

MR. SNOW: No, I think this is an attempt to come up with a follow on to Kyoto, because you still have to figure out what happens after 2012 when Kyoto ceases to be in effect.

Q But there are discussions right now about the post-2012 process --

MR. SNOW: Yes, and this is part of the contribution of that.

Q Tony, the Governor of Ohio, Ted Strickland, has written a couple of letters to President Bush, I don't know if you're aware of them, but he's asking for personal assurances from the President that the National Guard troops, before they get deployed to Afghanistan or Iraq, the equipment be there and that the training be adequate before they're sent off.

MR. SNOW: Okay. I'm not aware of the Governor's letter, but we have always made it clear that nobody goes into combat without sufficient training and equipment, period.

Now, a lot of that can be done in theater. It quite often is. But the most important reassurance, not only the forces, but their families need to know, is that if and when they go into combat, they will have the equipment they need, and they will have the training they need.

Q What's the message for the President of Iraq today?

MR. SNOW: I'm sorry, what?

Q What's the message for President Talabani?

MR. SNOW: It's -- the message. By the way, what time is it?

MS. LAWRIMORE: It's 12:54 p.m.

MR. SNOW: We need to find out what -- okay, I just want to make sure I don't miss the meeting. It's not really a message. It's a follow on yesterday to the meeting with the Council of Presidents. Keep in mind, the Council of Presidents includes key Shia, Sunni, and Kurdish leaders. President Talabani is the President of the Council of Presidents, and it is important to continue on the conversations we had yesterday about the importance of continued progress on the political front, things like oil, the oil law, which is obviously front of mind for many people, but also continuing progress on de-Baathification, constitutional reform, provincial elections and that sort of thing.

There will also be conversations about security, the fears of sectarian -- or the importance of trying to be vigilant about the possibility of sectarian strife and so on.

It's not significantly different from what we had yesterday in the SVTS, but as we mentioned, President Talabani has been in this country for medical treatment; he wasn't there yesterday. So we continue the conversation with him today, and then in the future there will be continued meetings -- the President will continue to have one on ones with the Prime Minister, but also joint meetings with the Prime Minister and the three members of the Council of Presidents.

Q Thanks, Tony.

MR. SNOW: Thank you.

END 12:55 P.M. EDT