INTERNATIONAL ENVIRONMENTAL INTELLIGENCE BRIEF

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 0005284794
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 18
• Document Creation Date: June 24, 2015
• Document Release Date: May 27, 2011
• Case Number: F-2008-00831
• Publication Date: April 30, 1999

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International Environmental Intelli ence Brief
Contents
Issue 99/4 30 April 1999
Climate Change: Emissions Trading Proceeding on Two Tracks
Tokyo Struggling to Meet Emissions Reduction Targets
Page
1
China's Environmental Report Card
Jordanian Water Crisis Endurin
GMO Flap Rages Onl
Amazon Deforestation Severely Underestimated
APPROVED FOR RELEASEL
DATE: 17-May-2011
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 Climate Change: Emissions Trading
Proceeding on Two Tracks
Governments still are trying to forge a consensus
on the modalities for a trading system, while
firms in the private sector have established pilot
projects and begun to trade for early credit.
Germany-speaking for the EU and supported by
Austria, Denmark, France, and the UK-
continues to press members states to accept a
formula that ties emissions traded to domestic
emissions cuts ton for ton.
The UK position, however, is soft
because Chancellor of the Exchequer
Brown, in his budget last month,
recognized emissions trading as a cost-
effective way for energy-intensive firms
in the UK to reduce emissions and earn
credit for the "climate change levy"
imposed by the budget, according to
press reports.
Finland, the Netherlands, and Sweden
are balking at the German proposal
because they need emissions trading to
reach their national emissions targets,
Chinese and Indian diplomats continue to display
antimarket biases in the climate debate, arguing
in favor of government-to-government aid and
technology transfers.
re
BP/AMOCO has been trading emissions
allowances for seven months among, its
worldwide business units
As informal markets for emissions trading open ahead of
a formal diplomatic accord, trading firms are looking for
a signal from governments that they are on the right
path In addition to those
from the UK, the strongest signals so far have come
from the Norwegian legislature, which has encouraged
Statoil to engage in emissions trading as an effective
way to reach the national emissions target; British
Columbia, which has created a pilot emissions trading
program to reduce emissions; and New South Wales,
which has expressed support for such trading.
governments favor early trading by the
private sector to encourage formation of
a broad market with multiple firms
supplying liquidity
 Tokyo Struggling To Meet Emissions
Reduction Targets
Japan's environmental policymakers have
mapped out ambitious plans for meeting Japan's
emissions reduction target in the year and a half
since the Kyoto conference, but Tokyo is running
into difficulties reducing industrial and business-
related emissions, which make up 51.2 percent of
the country's greenhouse gas emissions,
Leading
Japanese business organizations are resisting
Environmental Agency efforts to impose sector-
specific targets that they say may hurt corporate
competitiveness, according to press reports.
-- Key politicians-including Obuchi.-
have shown little interest in forcing
businesses to take- such steps at a time
when the economy is still wobbly.
Most of the 37 international joint implementation
projects the Trade Ministry drew up last year also
appear to have run into problems. Moscow's
financial difficulties have stalled 20 projects in
Russia and an additional nine in China have
yielded mixed results
Rethinking Nuclear Power
These setbacks are forcing environmental
policymakers to rethink their approach and
support new nuclear power plant construction-a
move the Trade Ministry and business leaders
argue would enable Japan to meet its domestic
emissions targets without hurting industry. The
Obuchi administration earlier this month
approved a set of policies to promote emissions
reduction that emphasize the need to win public
support for nuclear energy.
Sec
-- The fiscal budget for this year includes
$52 million in incentives-including
housing development and job creation
measures-for localities where new
nuclear plants would be constructed
according to press reports
Tokyo nonetheless faces an uphill battle winning
support for the new plants. Public resistance to
nuclear plants has been rising in recent years in
the wake of leaks at existing facilities.
- A Japanese expert estimates such
opposition will force Tokyo to drop
plans for half of the 20 plants it wants to
build in the next decade
With unpromising prospects for domestic cuts
and for Japan's initial joint implementation
projects, Tokyo has few remaining options except
emissions trading. As a result, Tokyo may be
inclined to step up lobbying European
governments to drop their resistance to US calls
for unlimited emissions trading.
 Japan: An Uphill Battle To Reduce Emissiono
Percent
Business
(office buildings), 11.3
Transportation
(including autos), 19.2
Percent
8
International
effortsb
Forest
absorption
(sinks)
Domestic
measures
A number of obstacles are threatening Tokyo's carefully balanced strategy for meeting its emissions reduction target:
- Some commentators argue that industry has done so much to increase energy efficiency in the wake of successive
energy crises that few additional gains can be made in this area. Moreover, when the Japanese economy recovers,
transport and household emissions are projected to rise.
- Forested area has been shrinking by an average of 7 percent per year for the past decade, yet the Environment
Agency anticipates that achieving even a 0.3-percent cut will require substantial additional reforestation up to
47,400 acres per year.
- Japanese businesses have been reluctant to pursue clean development mechanism projects because of the
disappointing results thus far for the initial joint implementation projec
aTokyo claims it will have to cut emissions an additional 2 percent over its 6-percent target to meet the cuts in three additional
synthetic gases added to the Kyoto agreement.
bFor example, emissions trading.
Co tlal 36MIA14-99
 Se
 China's Environmental Report Card
China fell short of its ambitious environmental
objectives of last year. Beijing increased its
environmental expenditures to 1 percent of GDP,
but failed to meet the 1996-2000 Five-Year Plan
target of 1.3 percent a year. China claims many
infrastructure projects were delayed because of
floods last summer, according to official Chinese
press reports.
- Beijing claims to have approved 330
environment related projects last year
requiring a total investment of 107.6
billion yuan
The most notable development of last year was
Zhu's edict restricting logging-following last
summer's floods-which has led forest rangers to
handle more than 26,000 criminal cases last year,
according to official Chinese press reports. An
official Chinese press report claims that lumber
prices have risen in northeast and central China
suggesting some success.
- The State Forestry Administration
projects domestic lumber production
will decline 25 percent this year, with
imports expected to make up for the
shortfall.
Clean Air and Water
Official Chinese press reports indicate progress
has been made to Beijing's air quality in advance
of the 1 October celebration of the PRC's 50th
anniversary. In addition, progress has been made
cleaning up the Dian (Yunnan Province) and Tai
(Jiangsu Province) Lakes and Huai River (Anhui
and Jiangsu Provinces)
Chinese officials, however, admit that broader
efforts to meet nationwide clean air and water
standards are insufficient to meet year 2000
objectives, according to official Chinese press
reports. Recently released data covering nine
provinces indicate that, of all enterprises
surveyed, only 46 percent met clean water and 53
percent met clean air emissions standards.
- Of the cities surveyed, less than one-
fifth met water quality and less than
one-third met clean air standards.
- - Chinese officials admit little progress
has been made controlling erosion and
desertification.
Official Chinese press reports were generally
upbeat about the 9 April US-China Environment
and Development Forum. China's official news
service quoted Vice President Gore as noting the
US and China's "common interests" in the
environment and urging the two sides to "exert
themselves in this area. " The news service also
cited Zhu's statement that, since the first Forum
in 1997, the two countries have enjoyed `positive
and fruitful " cooperation.
 Montreal Protocol Violations Continue
Recent seizures of illicit chlorofluorocarbons
(CFCs) in Europe and the US indicate smugglers
continue to profit by marketing ozone-depleting
substances banned under the Montreal Protocol,
which allows developing countries to produce
CFCs until 2010 but bars them from exporting
these substances to developed countries.
10,000 to 20,000 metric tons of
CFCs enter the US each year
smugglers can earn as
much as $600 million annually from buyers in
Europe and the US. US Customs CFC
enforcement activities since 1994 have resulted in
more than 50 criminal convictions for violations
under the Clear Air Act. Black-market CFCs
cost the (1J 1 reasury more tnan ao
annually in lost excise tax revenue.
Stepping Up CFC Enforcement
EU member states-where many front companies
trade in illegal CFCs-have increased joint
enforcement efforts in response to pressure from
chemical industries and law enforcement
officials. Brussels early this year announced it
will accelerate the phaseout of methyl bromide
permit system to improve controls of legal
recycled CFCs imported for onward shipping,
and HCFCs-two other ozone depleting
substances-and has instituted a licensing and
import of recycled CFCs
of products containing CFCs, and banned the
Canada in January announced new enforcement
measures, It
banned HCFCs for use where alternatives exist,
instituted a new permit system to control exports
The Montreal Protocol's Multilateral Fund
executive committee last month announced a
$150 million project to phase out CFC production
at some 36 facilities in China during the next 11
years. The World Bank will be the implementing
agency, and, if successful, the plan will ensure
significant annual CFC reductions in China.
- The World Bank has a similar project
under way in Russia
 Jordanian Water Crisis Enduring
Jordan's water crisis will worsen in the next two
decades even as Amman moves to reform
wasteful practices and develop new sources.
Despite having the lowest per person
consumption rate in the Middle East-100 liters
per day-Jordan uses at least 882 million cubic
meters (mcm) per year, some 230 mcm more than
the renewable supply.
- The present crisis stems from dismal
rainfall this year-60 percent below
average-exacerbating the normal
shortage by 100 mcm.
- Even with new projects and more
efficient procedures
large shortfalls through 2020
To deal with the crisis this summer, Amman is
counting on Israel to deliver 55 mcm under the
terms of the 1994 peace agreement. In addition,
aid agencies are
spending $200 million to rebuild Amman's water
network, which loses 50 percent of its water load
through leakage and theft.
- Additional pumping from overexploited
aquifers to meet minimum demand
requirements will increase the chance
that these resources will be permanently
damaged by salt infiltration and
rendered unusable
Jordanian and Israeli officials provided different
interpretations of talks this month on Israel's
commitment to provide Jordan with water.
Amman maintains that Israel agreed to provide
43 mcm in the next several months while Israel
insists that it only agreed to deliver 40 mcm.
Israeli officials flatly reject the Jordanian
assertion that Israel should make up the
additional 12- to 15-mcm shortfall, as called for
by the 1994 agreement.
Jordan's water shortfall will increase if it
continues to devote the majority of its resources
to agriculture, but if Jordan strictly limits
agricultural allocations, improves its
infrastructure, and develops new sources, supply
shortages may stabilize at about 300 mcm per
year in the long term. Such policy moves,
however, would cause political and economic
strain.
Desalination-a widely touted solution for the
region's water woes-costs up to four times more
than surface water, making it prohibitive for large
agricultural uses. Academic experts estimate that
if Jordan had a storage facility on the Yarmouk
river-another option under consideration-it
would have access to at least an additional 75
mcm of water.
- Many water experts point to regional
water management projects as a better
means of increasing supply.
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GMO Flap Rages On
The international debate over trade in genetically
modified organisms has become increasingly
acrimonious since February, when negotiators
failed to reach consensus on a biosafety protocol.
"Designer genes" that enhance disease or
chemical resistance are controversial because
consumer and environmental groups in some
countries fear that unregulated releases of GMOs
could harm human health or the environment.
European Consumers Lead Protest
EU Firms Explore Biotech Markets
European biotech firms such as Germany's
AgrEvo are investing heavily in the $15 billion
global GMO and hybrid seed sector, according to
media reports, to avoid losing global market
share in agricultural products-increasingly
derived from transgenic seeds. A Swedish firm
in 1994 supplied 70 percent of the rapeseed sold
in the Canadian farm market now has only 20
percent of that market because new-mostly
US?-GMO varieties have become available.
The EU, which imports significant quantities of
US corn and soybean, favors a cautious approach
to GMO use in processed foods. Pressure from
consumers is growing for strict labeling laws-_
- The Commission's resignation in March
will delay approval of a firm labeling
policy, creating further uncertain
US and European food processor
Anti-GMO fever continues to turn violent in
some countries, with protesters destroying test
crops or vandalizing biotech firms. Seven Irish
protesters this month were found guilty of
damaging a crop of GMO sugar beets that a US
firm owned.
- Swedish farmers have joined with
German chemical giant BASF in a
biotech venture
and Sweden's
leading breeder of grains and oil seeds
planted several trial fields with GMO
rapeseed and potatoes last year.
- A German firm is awaiting EU approval
for its herbicide-resistant Liberty-Link
corn being field-tested in Brazil,
according to press reports.
Some non-EUcountries are implementing their
own GMO rules to address consumer concerns in
the absence o fan international biosa e
protocol.
adopt rules to restrict GMOs
Africa are among those that have or plan to
Brazil, India, Malaysia, and South
trade barriers
The biosafety issue will not be resolved until at
least May of next year when the Conference of
Parties to the Convention on Biodiversity
convenes. GMO restrictions also will be
discussed in the WTO as unacceptable nontariff
 Amazon Deforestation Severely
Underestimated
More than twice as much forest in Brazil's
Amazon is being destroyed each year than was
previously estimated, according to scientists from
Woods Hole Research Center. The new estimate
accounts for isolated logging and forest fires,
activity that previous studies have generally
excluded.
Over the past three decades, logging by
itself has been responsible for the loss
of an area greater than the size of
France.
In response to the findings, IBAMA-the
Brazilian federal government agency in charge of
environmental protection-has begun stepping up
enforcement of a law that imposes stiff fines and
jail sentences for pollution and deforestation.
IBAMA inspectors last month identified the
owners of 10 ranches where the most extreme
deforestation occurred during the period 1997-98.
-- None of the owners had applied for
permission to clear the land
 Brazil: Logging Centers Are Biggest Culprit in Amazon Deforestation)
Forested
Nonforested
o' Logging center
0 200 400 I4Iometers
0 260 400 MJes
The 75 logging centers shown are responsible for
more than 90 percent of Amazonian timber
production. Deforestation committed at the centers is
largely undetected by satellite imagery because their
smaller scale land clearings can leave the protective
canopy overhead largely intact. (Nature 4/8/99)
In 1998, Brazil exported 1.1 billion dollar's worth of
Unc
 Se t
 In Brief
 - ----------- _- ---.--_t-- -
 Selected
Environment-Related
International Meetings
3-4 May
US-Brazil Common Agenda
Washington
3-14 May
Third Session of the Intergovernmental Forum
on Forests
Geneva, Switzerland
10-18 May
Seventh Conference of Parties to the Ramsar
Convention (Wetlands)
San Jose, California
24 May - 4 June
Twenty-third Antarctic Treaty Consultative
Meeting
Lima, Peru
25-28 May
OSCE Economic Forum on Environmental
Aspects of Security
Prague, Czech Republic
31 May - 2 June
ECOSUD 99-Second International Conference on
Ecosystems and Sustainable Development
Lemnos, Greece
31 May - 11 June
Climate Change Convention Subsidiary
Bodies Meeting
Bonn, Germany
July
Hemispheric Energy Ministerial: Clean
Energy Initiatives
Washington
9-13 September
APEC Senior Officials Meeting
Auckland, New Zealand
4-8 October
Biodiversity Convention Expert Panel on Access
and Benefit Sharing
TBD
25 October-
5 November
Fifth Session of the Conference of Parties to the
Climate Change Convention
Bonn, Germany
15-26 November
Third Session of the Conference of Parties to the
UN Convention to Combat Desertification
Recife, Brazil
10-16 December
Sixth International Conference on Acid Rain
Deposition: Acid Rain 2000
Tsukuba, Japan