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Despite round the clock meetings, no deal on greenhouse gas emissions has been reached at the Kyoto Conference.

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MARGARET WARNER: From the beginning debate over global warming has had as much to do with politics and economics as science, and the climate conference in Kyoto, Japan, these past 10 days was no exception. More than 1500 delegates from more than 150 countries attended. Their job was to come up with a treaty to cut greenhouse gas emissions worldwide. But there were just as many lobbyists and activists on hand all trying to affect the outcome. Lobbyists for major energy producers and other corporate interests seemed to be everywhere buttonholing delegates. Environmentalists were just as active inside the conference center and out. The delegates had several proposals to consider. The United States wanted the industrialized countries to stabilize their emissions at 1990 levels by the year 2012 and insisted that the developing countries make some sort of commitment as well. The Europeans wanted to roll back emissions even further to 15 percent below 1990 levels by the year 2010. The developing countries were insisting that they be given a pass for now, while the rich nations take the first steps to solve the problem they had created.

LAW HIENG LINDH, Environment Minister, Malaysia: Those countries, which have a historical responsibility for polluting our atmosphere, remain reluctant to keep their promises because they claim economy price is too high. In reality, they know it is because they are unwilling to moderate their excessive consumption and their wasteful lives--lifestyles.

MARGARET WARNER: By last weekend, with the conference more than half over, negotiations were at a stalemate. On Monday, Vice President Gore came to Kyoto to try to jumpstart the talks.

SPOKESMAN: Vice President Gore, we await your announcement with baited breath.

MARGARET WARNER: In a speech to the conference he signaled that the Clinton administration was ready to move a bit in the Europeans’ direction.

VICE PRESIDENT GORE: I’m instructing our delegation right now to show increased negotiating flexibility.

MARGARET WARNER: But he didn’t give any specifics, and at first some delegates were disappointed.

RITT BJERREGAARD, Environment Commissioner, European Union: We in the EU are disappointed. The rhetoric was not matched by the reality.

MARGARET WARNER: But Gore’s offer proved to be the catalyst for renewed efforts to get a deal. The final two days of the conference saw nearly round-the-clock meetings among the delegates racing to beat the midnight Wednesday deadline. At the same time back in Washington President Clinton was holding telephone talks with other heads of state. But even so, midnight came and went without an agreement. Still, the chief negotiators kept pursuing a deal. At one point a visibly angry chairman of the conference, Raul Estrada of Argentina, told delegates he was concerned that "We are about to blow up the whole possibility of an agreement." But in the early morning hours in Japan negotiations still continued.

MARGARET WARNER: Joining us now with the latest on the Kyoto conference is Jim Steinberg, the deputy national security adviser to the President. Do you have a deal?

JIM STEINBERG, Deputy National Security Adviser: We’ve stopped the clock. Everyone’s working very hard. There’s been real progress in the last 24 hours. I think that under American leadership and the impetus that the Vice President gave that we’ve really come close to a framework where the developed countries are going to show some real leadership but we’re not quite there yet.

MARGARET WARNER: All right. And what’s the hang-up?

JIM STEINBERG: I think that there are a number of pieces, and they’re all related to each other. We want to get a good agreement in Kyoto. We want an agreement that really begins to deal with this very serious and important problem of climate change, but one that’s realistic, one that can really make a difference in solving the problem. We want to get a good result there.

MARGARET WARNER: Well, all the reports are that you did finally reach agreement with the Europeans, the Japanese, the other industrialized countries, but it’s the developing countries and their concerns that are still the problem, is that it?

JIM STEINBERG: I think there’s been a real convergence among the developed countries. I think the proposals that the Vice President brought really under the kind of framework that the President set out have led to a consensus among developed countries of what they’re prepared to do and the kind of leadership that they’re prepared to give. But we need to make sure that we have the kind of flexibility and the market mechanisms that allow us to do this very important piece of work in the most cost effective manner. There are a lot of technical issues out there. They’re working very hard at it. I think over the last few hours we’ve seen some real progress, and we’re hopeful, but we want to make sure it’s a good deal.

MARGARET WARNER: But do you think--do you still have the prospect of getting the developing countries to agree to something?

JIM STEINBERG: I think it’s important to understand that what we’re doing--this historic meeting in Kyoto--is the first step in what is going to be a long process in dealing with a very large and very complicated problem. What we’re doing is getting to put together a framework in Kyoto. It’s got some very good provisions. We hope that we’ll get there to an agreement in the next few hours, but that won’t be the end of the process. We’ll see how far we get in terms of developing country participation. We may well need to seek to get more. But we have opportunities in the future to do that, and the President has made clear that this is a global problem; it requires a global solution; and that at the end of the day the only solution that will really make a difference is one that involves in a meaningful way developing countries.

MARGARET WARNER: A representative of one of the major business lobbying groups who’s over in Kyoto told our reporter, Scott Tong, just a half an hour ago that essentially the developing countries’ voluntary participation had been dropped.

JIM STEINBERG: Well, I--

MARGARET WARNER: Is that the case?

JIM STEINBERG: We’re still in the negotiations, and we’ve seen provisions come in and out over the course of the last several hours. I don’t want to try to predict what’s going to be in the final treaty. But let me say this; that we will make a judgment after this is completed. We clearly are on our way towards a framework for the developed countries. But we need to have developing countries’ participation. And as we try to decide when and under what circumstances we go forward with bringing this treaty to the Senate, we’re going to make sure that we’ve got meaningful developing countries’ participation before we do that.

MARGARET WARNER: Now, the developing countries have argued--and we had the Indian ambassador on last night, of course--that, of course, they’re trying to eradicate poverty, and they just cannot do that and at the same time worry about holding down emission levels; that we polluted the atmosphere, we in the rich countries, and we ought to take the first steps. What kind of arguments have the Vice President and the President and all of you who have been involved used to try to persuade them otherwise?

JIM STEINBERG: The President and the Vice President see a great opportunity here for developing countries. What we’re talking about is not necessarily limiting their growth, but having them grow in a more efficient way, a way that has much less pollution. There’s an opportunity with all the technology that’s been developed over the years, since we went through our periods of development, to allow them to grow fast but using new technologies, using clean energy technologies, using renewable resources to get that same level of growth. And we prepared to do through programs such as joint implementation, where companies in the developed world work with companies in the developing world, to share that technology, to share the benefits of all the research and the science that we’ve done so that they can grow fast but grow clean.

MARGARET WARNER: And did you feel that was persuasive with any of these countries?

JIM STEINBERG: Well, we actually had some very important developments. You know, this idea of joint implementation, of developed countries working with developing countries, was something that several months ago was very deeply resisted. But now I think there’s a very good chance that’s going to be in this agreement, and I think it’s a real first step. We’ve made some progress. We haven’t made all the progress we wanted to make in developing countries, but it shows that there are opportunities to go forward, and we’re going to continue to press that in the months ahead.

MARGARET WARNER: Now, the Senate, of course, the Senate did vote to essentially reject any treaty that didn’t include the developing countries. If you can’t get that in this treaty, is it worth having?

JIM STEINBERG: I think what is important here is that we are taking a first step; that we’re providing a framework that developed countries are coming around a sort of consensus as to how to proceed on the developed countries’ side, with flexible market mechanisms that allow us to trade emission rights, so we can do it in a more cost-effective way, and that’s part of the problem, part of the solution to the problem, but only part of it. It’s good to get this first piece in place. We’re now going to work to get the rest of the pieces that we need, so that we have a comprehensive solution.

MARGARET WARNER: All right. Well, let’s turn now to the big part of the deal, which is the developed countries. Now, the administration, from reports, sounds like it came quite a ways. You all were saying 1990 levels was it. And the reports we’re getting is that you’re now willing to agree to 7 percent below 1990 levels. Is that in the right ball park, and, if so, why?

JIM STEINBERG: This is, Margaret, this is one of the most complicated parts of the negotiation because there’s a lot of comparing of apples and oranges. There are a lot of accounting questions. For example: How do you treat forests, which not only don’t put carbon dioxide in the air but take it out? Do you count those as credits? So when you hear the numbers, they don’t always compare to each other. The President indicated that he wanted to try to get something around 1990 levels by the period of 2008 to 2012. It looks like the negotiators are going to accept that budget period, which gives us a good decade to get a good head start on it before the obligations kick in. The exact numbers will depend a lot on some of these technical decisions. It may be that in the end that we’ve gone a little bit further in terms of what we’re prepared to do, but it will be roughly in the same framework that the President set out, with all the protections to try to get efficient use through emissions trading, through joint implementation that are so important to doing this the right way.

MARGARET WARNER: One of the arguments you were making to the Europeans, who were saying you weren’t going far enough--and we heard the Vice President do this in Kyoto--he said, you know, 1990 levels for the U.S., given how fast it’s growing, that’s really going to be a 34 percent cut from where we would be in what, 2010 or something. Are you still aiming for that, or are you saying now that the U.S. may even be willing to reduce further?

JIM STEINBERG: We’ll have to see how it comes out in the final results. It may be that we’re prepared, that the final number will be a somewhat more ambitious effort, but it will still be in the basic ball park that we believe the kind of market-based proposal that the President has recommended that’s going to be given with a program of $5 billion in tax cuts and incentives for R&D and getting that technology into our economy is a way of stimulating what is in the interest of the United States to have a more cost effective, more energy efficient system. We’ve got a lot of things we can do in America--electricity restructuring, for example, and deregulation offers an opportunity to get tremendous improvements in our efficiency without additional cost to the consumer.

MARGARET WARNER: Now, you keep saying it’s market based, but the industry opponents to this say that’s part of the problem, that ultimately the market base is you want to reduce the burning of fossil fuels. It means higher energy costs. That’s the way to do it, and it’s going to cost, you know, billions of dollars and millions of jobs.

JIM STEINBERG: Well, the strategy that the President and the Vice President want to pursue here, which they believe, and there’s a lot of support for, is the idea that we can get that technology out there. There’s a lot of technology which needs to be taken up, used more effectively in our economy, things like electricity restructuring offer us tremendous opportunity. We think we can get a long way towards those goals. And that’s why there is this important period of a decade where we can begin to put these things in, begin early now with joint implementation to try to get those early gains that can have a big impact and lower the burden as we go forward.

MARGARET WARNER: So how would you rate the prospects now?

JIM STEINBERG: I think that, you know, we’re encouraged by what we saw over the last several hours. As I said, we think we’re within reach of a good first step, a good framework for how the developed countries should take on their responsibilities, this historic agreement to finally tackle a problem, you know, that has such enormous impact on the lives of people. The kind of changes that we’re talking about can lead to rising sea levels, dramatic changes in the frequency and the severity of storms, of the spread of tropical diseases, of even for small island nations the possibility of disappearing altogether; we have an obligation to the future to begin to take those steps. What we’ll do in Kyoto, if we get an agreement in the next few hours, won’t solve all the problems, but it is a historic and important first step.

MARGARET WARNER: And we saw in the setup piece about all the business and environmental lobbyists that are over in Kyoto. Have they played a big role, do you think, in the deliberations and in affecting the course of these negotiations?

JIM STEINBERG: I think one of the remarkable things about modern international negotiations is we see the public more and more involved. It’s not just business. And it’s not just environmental groups. There are all kinds of citizens who have knowledge and expertise, who come and participate. We now frequently bring members of Congress, non-governmental organizations, as part of our delegations because they can contribute a lot. I think that the best result comes when we get all the facts on the table, when people hear all the arguments, and when the negotiators in the end come together and try to craft a treaty. A hundred and sixty countries--an enormously complicated problem--they’ve been working very hard, and we hope that in the next few hours they’ll be able to reach a result.

MARGARET WARNER: There have also been some members of Congress over in Kyoto, and there have been some discouraging words coming from them both from the Republican and Democratic sides today about either the--I don’t know what the word is there--the ability of what you’re working on to be ratified. The Senate Majority leader, Trent Lott, also sort of threw cold water on it. How much does that worry you?

JIM STEINBERG: Well, I think first we have to see what kind of--whether we can reach agreement and what it looks like. Second, as I said, you know, it may well be that particularly with respect to developing countries that we don’t have all we think is necessary to make for a good and comprehensive package. Once we see what we’ve got in Kyoto we’re going to decide when and under what circumstances we want to take the final result to the Congress. There’s another meeting of the parties coming up next November in Buenos Aires. That’s an opportunity to address some of the areas where there may be shortfalls in this. We need to take this first step. It’s really encouraging that the EU and Japan and Russia, Ukraine, Australia, and New Zealand have all been able to get together, even though they have very different circumstances, and come together with a common approach. That, I think, will help stimulate the understanding and the willingness of developing countries to do more. But we’re going to need to see that because it is a global problem. It does require global participation.

MARGARET WARNER: All right. Well, thanks very much.

JIM STEINBERG: Thank you, Margaret.

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