Press Gaggle by Dana Perino, Dan Price, Assistant to the President for International Economic Affairs and Deputy National Security Advisor, and Jim Connaughton, Chairman of the Council on Environmental Quality

Windsor Hotel Toya Resort and Spa
Toyako, Japan

2:34 P.M. (Local)

MS. PERINO: We have limited time, but we wanted to make sure that we got down here to have Dan Price, who's been, obviously, the President's sherpa, to give you a readout of today's meetings. So far -- he has to get back to his sherpa duties at 3:00 p.m., so he'll run through this quickly. He'll take two or three questions, and then if you have additional ones on climate change we have Jim Connaughton, who's also familiar with the material. So we'll let Dan give you a readout.

MR. PRICE: Good afternoon. We had two very good sessions today thus far, the first one on world economy -- that was this morning; and then we had a lunch discussion on environment and climate change. And I'd like to go through the highlights of those two. The relevant portions of the text are out on these two issues. I don't know if you've had a chance to review them yet, but the G8 declaration on world economy and on environment and climate change are now released and available.

Let me start with world economy. There were three broad topics, three main topics of discussion: First, while the economy is generally positive, leaders are concerned about the rise in food and oil prices. We need to take concrete steps to address those, and in particular, on oil, we need to take concrete steps to address supply and demand.

Third key message was on pushing back on protectionism and the need to advance trade and investment liberalization. There was discussion on how to enhance energy security both dealing with the current oil situation, but also the need to move economies from dependence on hydrocarbons. A number of leaders stressed the importance of nuclear energy. There was broad agreement that greater transparency in markets, oil markets, would lead to a better functioning of those energy markets and, hence, better balance between demand and supply.

The leaders agreed to establish and hold an energy forum to focus on energy efficiency and new technologies. Leaders reiterated their commitment to the St. Petersburg energy security principles and welcomed national reports on implementation; use of principles concerned; pledges to maintain open, transparent, efficient and competitive markets for energy transparency; rule of law; stable and effective legal and regulatory frameworks.

Let me shift to Doha. There was wide recognition and support for the importance of the conclusion of a balanced Doha Round that achieves positive and tangible results in agriculture, industrial goods and services. All of the countries in the room shared the view this was not something developed countries could alone do, but that a successful Doha Round would depend on the major emerging economies also doing their part to open their markets. Given the vast amount of trade that is among developing countries, for the Doha Round to fulfill its mission of lifting millions out of poverty, we will need market openings and trade liberalization in the major emerging markets, as well.

There was broad recognition of the importance of international investment flows, and ensuring nondiscriminatory treatment, and there is also in the declaration an elaboration of certain core principles on investment liberalization and protection.

Let me move on to environment and climate change: an excellent discussion and an excellent declaration. There is significant progress in this G8 declaration in four very important respects. First, in years past, it is fair to say that the G8 was focused on what the G8 alone would do to address energy security and emissions, and this declaration represents a significant advance on prior discussions in these two ways: First there was agreement among the G8 that they should seek to share with the other parties to the U.N. Convention a vision of a low-carbon society, and with all the parties to the U.N. Convention, consider and adopt a goal of reducing emissions by at least 50 percent by 2050.

Second, there was recognition by the G8 -- and it's reflected in the declaration -- that all major economies, developed and developing, must commit to meaningful midterm mitigation actions. And the declaration reflects the view of the G8 leaders that those actions, those meaningful mitigation actions, need to be bound in a new international agreement.

The G8 leaders reinforced these points by stating that achieving the ultimate objective of the Convention, on stabilizing greenhouse gases, will only be possible "through common determination" of all major economies. The declaration points out that this global challenge requires a global response that includes contributions from all major economies. There's also a strong statement on the importance of working together on adaptation, as well as mitigation.

The second important point of progress, in years past the issue of emissions reduction and technology development were often looked at separately. They were compartmentalized. We had, okay, let's talk about emission reductions, over here, and let's talk about technology development over there, as if these were two separate or unrelated efforts. Today the G8 leaders stated clearly that progress towards ambitious emission reduction goals can only be achieved through accelerated adoption of existing technologies, as well as stronger, more urgent commitments by G8 countries to develop and deploy a new generation of technologies.

In that respect, at the President's urging, the leaders collectively have committed to annually dedicate $10 billion to technology research and development, and the U.S. will be investing nearly half that amount, covering a quite broad range of technology needs and opportunities. The G8, as reflected in this declaration, is also embarking on the most ambitious energy efficiency agenda to date, seeking to implement in each country the 25 International Energy Agency recommendations, as well as launching an international partnership for energy efficiency cooperation.

Third, in years past there have been general discussions about helping developing countries with new technologies. Today, again at the President's urging, many of the G8 leaders have specifically committed to support the Clean Technology Fund. And we have commitments of slightly north of $5 billion. This fund will actually lower the cost of financing clean energy projects in developing countries, and help potentially leverage even greater amounts of public and private sources of financing.

Linked to the issue of deployment of technologies of course is the elimination of trade barriers. And in this regard, the G8 leaders have made their strongest statement to date about the importance and urgency of reaching agreement in the Doha trade negotiations on the elimination of trade barriers to the deployment of clean energy technology and services, particularly in key developing countries.

The fourth item of progress -- and perhaps one of the most important and overlooked elements of progress since last year -- is that we have now had four major economies meetings, leading up to tomorrow's meetings of the leaders of the major economies. And for the first time, leaders of the countries with the largest energy consumption and the greatest emissions will be sitting together to pursue common ground in support of a new climate agreement under the U.N. Framework Convention on Climate Change.

The G8 had endorsed President Bush's proposal last year for such an effort, and the leaders of the other major economies soon joined in support. Confidence in the value of this effort was built after the successful U.N. meetings in Bali. In the space of a short nine months, the major economies have had a broad agenda in addressing some of the most challenging issues relating to long-term cooperation, long-term goals, midterm national goals and plans, as well as tangible near-term opportunities for making progress.

Through this series of major economies meetings we've had focus and really good discussions at the highest levels, and this has enabled us, we believe, to move beyond many of the artificial as well as divisive distinctions of the past. All of the leaders now understand that the progress we make this year is essential to making possible broad international agreement in the U.N. at the end of next year.

The G8 declaration is a significant contribution both to the U.N. negotiations, as well as to the major economies process. Much work lies ahead, but right now we've got the right countries around the table, not only around the G8 table, but more importantly, around the broader major economies table, with an increasingly common sense of purpose and urgency to support global action.

Let me stop there.

Q: Dan, when this declaration was put out, was it with the anticipation on the part of the G8 members that the major economies tomorrow would follow suit and support these goals?

MR. PRICE: The G8 declaration makes clear that the G8 is not seeking to impose its view on anybody. In respect of the goal, the G8 declaration expressly states, we seek to share with all parties to the U.N. Convention the vision of, and together with them, to consider and adopt in the U.N. negotiations the goal of achieving at least a 50 percent reduction of global emissions by 2050.

So it's very clear that the G8 declaration, both in terms of long-term goal, in terms of the need for commitments by all major economies, the elements of financing and R&D, was speaking not only to the G8, but to the major economies and the broader group of parties to the U.N. Convention.

Q: Was there consultation with representatives from, say, China and India when this was formed?

MR. PRICE: The major economies declaration? Absolutely. The major economies --

CHAIRMAN CONNAUGHTON: Not consultation on the G8 text.

Q: No, I mean, did the G8 confer ahead of time with some of these major economies in putting together the G8 thing?

MR. PRICE: Well, the G8 countries sat with the other countries at the major economies table and worked out the terms of the major economies leaders' declaration. So -- or at least a draft. Obviously the leaders will discuss this tomorrow, and they will need to finalize and adopt it.

I think it's fair to say that the G8 declaration was prepared, and the discussions among the leaders took place fully bearing in mind that the next day we will have the meeting of the leaders of major economies.

Q: On the economic declaration, what steps does it require the United States to take now that you've agreed to that? Does it require that the United States take any steps regarding currency or, you know, its energy policy?

MR. PRICE: No, I don't think that the declaration requires the United States, per se --

Q: Right, but you are part of the G8. What do you see the United States having to do to sort of conform to these goals you set out today?

Q: In other words, is the U.S. bound by any --

MR. PRICE: In the world economy declaration?

Q: Yes.

MR. PRICE: The world economy declaration does not contain, per se, any specific commitments. Rather, it expresses the shared view of the G8 on actions that should be taken, for example, on trade and investment liberalization, on intensifying dialogue between consumers and producers of energy, about the need to maintain sound macroeconomic management, the need for enhanced dialogue with some emerging economies that have large and growing current account surpluses. So I think as you read this declaration, what you will see is the expression of a collective view on a number of the pressing problems, and some suggestions for approaches to those problems.

Q: Was there discussion about the dollar in the meetings?

MR. PRICE: The President, of course, reaffirmed the -- his interest in a strong dollar and his commitment to a strong dollar. There was a general discussion of exchange rates. I'll leave it at that.

Q: Just further on the economic stuff. Can you point to anything concrete in this -- in the economy document that changes anything as far as, say, the oil markets are concerned? You provide analysis, but are you providing any new steps that will, for instance, have a realistic probability of bringing down the price of oil?

MR. PRICE: I think the fact that the G8 is together addressing issues of long-term demand and supply, and sharing ideas of how these can be addressed and about bringing others into the dialogue is itself a very significant step.

Q: Is there anything that changes oil prices or attempts to get at the change of oil prices?

MR. PRICE: Could you repeat your question?

Q: Will oil prices change as a result of anything that's adopted here?

MR. PRICE: I certainly couldn't predict what the reaction of markets would be to the G8 declaration.

Q: But the G8 declaration, does it do anything at all to concretely deal with the soaring oil prices that have just hurt every economy, basically, that's in this group?

MR. PRICE: I think what I've tried to say -- and you'll be able to read the declaration for yourself -- it expresses the view of the G8, the strong concerns they have about the sharp price of oil prices, identifying the need for concerted efforts to address the underlying causes. It has some suggestions for focusing on the supply side, noting that production of refining capacities should be increased in the short term. It identifies some of the things that need to be done on the demand side.

So I would say there was a very thorough discussion, and I would refer you to the relevant passages of the declaration, as well as the Chairman's summary that will be coming out, I believe, at the end of the day, by Prime Minister Fukuda.

Q: Could I go back to climate change for a moment? So we've got the U.S. going -- or G8 going from "strongly consider" in '07, to "a shared vision" in '08? Is that about the sum and substance of it?

MR. PRICE: No, I think that's a complete mischaracterization --

Q: Is there anything binding in this?

MR. PRICE: What it says -- and I'd encourage you to read it -- it not only talks about sharing the vision of a low-carbon society, it expresses the view of the G8 that they are seeking -- seeking -- together with the other parties to the U.N. Convention, to consider and adopt a goal of achieving at least a 50 percent reduction -- all right? I noted that in our view, and in the view of the leaders in the room, this represents substantial progress from last year.

I realize there's a lot of interest in the long-term goal; it's a fairly detailed declaration that covers topics in addition to the long-term goal. And as importantly as the elaboration of a long-term goal is the sense of the G8, one, that the G8 alone cannot effectively address climate change, cannot effectively achieve this goal, but that contributions from all major economies are required. One.

Two, it reflects the sense of G8 that achieving that long-term goal, achieving effective solutions to climate change will depend on the development and deployment of clean technologies. These are significant advances over the collective thinking, and I think all leaders were pleased by this declaration.

MS. PERINO: We have time for one more.

Q: Can I ask a follow-up question? Chancellor Merkel came out this morning and said something about she was optimistic, satisfied that things could be wrapped up or completed in a couple weeks. Was that -- is that optimism shared by other members? Or when she said a couple weeks, do you know what she was talking about, exactly?

MR. PRICE: Yes, I do. She was, I think, anticipating the fact that we will have a ministerial on July 21. You know, I think all leaders share the view that they would like a prompt conclusion to the Doha Round, but that the Doha Round must be balanced and it must cover all three critical areas of agriculture, industrial goods and services. They also shared the view that there will need to be meaningful market openings by the major developing countries in order for this round to succeed. It is not simply a question of balance and relative contribution of parties in the Doha Round, but if the mission of the Doha Round -- and we support this mission -- is poverty alleviation, is development, then the major developing markets need to open their markets to other developing countries, given the rapid increase in trade among developing countries themselves.

Okay, thank you. Thank you very much. It was really a great discussion in both sessions.

MS. PERINO: Any last ones on climate change, or other topics I can handle?

Q: On climate change. Can you just -- just to clarify, the structure of this language around the long-term commitment -- it is in effect saying that you are not binding yourselves as the United States to a goal unless others come in with this as well. Is that the basic thinking? You're saying, we will play -- we would like to get everyone to agree to this, but until everyone agrees to it, we are not ourselves committed to it.

CHAIRMAN CONNAUGHTON: The concept of a long-term goal was first introduced at the G8 last year, pushed by Japan as well, and there's been convergence on the G8 vision as to how that should be carried out. It has always been the case that a long-term goal is a goal that must be shared. So what the G8 has offered today is a G8 view of what that goal could be and should be, but that can only occur with the agreement of all of the other parties to the U.N. Framework Convention on Climate Change.

So last year was an inwardly looking G8 statement; this year it's an outwardly looking G8 statement.

On the issue of convergence, by the way, if you look at the work that Chancellor Merkel did last year in Heiligendamm, and align that with the President's vision for a way forward on climate change that he gave in his speech last May, and that he amplified further on in September, at the major economies, you will see in this G8 text a remarkable convergence on all of those points. And we're very pleased to see all of the major elements that the President proposed last year carried forward in this G8 declaration, and we look forward -- we're looking forward tomorrow to seeing them further advanced among the major economies.

Q: Could I just ask you something about conversations between -- that may take place between the President and Prime Minister Singh of India? What are you expecting to come out of these discussions? Are you expecting, in effect, to be told that there's an all clear for the nuclear deal to be implemented?

MS. PERINO: I think it's a little premature to say, but obviously we've maintained a strong commitment to carrying through on our side of the deal. And obviously India has had a lot of discussion amongst its political parties. It's been a long road, and there's been a healthy debate. And so, G8 meetings are good for a lot of reasons; one of those is so that all leaders can get together and have a discussion as a group. But also, they're wonderful opportunities for bilateral discussions. And so the President takes advantage of as many opportunities as he can to meet with leaders on an individual basis.

He'll do that tomorrow with Prime Minister Singh. And we'll have to see what he's able to bring on the India Civil Nuclear Agreement. I would say it's premature to say right now, and we'll let him come and present what he has for the President. And it could be that he's ready to move forward, but it also could just as likely be that they have a little bit more work to do. But we obviously recognize, as well, that we have a limited number of legislative days for our Congress to get a lot of work done. So as soon as that meeting is over, we'll be able to hopefully provide you a readout.

Q: Thanks very much.

Q: You know, some people are going to look at the climate change document and perhaps say that the United States basically got the position that it had staked out all along, and the other countries who sort of wanted a firmer 50-by-50 agreement did not. What do you think of that?

CHAIRMAN CONNAUGHTON: If you look, as I indicated, at the five major points that the President advanced last May, which included the need for agreement on a long-term global goal, you have convergence among the G8 as to how that should be pursued, and that is an agreement among the G8. And each G8 country's leader is fully capable of deciding what is advancing the interests of each of their countries, and they reach agreement in the G8 on how to accomplish that.

And I also want to underline -- the long-term goal, the success of that is dependent on all of the other features of this shared G8 text, and the shared G8 commitment. It's very consequential that the first time the G8 has converged around the principle that all major economies need to take midterm goals and actions, and those need to be bound in a new agreement -- that's a major step forward in terms of G8 consensus.

Similarly, the G8 has fully endorsed the sectoral approaches that I discussed yesterday, the idea that we can build up international cooperation by focusing specifically on key large emitting sectors, and use that as a basis to build up national strategies. And as you recall, the President introduced the idea of a clean energy technology fund last year, with the strong support in particular of the U.K. and Japan. And that is now producing a donors group that is quite consequential. I mean, we have pledges I think of $6 billion identified in the declaration -- but we think it will grow from that -- coupled with the elimination of tariffs, which nobody was talking about before the President seriously -- before the President put that on the table last year.

Now, each G8 leader has reflected on the value and importance of each of those components and how they work together. And that's what makes this a particularly strong document in setting the stage for agreement next year. The G8 is giving a lot, but the G8 is also suggesting that others need to be part of that equation as well. And that's a very important shared statement by the leaders of the G8.

Q: Can I just ask one follow-up on that? When you talk about everyone agrees the need all major economies have to have medium-term goals and actions, is there agreement though on that these medium-term goals should be qualitative the same -- in other words, some are saying industrialized countries' whole economy emissions targets for the midterm, developing economies' commitments that fall short of economy-wide emissions targets, other commitments in terms of sectoral approaches, energy efficiency promotion, et cetera. Is that your understanding of it, or are you still pressing for the same type of commitments from both industrialized and developing countries?

CHAIRMAN CONNAUGHTON: Actually, the U.S. position has been there should be much greater flexibility in the approaches that each nation can take, as long as those approaches are comprehensive, has been the U.S. view. Other countries have expressed that differently. I think you will see in this -- the statement of the leaders a reflection of the need for greater flexibility, as long as it's accompanied by comprehensive action.

Also, as I mentioned yesterday, the G8 leaders have agreed that these plans and actions need to be bound in a new agreement; that they should be bound in an agreement. The content of those commitments, of course, will be differentiated in accordance with the U.N. principle of common but differentiated responsibilities. So as the year unfolds, each nation will be laying out different goals with a different portfolio of strategies to achieve them. And obviously we'll be looking at each other's approaches, in terms of the relative levels of ambition.

To remind you again what I said yesterday, the European Commission and the European Union, Canada and the U.S. currently are the only countries to have staked out an economy-wide goal for the midterm. But importantly, when you look at the programs that the EU has proposed, and the programs that Canada has proposed, and the programs that the U.S. actually has now put into legislation, they do use a diversity of approaches to achieve that economy-wide midterm goal. And so the reality of what's occurring even in the developed countries is that you have clearly stated midterm goals, but in support of them are a series of mandates, incentive-based programs, and technology partnerships that collectively work together to achieve the overall goal. No country has a one-size-fits-all legal construct. No country has that, and no country is proposing that going forward.

MS. PERINO: Okay? Thanks for sticking around.

END 3:09 P.M. (Local)