U.S. Relations With the People's Republic of China (2006)

U.S. Department of State

The U.S.-European Relationship

Kurt Volker, Principal Deputy Assistant Secretary for European and Eurasian Affairs
Roundtable with German Press at Foreign Press Center
Washington, DC
December 13, 2006

[ ...Intervening Text... ]

Question: Coming maybe more to the issue, I'd like to ask you about the approach to Iran. It's obvious there is a different approach in Europe towards Iran than is here in Washington. So far the efforts are common, there are no open discussions about that, but I'm sure you're aware that in Berlin and in Europe they're very reluctant to increase the pressure on Tehran. There are quotes from European politicians saying that they never want to give the impression that the world or the West wants to punish Tehran.

I assume this is different to the approach here. Is there any reason to be optimistic that without changing politics in Tehran, that next year you will achieve some results?

Principal Deputy Assistant Secretary Volker: First off, I don't see the premise of your question quite the same way. I don't see a lot of difference between the U.S. and our European partners on Iran. We are working together with the EU-3 and in the UN Security Council. We are trying to create the conditions where Iran makes a decision to stop its nuclear enrichment program and to work with the international community. It can have a civilian nuclear capacity; that's nothing that we are contesting, but it needs to work together with the international community in a verifiable way to do that and to give up its own enrichment plants.

To achieve that we've put some incentives on the table -- Europe and the U.S. have done -- including our putting on the table the idea we would sit down with the Iranians and join those negotiations if they cease their enrichment program. And we need to have some increasing pressure on Iran, so there are costs to them not giving up their enrichment program and working together with the rest of the international community. That's something that Europe also agrees on, and it's part of the approach we've had with the Security Council resolutions we've had so far and the work we've had with the EU-3 so far, and what we are now working on as we start the effort for a further UN Security Council Resolution. In fact Secretary Rice has been in close touch with her counterparts on this, Nick Burns has been with his counterparts, so we're very much in the same place.

The issues revolve around how much and how fast, and how do you do this together with Russia and China to keep the Security Council united, which is important. I think the unity of the international community is an important factor. If the issue is how do you influence Iranian decision making, that's a big factor to see that we're all together on this and doing one thing. At the same time it has to be real so that it can't just be talk and hoping. None of us -- not Germany, not France, not the UK, not the U.S. -- none of us are satisfied looking ahead to a future and saying, oh well, if our wishing for Iran not to have a nuclear weapon doesn't work, then that's okay. None of us are satisfied with that so we are working together to try to put in place the conditions to change the circumstances, get around to make a different decision. That's very much where I see us.

Will Iran take a different decision and say okay, we give up our enrichment and we'll reach some accommodation? The answer is that's a decision only they can make and we, the U.S. and Europe, the EU-3, Security Council, need to do everything we can to urge and press and push the Iranians toward that decision. We can't make it for them. Only they can do it. But that's what we have to put in place and that's what we'll do over the next year.

[ ...Intervening Text... ]

Question: [Inaudible], the gas [inaudible]?

Principal Deputy Assistant Secretary Volker: Sure. And it's not a question of not -- Russia should be supplying energy to Europe. Russia has a lot of energy, Europe needs to buy energy, and that's fine. The question is, can you diversify in order to make sure things are on a market basis and a market footing where no one holds a monopoly power, but rather we play in a fair market.

Take for example, we're talking about Germany, but I was in Sweden earlier this month. Sweden declined having a Russian gas pipeline to Sweden and it has 50 percent of its electricity from nuclear; 40 percent from hydropower; 10 percent from other sources, most of those are renewable. They're in great shape on energy as far as that goes. They still have to make decisions, though, about what to do. Do they close down nuclear plants? They decided not to do that. Do they build new ones? They haven't decided that yet. So these are all choices that we have to make and it's not only Germany, but Europe as a whole. Germany's in one situation, if you have a gas pipeline with Germany, but you also have nuclear power and you also have other sources of energy. People have to be making decisions about investments, about the application of new technology, about connections.

One of the things that's been going along over the last couple of years is development of Azeri and Kazakh oil and gas fields; bringing those to Europe is important. We have the Baku-Tbilsi-Ceyhan pipeline come on-line. Now there's talk about adding more gas to that. We've been talking with Azerbaijan, Georgia and Turkey about gas supplies in that part of the world. Algeria I think has decided to increase its gas supplies to Europe. So there's a lot to talk about and it's not necessarily being tough against Russia. It's being responsible and creative and determined in advancing a European policy. That's the first one you raised.

The second one you raise is image. Here I've heard many people say that the only way to change the U.S. image is for a major change in U.S. foreign policy. What I would say to that is, the first thing people ought to do if they're looking at the image of the U.S. is look at what U.S. policy actually is because I think that is very poorly understood in Europe.

Let's start with climate, because that's one that I've been doing a little bit of work on lately. The U.S. has a terrible image on climate in Europe. People say we're a belching, smoking, environmental ogre of some kind and that we don't care about this issue at all, we're not doing anything about it. That's just wrong. We do care an awful lot about the climate and about the environment and about greenhouse gas emissions and we're doing a lot about it.

We are not a signatory to the Kyoto treaty so we don't participate in that effort. That's true of a lot of the countries. The U.S. has, however, been working at reducing greenhouse gas emission and working at reducing the greenhouse gas intensity of our economy.

If you just look at a period, for example, the latest period for which we have data is 2001 to 2004. The U.S. had a growth of greenhouse gas emissions in our economy of about 1.3 percent. That's pretty slow growth. The EU had growth in greenhouse gas emissions of its economy during that same time of about 2.5 percent. Also pretty slow. More growth than the U.S. had, but both modest growth in terms of where we are. Kyoto had a target for EU reductions, an 8 percent cut from 1990 levels. Most of that cut had been achieved by the time that Kyoto was signed because it was looking backward in time, but still an effort to get down. But in the most recent period over which we have data, both the U.S. and Europe have had a modest increase. The U.S. increase being even a little bit more modest than Europe's increase.

In addition, we had much faster economic growth during that period of time. We also had population growth during that period of time. The measure that we think is important to look at is the greenhouse gas intensity of the economy. Our view is that you've got to have robust economic health. You've got to have jobs, you've got to have growth, at the same time that you're reducing greenhouse gas emissions from your economy.

So if you take your greenhouse gas emissions and divide it by your economy, that's the greenhouse gas intensity of your economy. During this time period U.S. greenhouse gas intensity dropped by about 7.5 percent. European greenhouse gas intensity also dropped. I don't have the figure here, I'd have to go home and look it up, but it's about 4.3 percent or something like that. So it is slower reduction in the greenhouse gas intensity of the European economy than what the U.S. has done during this time period.

We started with a dirtier base because we have different countries and different economies. More nuclear power in Europe, less nuclear power in the U.S. We have big wide open spaces. We've developed our economy differently. But the fact is we are doing a lot of the same things to achieve reductions in greenhouse gases.

The way that we're doing this is different than the Kyoto way. Kyoto is basically setting a cap and then trading emissions within a cap and trying to achieve a reduction. So far it hasn't done that, but it could still do that. I'm not saying there's something wrong with this. We didn't want to sign up to it because of the impact we felt it would have on our economy. We also felt that people set targets, reduction targets or the levels, in a way that was not necessarily fair or that was going to bring about real effect, real reductions. What we're seeing right now is that countries that set ambitious targets for reductions under Kyoto are trading away the emissions to countries that didn't set ambitious targets for Kyoto, who have not cut their emissions and are getting the benefit of other countries trading the emissions to them, so it hasn't really pushed anything down yet.

It doesn't mean it won't ever sort of bite at some point and make a difference, but we didn't think this was the right way to go about it.

What we have done is invest a lot of money in technology and development. I think the figure is about $29 billion since 2001 in public funding for development of cleaner technologies.

This has had the effect of speeding the development and reducing the cost of some alternative sources of energy. So that if you compare the cost of kilowatt hour of solar or bio-mass or other sorts of alternative energy 20 years ago and what it costs today, it's far cheaper. It also happens to be the case that fossil fuel prices are way up right now. So the relative cost of some of this alternative energy is pretty good and it's being brought to market more easily.

The U.S. is now the largest producer of bio-fuels in the world. We passed Brazil this year. Brazil's second. Europe's third. We are looking at how we can expand the use of this within the U.S. market for automobiles. Clean coal technology. Half of our electricity comes from coal. We can get cleaner coal technology into coal plants. There are zero emission coal plants. It's going to make a huge difference in the emissions. That's what we've been investigating, is to actually try to get the technology in to do that.

Another thing we've been doing is we've been working with India and China and Australia, South Korea, Japan, through the Asia Pacific partnership which is a group of countries that includes half the world's population, half the world's output in terms of GDP, well more than half the world's greenhouse gas emissions, and trying to develop or implement the approach that I've just been talking about, which is one that combines the idea of human development -- which is what economic growth is all about -- with reducing greenhouse gas emissions by bringing cleaner technologies into markets.

They have achieved some reductions in their emissions and they are very enthusiastic about working together on a technology basis because they don't want to be in the position of having the developed world say we've got nice, lovely developed economies now and now we're making them cleaner. You can't grow any more, or you can't increase your greenhouse gas emissions, which is tantamount at this stage saying to saying no growth. Therefore, all the money that we give them in terms of development assistance for reducing poverty, for improving global health, for cleaner environment, for economic policy, for fostering growth and all that is money down the drain if we're actually sending a signal that they can't grow their economies.

They've got to have economic growth, and the idea is we've got to have clean technology to support cleaner economic growth in the developing world. So we've been working with those countries to do that. They're not part of Kyoto, they're not going to be part of Kyoto. They're very skeptical of that, but they are interested in reducing greenhouse gas emissions.

So after working through the Asia Pacific partnership we've gone back to the EU and we've said let's work in high-level dialogue between the U.S. and European Union on how can we work together to stimulate development of cleaner technology, whether it's fusion, solar, bio-fuels. How can we improve energy efficiency, you know, zero-energy buildings, and how can we bring these things into the market.

So we did this, we had a meeting in Finland in October. We've got a lot of working groups set up on different pieces of this now. We're going to meet again in the coming year. So we're very enthusiastic about this and we're doing an awful lot.

I don't think that is very well understood in Europe.

[ ...Intervening Text... ]