For Immediate Release
Office of the Press Secretary
December 5, 2007

Press Briefing by Chairman of Environmental Quality James Connaughton and Under Secretary of State for Democracy and Global Affairs Paula Dobriansky on U.N. Convention on Climate Change
James S. Brady Press Briefing Room

Press Briefings

2:06 P.M. EST

CHAIRMAN CONNAUGHTON: Good afternoon, everybody. Let me just start with the Bali meetings already underway in Indonesia. We are working on a new discussion on climate change for after the Kyoto Protocol expires in 2012. So let me give you a little bit of top-level background on it. Under Secretary Dobriansky is going to go into some detail about what's happening at the meetings itself, and then I'll come back up and put this in the context of the major economies meetings that the President has been convening, and put in the context of some of what's going on on the Hill right now.

So the top line, President Bush made clear that energy security and climate change are two of the greatest challenges of our time, and that the United States takes these challenges seriously. What we are looking toward is a new global agreement for after the Kyoto Protocol expires that will be environmentally effective and economically sustainable.

The President, in his speech on September 29th of this year, made clear that the United States is committed to advancing negotiations toward that end, and so we're looking forward to a positive outcome in Bali that will give us a road map -- it's being called the Bali road map -- which will set the negotiating agenda between now and what we hope will be rapid completion of negotiations by the end of 2009.

The U.S. will be bringing probably the most senior delegation that the U.S. has sent before. The State Department has the lead on the negotiations, and Under Secretary Dobriansky will be fulfilling that role, along with her Senior Climate Negotiator, Dr. Harlan Watson. But in addition to that -- or and in addition to that, Ambassador Susan Schwab, the U.S. Trade Representative, will be attending a meeting of trade ministers. And this will be the first time trade ministers have met at a climate meeting. And Under Secretary of the Treasury David McCormick will be going for a finance ministers meeting, which will be the first time finance ministers have met at a climate change conference. And then I will be leaving on Saturday, and will join the delegation to play my own part in helping to advance the negotiations. And I'll be there during the ministerial portion of the meetings.

In addition to that, we'll have senior assistant secretary-level folks from the Department of Energy -- Andy Karsner, who deals with renewables and energy efficiency, which are two key topics; and we will have Assistant Secretary of State Claudia McMurray, who handles the forestry and other natural resource issues for the Department of State, which is also going to be a big subject of discussion in Bali. And I guess, finally, we'll have senior officials from USAID, because climate change adaptation is going to emerge as a prominent topic for the first time -- will find its way prominently onto the agenda, and so we'll have some people there working on that.

The meetings will conclude at the end of next week, after which time we hope to reconvene the major economies. And I'll talk to you a little bit about that after you hear from Under Secretary Dobriansky.

UNDER SECRETARY DOBRIANSKY: Thank you. Good afternoon. First, we would like to see a successful outcome in Bali, and specifically, the United States is very committed to developing a new global post-2012 framework that is environmentally effective and economically sustainable. And toward this end, the United States will be working with its partners to reach consensus on a Bali road map that will advance negotiations on a post-2012 framework under the U.N. Framework Convention on Climate Change. We're very committed to concluding these negotiations by 2009.

At a recent pre-Bali ministerial meeting, ministers were gathered, and in that meeting we highlighted four substantive areas to be addressed in a Bali road map, and as part of a post-2012 framework. These are: mitigation, adaptation, technology, and financing. We support these four areas. And in particular, adaptation is a priority for the United States.

One of the suggestions put forward in this pre-ministerial was to have adaptation addressed in the same context and on the same level, if you will, as mitigation. In the past, adaptation has been discussed in the U.N. Framework Convention, but it hasn't been addressed as robustly. This is a priority for us.

Also during the pre-ministerial meeting there was a discussion, in fact, about how to advance discussions on forestry, which, together with land use, deforestation accounts for some 20 percent of greenhouse gas emissions. This will be another area that will be part of our discussions during the Bali meeting.

Our delegation will be open. We'll listen carefully to the ideas of others in an effort to achieve consensus. And Bali is an opportunity to launch a new phase in climate diplomacy. Let me tell you that -- you know the conference began on Monday, on December 3rd. Reports from our delegation are that the meeting is off to a good start. And let me just underscore again, our goal is to have a very successful outcome in Bali, and to have the launch of these negotiations.

Let me turn it back to Jim Connaughton, and then I'll rejoin.

CHAIRMAN CONNAUGHTON: Now, I want to put the Bali meetings in the context of the major economies process that the President initiated. These are the grouping of countries that represent the greatest economic activity, the greatest energy use, and the greatest greenhouse gas emissions. In fact, I think together they currently account for more than 80 percent, and if you look at future projections, they may be as high as 90 percent of greenhouse gases.

The goal of that effort is to come -- is to produce a detailed contribution, some recommendations, if you will, on what a new framework should look like and what elements that should include. We're pleased that the agenda that we put in place in September on the major economies fits perfectly within the four categories that Under Secretary Dobriansky highlighted, we are aiming toward seeing in Bali as part of the road map.

In the major economies process, we're trying to reach agreement on a long-term global goal for reducing emissions, the establishment by each major economy of a national plan that includes mid-term targets, as well as policy measures that include binding measures, market-based measures and incentives for achieving those goals.

Very importantly, we would like to see global action on six key priorities, in terms of technology advancement in sectors. Three of them are things we can do today, so we need a lot more of efficiency; we need a lot more of nuclear power, which is zero-emission; and we need a lot more renewables. These are all existing opportunities that we can ramp up more than we have today.

Three of them require concerted action by the major players if we want lasting success, and those are coal, cars and forests. Coal represents 50 percent of emissions and, therefore, requires a significantly enhanced global effort to find the technology that makes power production from coal low-carbon. The same is true of vehicles -- represents about 20 percent of emissions. And there too we need to find alternatives to petroleum that have lower carbon profiles, and then enhanced vehicle technologies. And then forestry, we just need to stop deforestation. We don't do it in the developed world. It's not done in much of the developing world. It's an important issue in a few key places.

We are also -- the President has asked Secretary Paulson to begin consultations with major countries on creating a new clean energy fund as part of the major economies process. And this will now be discussed among -- the early pieces of this will be discussed among the finance ministers in Bali. As part of that, we are also calling for the elimination of barriers to trade; so tariffs and non-tariff barriers to trade in these clean-energy technologies. These go well together. If you eliminate the tariffs and you have low-cost financing, we think that we can increase global trade and clean energy technologies by 14 percent or more. So you're talking about a huge influx in new technologies. Finally, we need a better measurement system so we can have better accountability for performance, and then these programs on adaptation and forestry.

I just want to highlight that the head of the U.N. process -- the secretary of the process, Yvo de Boer, in his opening remarks, highlighted the fact that 2000 well -- 2007 could well be termed an incredible year for climate change. Among the reasons he cited was the fact that in 2007, the United States launched meetings of the major economies aimed at contributing by the end of 2008 to the UNFCC process. He also noted the role that the major summits played last year in adopting policy positions on climate change, starting with the G-8, where the U.S. took an active part, and including APEC, ASEAN, and the commonwealth meetings. And the United States was pleased to be part of the effort to come up with a very progressive APEC agenda in Sydney this year.

So with that I think we'll open it up for questions for Paula or I.

Q Can somebody explain the mitigation adaptation thing?

CHAIRMAN CONNAUGHTON: Yes. Mitigation, for those of you who aren't climate experts, means greenhouse gas-reducing activities: clean technologies, improved efficiency, better building designs, you name it -- the activities that reduce energy use or reduce the carbon profile of different activities. It also includes -- there are more things than just emissions from energy. There are greenhouse gases, for example, like methane, that comes from agricultural operations or comes off of landfills. There are greenhouse gases that come from chemical manufacturing, and so there is efforts to actually phase out those kinds of emissions. That's mitigation.

Adaptation is, we know the earth is warming. We are already seeing observed effects related to sea-level rise. So we know that actions need to be taken to pull people back from low-lying areas as this gradually increases. So adaptation is how you make decisions, management decisions, informed by the science about the negative consequences of a warming world and, in some places, the positive consequences, and be sure to adjust your activity accordingly.

UNDER SECRETARY DOBRIANSKY: In fact, this is now on the -- in fact, many developing countries have particularly urged that adaptation be a focus and that more action be taken in this area. In other words, actions that will actually help prepare them and build capacity for dealing with climatic change.

One of the initiatives that the United States has had is what's known as the Global Earth Observation System of Systems. And what this does is it brings together some 70-plus countries, mostly those in the developing world, and it in fact helps them deal with climatic change -- it might be floods, it might have droughts -- and it standardizes our efforts in order to forecast and to predict.

In fact, just the last days -- there was the meeting of the Global Earth Observation System of Systems. We are planning to take some of the findings and the results of that meeting that just took place in Cape Town, South Africa, and to actually bring that forward to the meeting in Bali. It's one of the key areas that developing countries have urged, please, let's address this more, in a more aggressive way.

CHAIRMAN CONNAUGHTON: And our focus will be on a broad agenda. There will be some discussion of adaptation funding, and we'll be part of that, but the broader agenda is adapting to climate change as a piece of the development agenda. Infrastructure decisions need to take this into account, as they take into account natural circumstances, such as tsunamis or earthquakes or other natural forces; this is how you integrate the climate change aspects of that into that decision-making and planning.

So we are hopeful that there will be actually a quite broad agenda where we can carry this out in a number of different places, in addition to the climate change conversation.

Q I'm sure you're aware that the carbon-capping bill is before the Senate Environment and Public Works Committee today, and the bill -- one of the bill's sponsors, John Warner, says the U.S. has to lead on climate change, and if we don't, "China and India will simply hide behind America's skirts of inaction." So without mandatory targets for reducing greenhouse gas emissions, how can the United States show it is actually leading on this issue?

CHAIRMAN CONNAUGHTON: Well, the United States is already leading in a substantial way, undertaking a wide range of programs that equal or exceed much of what's being done in the rest of the world. We have five different mandatory programs already in place, three of them at the federal level: mandatory fuel economy requirements, mandatory renewable fuel requirements, and mandatory appliance efficiency standards covering most of the major appliances.

At the state level, we have mandatory renewable power requirements -- I think now nearly 30 of our states have those, covering most electricity generation, and at the state and local level we have mandatory building codes that our Department of Energy has been helping to design in accordance with the different geographic circumstances. In addition, our technology programs and our technology incentives -- the tax credits and multiple billions of dollars, tens of billions of dollars in loan guarantees -- are part of a financing package that is unrivaled in the world in its scope.

As we go forward, we're looking at a number of new policies. We have the President's 20-in-10 initiative, which, apart from Brazil, would be the most ambitious displacement of petroleum in transportation area that anybody has ever proposed. And so we have -- we'll replace 15 percent of gasoline use through alternative fuels. We'll prevent 5 percent of gasoline through very stringent new fuel economy mandates. At the same time, we know that more states are looking at renewable power requirements; you'll get even more of that. And then we have our new effort to try to bring a lot more nuclear power online.

So in each of these areas, other countries are looking at

renewable power requirements; you'll get even more of that. And then we have our new effort to try to bring a lot more nuclear power online.

So in each of these areas, other countries are looking to the standard that the U.S. is setting, and seeing whether they can be similarly ambitious. And I would note, Europe now has a renewable fuel proposal on the table. It is aggressive, but is not as aggressive as what the President has got on the table. Our fuel economy requirements are also right up there in the best of class in terms of what we're trying to achieve in fuel economy.

So these additional items, such as a carbon cap and trade, either economy-wide or specific to a particular sector, those could be additional policy features. But it would be a mistake to think that the U.S. is not already way out in front in most of our implementation strategies, and that other countries are mimicking them.

Q But as far as -- the industry-wide caps remains a non-starter, yes? Economy-wide caps.

CHAIRMAN CONNAUGHTON: The President has supported sector-based strategies that include mandatory strategies that accomplish multiple goals. One of them is greenhouse gas reduction; one of them is energy security; and an underlying and central goal is sustained economic prosperity, because it is only through sustained economic prosperity that you can actually pay for the technologies that solve the problem. So we're trying to achieve all of that in a sensible way.

So we'll continue to look at proposals and ideas, as we have. Every single year, since 2001, the President has put new policy on the table in this area, and we continue to evolve and grow our policy.

Q But other major countries are agreeing to economy-wide caps on emissions? The United States has no interest --

CHAIRMAN CONNAUGHTON: You've made a broad statement that's not correct. Right now the European Union has a sector-based cap-and-trade system that's limited to its power sector and large industrial emitters. Canada has proposed a system that they're now in the process of trying to implement. Australia has proposed to do this, but has not come forward with any legislation or implementing activities or targets yet. Apart from those examples, other countries are not proceeding with economy-wide caps and trades. So there's actually -- it's a subset of countries that are looking at that one particular tool. The vast majority of countries have not yet considered such a policy; they're looking at other strategies.

Our point is, there are many pathways to a shared goal, and we want to -- as much flexibility and innovation in policymaking as will bring more countries to the table to take on real commitments and proceed with real actions. So we're not fixed on one or another.

Q What you just said, notwithstanding, we all know there's considerable skepticism around the world about U.S. policy in this regard. What is, as you all go to Bali, what is this administration's level of concern that you can articulate to us, to the rest of the world, in terms of time line on turning things around?

UNDER SECRETARY DOBRIANSKY: May I? If I may, as I mentioned, we had a pre-ministerial meeting before we embark to Bali. The reason I share this with you is just because you had some 35 nations, that will be represented in Bali, discussing what is before us. I have to say that I was very struck by the degree of consensus in, and desire in wanting to launch negotiations. The United States was very clear about this, and I think there were many statements thereafter about how we will join in partnership with others in launching such a negotiation. That is critical at this time.

Secondly is what is the negotiations going to be about? The areas that are identified are ones that will matter greatly in terms of having an impact: mitigation, adaptation, technology -- which you spoke directly to -- financing. Why is it that also in this meeting -- for the first time in any COP meeting, there is a meeting of trade ministers, there will be a meeting of also finance ministers, which the United States is actively joining in and working towards dealing with these inter-related issues.

So I would first say to you, because you said as we go into this, I think that there is a real desire here to have a Bali road map, advancing negotiations. The United States has already indicated, months ago, particularly with the President's announcement and speech in May, that there's a desire to be part of a framework and craft a framework. I think we're going into this meeting with a very important foundation that I hope, and we hope will bridge our efforts on climate change in these years ahead.

Q I guess I was just asking what is the level of concern at this -- in this building about the problem to slow, stop and reverse --

CHAIRMAN CONNAUGHTON: I would refer you to the President's speech for the clearest articulation of that. It was in 2001 that the President made clear that we need to slow, stop and reverse emissions, and he was quite straightforward about that -- I guess I'm sorry, February 2002.

In the G8 Gleneagles two years ago, the G8 leaders came together and agreed that urgent action is required, and the President was part of that. The President couldn't have been clearer in September: Energy security and climate change are two of the great challenges of our time. And many of you may recall that he featured that particular point in his State of the Union address this year.

So we keep coming back to a sense of skepticism that I hear, and yet the reality is -- how many times does the President have to make clear that he's dedicating his efforts to solving the problem, and we're moving well beyond -- even in the context of U.N. discussions -- well beyond the skepticism. Everybody is eager for ideas on finance. Everybody is very eager to see what we can do in these sectoral areas. If we don't solve the coal problem, we don't solve the climate change problem.

Our leadership on fuels, again, is unparalleled. Everyone wants to know how we're going to get to second generation. They want to be part of that, getting the cellulosic ethanol that the President featured this year. They want to be part of that. They're not sitting on the sidelines waiting.

Same thing on nuclear. I mean, there's a great welcoming back of the United States to advancing a new generation of zero-emission nuclear power. And you all have seen the renaissance of this discussion just in the last three years around the globe. Even in Germany it's a topic that can be discussed again. So we need to catch up with what's been happening and that is the point here. We actually now have a much stronger foundation upon which we can lay common ground, and that's what we are trying to do in Bali.

UNDER SECRETARY DOBRIANSKY: Also, if I may, just one word. I would like to just add, significantly the United States has contributed over these last five to six years some $37 billion. There's a very strong commitment here. Many of the developing countries -- the question before about India, China -- have particularly talked about access to energy, about growing their economies. These initiatives and these monies have been devoted particularly not only to science research, but to the development of technologies, which is key.

Q No time line here you want to discuss?

CHAIRMAN CONNAUGHTON: No, actually, many of the efforts we do have do have time lines. I could list them all off, but we've got a paper to show you -- but we've got 35 billion gallons of alternative fuel by 2017 in America. Other countries can be similarly ambitious. We've got 8.5 billion gallons saved in fuel economy standards by 2017. I could give you lots of time lines. We have them. We need to move past this one-size-fits-all discussion.

Q -- we need to act by a certain day and time?

CHAIRMAN CONNAUGHTON: I would say there are many perspectives on that.

Q I'm asking you for yours.

CHAIRMAN CONNAUGHTON: Our view is we're working this problem area by problem area, and trying to set as aggressive a schedule as is plausible, and that's the best you can do. You can't move faster than you can move.

Q You talked earlier about sustained economic prosperity. Well, does the administration believe that's mutually exclusive with any kind of global mandatory limit?

CHAIRMAN CONNAUGHTON: Actually, we believe sustained economic growth is a necessary precondition to being able to achieve any reasonably aggressive target for reducing emissions. If you don't have wealthier, advancing societies -- these technologies come at a cost, you need to be able to pay for them. And we know from history that in times of global recession or national recession, those are when countries make their lowest investments in natural resource stewardship and environmental progress. And so it's a precondition. It is not a sufficient condition. You still need goal-setting. You still need to find programs and policies to help orient those resources, and we'll continue -- again, we'll continue to develop those.

Q Can I follow up, Jim? You talk about in terms of needing a short-term economic growth, but there were, I believe, 150 global business leaders last week, including major U.S. firms, that called for mandatory -- global mandatory limits on the premise that they all wanted to be on the same page and the same level playing field, and that they basically thought it was in their best long-term economic interests to do this.

CHAIRMAN CONNAUGHTON: Well, in relation to the major economies process, those leaders are working to reach agreement on a long-term globally-shared goal for reducing emissions, and so we're in the middle of that discussion now. We don't have an outcome yet, but we'll be working on that in the coming year. And then behind that we are fully expecting and encouraging clearly articulated national strategies for the mid-term -- 2020-2030 -- with respect to activities to help reach that long-term global goal.

Q But aren't they saying that in order to get to that globally-shared goal, we need some form of mandatory limit, whether it's a carbon tax, or it's some sort of cap-and-trade -- but some sort of industry-wide global limit that everyone is held accountable to?

CHAIRMAN CONNAUGHTON: Each one of them individually

-- if you talk to them, and I have talked with many of them -- have different perspectives on how to structure that outcome. Some of them look at economy-wide cap-and-trade. Some of them like the fuel economy approach. Some of them -- actually, a few of them are talking taxation as a tool. Many of them are talking about building standards and codes. All of the things I have been describing for you are on their agenda for action.

But, by the way, it's not limited to mandatory programs. Remember, we have a powerful marketplace. You are in a room, right now that is using state-of-the-art solid-state lighting technology, that is here not by any mandate, but by the personal choice of the building designers and managers of the White House, that this is a very effective, efficient and low-cost technology. Well, you're sitting in a room that's saving greenhouse gases. So there is a great power in technology innovation and affordable technologies to reduce our energy loads, and you're part of it.

Q How serious is the problem? Because in recent months it has become an international issue? And also, which countries do you think are the problems and what help or advice you have for them? And secondly, this U.S.-India civil nuclear agreement, how it will help, as you go through to implement -- and finally, is solar is the answer?

CHAIRMAN CONNAUGHTON: Okay. Let me take the -- if you look at the major leader summits of this year, this was a very consequential year. Every major summit of leaders has recognized that our understanding of the science has deepened and, at the same time, the opportunity for technology investment and innovation is greater than even we thought. We're talking about 35 billion gallons of alternative fuel today in 2007; 3 billion is what was on table in 2001, just to give you a sense of scale.

The key countries: China is critical. China's emissions probably already exceed those of the United States. If not, they will soon. And there's no question that by 2020, they will vastly exceed the United States. Countries such as India, Brazil, Mexico, South Africa, heavy fossil fuel-using countries, they need to be part of the equation, too. And it's an issue of straightforward math. Within the coming decades, most of the growth in greenhouse gases is going to come from the developing -- the big developing countries. And it will exceed those of the developed countries. We have historic responsibility to take care of what we are now doing. But if we want to truly effect the long-term temperature trend, we can't afford for the major developing countries to wait. So we need strategies.

Now, technology. There is no question that nuclear power has to be part of the solution, because it is the only energy source right now that can produce base-load affordably to millions of people in urban areas without any emissions. So if you want the biggest savings in CO2, for the best delivery of electricity that's most reliable, nuclear power is all we have right now. Renewables are important; efficiency is very important; but they do not provide base-load power.

And so, the work with India, for the future of India's energy security, the future of India's air pollution, air quality, and the future of India's contribution to adjusting climate change, nuclear has got to be a key piece of the equation.

UNDER SECRETARY DOBRIANSKY: Your question also raises, may I say, an important point on the -- one of the challenges of the meeting, and that is, is how we address the diverse characteristics of all of the countries assembled, and particularly the major economies, the major emitters, the major energy users. And one of our fundamental objectives is to take into account those diverse characteristics. To be able to have a global framework that is environmentally effective and economically sustainable, it's essential to look at the diversity and to construct a way forward that provides that kind of flexibility.

Q You just mentioned diverse characteristics. Can you talk about the diverse characteristics of the broader-speaking U.S. delegation in Bali and whether that's going to send mixed messages? You've got Congress, you've got the Governor of California, the Mayor of New York, the former Vice President, a lot of others -- all with their views. Is that going to confuse other nations in terms of where the United States stands and what the United States position is?

And secondly, although you went back to 2001 and 2002 in the President's thinking, isn't it true that his position on this issue has sort of evolved over the course of his presidency? And I'm wondering if you can talk a little bit about that.

UNDER SECRETARY DOBRIANSKY: On the first, I think that's the strength of our position going into Bali, the fact that, as has been in previous conference of parties, and as will be in this one, that it will draw attention to the range of thinking that is going on in the United States, the kinds of actions that are being taken in terms of a number of our states. At the same time, it will also afford the opportunity for the administration to also talk about the very full range and broad scope of the actions that have been taken internationally in terms of bilateral agreements, in terms of what we deal with other countries on methane, on hydrogen, on carbon sequestration, on the nuclear area. I'm only scratching the surface.

So, actually, I think that actually it will contribute to the very rich discussion. This meeting in Bali is about looking at the next phase and the next steps. It will be about looking at those paths that have worked and those that are in the process of being launched.

So, from that standpoint, we have interacted with many of the members of the congressional delegation that will, in fact, be in Bali, and we look forward to doing so on the ground and also as -- after the Bali conference, in engaging them, as well.

CHAIRMAN CONNAUGHTON: Another point about evolution. There's been steady progress since 2001, in terms of our understanding of the science, and then in terms of our amplification of the strategies for taking more aggressive action. So there's no question about that. But it truly is evolution over time.

There's been some that suggest sort of a recent -- that we're recently coming to this. Of course, that's just demonstrably untrue. The President launched, back in 2003, the Hydrogen Initiative, which was a catalyst for Europe following in our footsteps, and Japan stepping up to the plate later that spring. The President put on the table the Advanced Energy Initiative a couple years ago to really begin to develop the next generation on solar, wind, our storage issues with respect to batteries, as well as the technology side of advanced second-generation biofuels. That proved to be a catalyst for initiatives in other countries to begin to invest in similar measures.

The President launched the Asia Pacific Partnership on Clean Development and Climate. It was the first time we had a multilateral group that included India and China, and the newly OECD economy of South Korea, in a shared agenda on sectoral efforts to reduce greenhouse gases in the major energy sectors. That has been the catalyst for the major economies process. So we've now expanded the number of countries involved in that kind of a discussion.

So at each step, we've been cumulatively adding the science base. We've been cumulatively adding to the policy base and the technology advancement base. And other countries have been moving in step with us, and that's encouraging.

Q Ms. Dobriansky, you spoke to a real desire for the United States to be part of the framework to write the Bali road map, and I understand it's to draw the roads for post-2012, the next phase. And speaking from your perspective, the sector-base approach is fast. I know the EU is looking at the aviation industry and -- (inaudible)

-- to come out and regulate greenhouse gas -- (inaudible) -- so do you see that? And maybe you talked about it in the pre-ministerial meeting, but do you see that as an agenda item for next week's talk about -- over the course of negotiations for next couple of years, that aviation is going to be an industry to target?

SECRETARY DOBRIANSKY: Well, you know, there is a forum, ICAO, the International Civil Aviation Organization, in which there have been these discussions, and in which Europe, the United States, others have addressed this issue, and have engaged on it. And we see that as a forum which is very appropriate for such discussions.

In terms of Bali, I will say to you that at least in the pre-ministerial meeting, in terms of the specific issue, I don't recall any one around the table raising that. But that's not to say it's not an important issue -- meaning in the pre-ministerial that's not an important issue. In the major economies meeting, that is an area that we have talked about, about transportation, and looking at very specific ways one can really target more efficient and effective measures by sector. That's how I would respond to that.

CHAIRMAN CONNAUGHTON: But I think a bit of perspective here is critically important. We need to keep the eye on the ball of the big priorities. So in the area of climate mitigation, climate emission reduction, there's a lot of fashionable ideas -- picking out particular sectors and what have you -- that come into the popular mind-set, but we have to keep our eye on the ball.

Coal-powered electricity generation is 50 percent of the emission equation. We have to dedicate that much effort to that technology challenge. Roadway transportation, people's personal mobility, is the next biggest slug of the challenge, and that has huge energy security implications, as well. We have to dedicate that much effort to that issue. Deforestation is 20 percent of the emission profile.

I've now given you 80 to 90 percent. That's where we need to focus in our efforts. When we talk of an area like aviation, you talk about energy-intensive manufacturing, you talk about long-haul trucking -- big 18-wheelers -- those three sectors already have the most dramatic incentive they could ever need to reduce their emissions because their fuel prices are their profits. And so we have seen in the aviation sector that a new aircraft is 50 percent more fuel-efficient than the one that it is replacing, so they have made huge strides.

So I would submit those sectors probably don't need as much help on the mandate side; where they really need help is on the capitalization side. They need better economic policy that gives them an incentive to turn over their capital stock into newer, more efficient processes and equipment. Many of the mandatory proposals will not achieve that. It will just merely make them pay a tax for their ongoing operations without actually shifting them into new technologies.

So I just want to be sure, as you look at these, please ask the critical question: How big a share is it and what's the right policy to affect the adoption of new technologies? And in those sectors, some of those proposals are highly problematic.

Q One more here. You talked about trade barriers and tariffs and things like that. Would something be on the table regarding the U.S. tax on importation of Brazilian ethanol from sugarcane? Would that be on the table?

CHAIRMAN CONNAUGHTON: Well, we what -- what we have focused on right now, the proposal that was just announced and we brought to the WTO was the elimination of tariffs on clean energy technologies and services. So we've been focused on technology and services, not on fuel types and sources. That is a whole separate category, and the Brazilian ethanol issue is one of a variety of highly challenging issues on the fuel side.

So we've tried to focus on the place where we think we can make the fastest progress with the biggest result. And there's no question that the fastest thing we can do, that will have a multi-billion dollar investment outcome, that will produce real-time emission reductions, is the zeroing out of these tariffs on technologies and services. And it is actually a bit of an outrage that it hasn't happened yet because we've known we need to do this for years. We have a list. We know what the products are, and it's not that hard to do. We just have to -- you need political will to do it. That's a whole -- I would be happy to follow up with you on that one. It's one of my favorite subjects. For no good reason, is the answer. For no good reason.

Q Thank you.

END 2:44 P.M. EST