This record is a partial extract of the original cable. The full text of the original cable is not available.
UNCLAS SECTION 01 OF 02 MADRID 004020
SIPDIS
SENSITIVE
DEPARTMENT PASS TO ESTH COLLECTIVE; DEPARTMENT ALSO FOR
OES/EGC (ED FENDLEY) AND EUR/WE
E.O. 12958: N/A
TAGS: SENV ENRG ECON PGOV SP
SUBJECT: KYOTO NOW MATTERS TO SPAIN
REF: A. MADRID 3273
B. MONTEVIDEO 1390
1. (SBU) During an October 13 courtesy call by newly arrived
ESTHOFF, Environment Ministry General Coordinator for Climate
Change Teresa Rivera stressed that the Kyoto Protocol enjoyed
the strong support of the entire cabinet of the "new" Spanish
Government, and that Spain was determined to do its utmost to
fulfill its CO2 emissions targets under the terms of the
agreement. Rivera (please protect) said that the previous
center-right Aznar Government found Kyoto "inopportune" and
had thus "parked" any serious effort to meet Spain's target
of limiting CO2 emissions to 15 percent above 1990 levels.
Instead, emissions were allowed to grow unchecked and have
arrived to the level of 40 percent over 1990 levels. By
contrast, the "new" (elected this past March) center-left
Zapatero Government views Kyoto compliance as one the
principal planks of its "return to Europe strategy." (Note:
During the election campaign, Zapatero consistently
criticized Aznar's emphasis on strong ties with the U.S. and
made several gestures toward France and Germany immediately
after taking office. End Note.)
2. (U) Rivera acknowledged that it would be "very difficult"
for Spain to meet the 15 percent above 1990 levels target,
but that Zapatero and the rest of his cabinet were determined
to do the best they could to limit CO2 emissions. The first
part of the Government's compliance strategy was to complete
its National Emissions Compliance Allocation Plan, as
required by EU Directive 87/2003. This was submitted to
Brussels in September (Ref A). The second step was to create
a National Emissions Rights Register which allocates CO2
emissions rights to the sectors of the economy covered by the
EU Directive. Requests for emissions rights were required by
September 30 and the Environment Ministry is in the process
of finalizing the register. Both steps will allow Spain to
participate in the EU's CO2 trading regime which will debut
in January 2005.
3. (U) The harder part of the equation, according to Rivera,
is not the bureaucratic framework but instead the
industry/government reform and transformation required to
actually reduce CO2 emissions. The Government's strategy
focuses on three areas: (1) significantly reduce the amount
of electricity generated by burning coal (replacing it with
natural gas "combined cycle" generation); (2) reform tax
policy to encourage greater energy efficiency; and, (3) use
multiple tools available to government to greatly increase
the percentage of energy generated by renewable energy
sources. Rivera stressed that all three areas required
significant inter-ministerial coordination and that this was
already under way. She noted that Minister of Economy and
Treasury Pedro Solbes, the holder of the Government's purse
strings, was strongly behind the effort. Rivera did stress,
however, that Government's efforts could not succeed without
the cooperation of Spain's autonomous regions and that
efforts to get them on board were only now getting underway.
4. (U) Rivera said the goal of the above strategies was to
reduce CO2 emissions from the current 40 percent over 1990
levels to 24 percent over 1990 levels by 2012. The remaining
nine percent required to meet the 15 percent over 1990 target
would be obtained via domestic carbon sink credits (two
percent) and credits obtained on the international market
(seven percent). Rivera said Spain would not limit itself to
credits obtained on the soon-to-be-born European CO2 credits
market, but would also look further afield. She said the
September Spain-Uruguay greenhouse gas emissions reduction
MOU (Ref B) would be replicated with other nations and would
provide Spain with significant credits. Rivera also noted
that Russia's October decision to ratify Kyoto should serve
to depress the price of emissions credits, thus facilitating
Spain's efforts to acquire credits on global markets.
5. (U) Rivera stressed that Spain recognizes that any
serious/successful effort to address the problem would
require attention to the 60 percent of traditional Spanish
C02 emissions not covered under the National Emissions
Compliance Allocation Plan. Her office was working on a new
plan for these non-covered sectors as well. She concluded by
asserting that the many voices in the private sector had
exaggerated the economic costs to Spain entailed by Kyoto
Compliance. Rather than focusing on purely business costs,
the new government believes a serious effort to comply with
Kyoto could actually help induce a "technological revolution"
in Spain, particularly in electricity generation. This could
in turn have a long-term positive impact on the economy.
6. (SBU) COMMENT: Rivera, while quite friendly and open, is
clearly a "true believer" in Kyoto. We think she provided an
accurate snapshot of Zapatero's intentions vis-a-vis Kyoto.
But this government is young and inexperienced and still
faces tough tradeoffs further down the road. Opposition from
within and outside the government will certainly grow once
the economic costs of Kyoto compliance become more apparent.
That said, we believe that Zapatero will endeavor to prevent
Spain from continuing as an EU "outlier" with respect to
Kyoto compliance. He takes this "return to Europe" stuff
seriously and likely believes that Kyoto is one litmus test
of his Government's Europeaness (sic).
ARGYROS