In July, 1996 the United States outlined a broad framework for negotiation of next steps under the Framework Convention on Climate Change. In December, 1996, the U.S. further elaborated its ideas by describing the key elements that should be discussed for inclusion in a protocol to guide greenhouse gas emissions reduction efforts in the post-2000 period. The attached document represents further elaboration of the proposed framework. Today, the United States will present to the Convention's Secretariat draft text for consideration in international negotiations that will occur throughout 1997. Consistent with previous U.S. statements and proposals, the U.S. Submission addresses the following key topics:

EMISSIONS TARGETS

A new concept is set forth to guide the establishment of, developed country emissions targets. Building on the concept of cumulative and averaged emissions, the U.S. proposes. creation of an "emissions budget". Multiple emissions budget periods are proposed, including a second period in which emissions are equal to or less than the first period, thus assuring continued progress toward achievement of the Convention's objective.

-- For a given period, each developed country Party would be allocated an emissions budget.

-- The submission does not identify either the size of the budgets or the duration of the periods.

-- Parties would be allowed to "bank" for future use emissions not used during a given period; to "borrow" a limited amount of emissions (with a penalty) from a subsequent period; and to trade emissions.

-- A new category is proposed to encourage rapidly developing countries to voluntarily adopt emissions budgets.

REPORTING AND COMPLIANCE

The proposal establishes procedures to ensure adequate reporting, measurement, review and compliance.

-- Countries would have to set national systems for measuring emissions accurately, achieving compliance and ensuring enforcement.

-- Annual reports on measurement, compliance and enforcement efforts for the relevant budget period would be required and made available to the public.

-- Implementation efforts would be reviewed under the Convention by expert teams and discussed at appropriate meetings of the Parties.

-- The Parties would be assigned responsibility for determining the consequences of non-compliance, for example: denial of emissions trading/joint implementation rights; loss of voting and other decision-making rights.

ADVANCING DEVELOPING COUNTRY EFFORTS

The proposal advances implementation of developing country commitments under the Convention by:

-- Requiring developing countries to identify and adopt "no-regrets" measures to mitigate net greenhouse gas emissions.

-- Requiring developing countries to prepare annual emissions inventories and report on steps taken to reduce emissions.

-- Establishing a process for reviewing developing country reports and improving emissions reduction strategies.

EMISSIONS TRADING AND JOINT IMPLEMENTATION

The U.S. submission provides for full emissions trading among countries with emissions budgets (provided they are in compliance with all obligations under the agreement); it also provides for "joint implementation", through which countries without emissions budgets could create and transfer emissions reduction credits achieved by qualified projects.

LONG-TERM EFFORTS UNDER THE CONVENTION

-- The proposal calls for periodic review of the agreement as scientific knowledge and information grows; it also requires the Parties to seek establishment of a long-term goal for atmospheric greenhouse gas concentrations.

-- The proposal calls for establishment of a date certain for negotiation of emissions obligations for all Parties, and calls for development of graduation mechanisms to strengthen the obligations of developing nations.

NEGOTIATIONS BACKGROUND AND CALENDAR

Over 160 countries are now Parties to the U.N. Framework Convention on Climate Change (the Convention), adopted May 9, 1992, opened for signature at the Earth Summit in Rio de Janeiro in June, and ratified by the United States in October of that year, after receiving the advice and consent of the Senate. The United States was the fourth nation overall, and the first industrialized nation, to ratify the Convention.

The Convention entered into force on March 21, 1994, and the Parties held their first meeting in April 1995 in Berlin. There, they launched a negotiating process designed to produce a new legal instrument to deal with the threat of climate change in the post 2000 period. They called for the instrument (either an amendment or a protocol) to be adopted at their third meeting, scheduled for Kyoto, Japan, in December 1997.

The negotiating process began in August 1995, in accordance with the decision of the Parties (known as the "Berlin Mandate"). It is taking place in a temporary subsidiary body of the Convention known as the Ad Hoc Group on the Berlin Mandate (AGBM). The AGBM has met four times since its first meeting (in October 1995 and in February, July and December 1996). It will next meet from March 3-7, 1997, in Bonn, Germany. After that, it will meet again in August and October 1997 before the Parties assemble in Kyoto in December.

At the AGBM's 5th meeting in December 1996, Parties were requested to submit proposals, preferably in the form of agreement text, to the Secretariat by January 15, 1997. The proposals received from various Parties will be compiled in a document and circulated to all Parties before the March AGBM meeting. In addition, the AGBM Chair will prepare a "framework compilation" that will also be circulated to all Parties before the March meeting.

Early AGBM meetings focused largely on analysis and assessment. Since July 1996, these meetings have shifted their emphasis toward negotiations, although analysis and assessment are continuing. While the U.S. submission represents a significant step forward, much work remains to be done if the Parties are to adopt a new legal instrument in Kyoto.

The Convention's secretariat moved to its new headquarters in Bonn, Germany, in August 1996. Future meetings of the Convention will take place there, unless otherwise agreed by the Parties.

The U.S. submission represents the latest U.S. contribution to the international negotiating effort. It follows from the policy announced by the United States last July at the Second Conference of the Parties and further elaborated at the last negotiating session in December 1996. The United States has proposed a three-part framework for a target to limit and reduce greenhouse gas emissions among developed countries: (1) the target should be binding; (2) it should focus on the medium term (i.e., 2010 to 2020); and (3) countries should have flexibility nationally in implementation. In addition, the United States said that it will be critical to include developing countries in next steps because finding a solution to the climate change problem will require a concerted global effort. In the U.S. view, all four of these concepts are linked and all four must be included in the new legal instrument; they are part of the U.S. draft protocol proposal.

CALENDAR OF MAJOR FCCC EVENTS AND MEETINGS

1992

May -- Adoption of the U.N. Framework Convention on Climate Change -- New York

June -- Convention signed at the Earth Summit - Rio de Janeiro, Brazil

October -- Convention ratified by the United States

1994

March -- Convention enters into force

1995

March-April -- First Conference of the Parties (COP-1) -- Berlin

1996

July -- Second Conference of the Parties (COP-2) -- Geneva

December -- Negotiating session -- Geneva

1997

February 25-March 7 -- Negotiating session -- Bonn

July 28-August 7 -- Negotiating session -- Bonn

October 20-31 -- Negotiating Session -- venue to be determined

December 1-12 -- Third Conference of the Parties to the U.N. Framework Convention on Climate Change (COP-3) -- Kyoto, Japan.

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