Limiting emissions trading in an international climate deal is “a real killer for us politically,” former President Clinton once warned British Prime Minister Tony Blair in one of a handful of phone calls the two leaders shared about the fallout from the Kyoto Protocol.

The transcripts of their conversations, released last week as part of a BBC Freedom of Information Act request, provide a window into the world of millennial climate politics.

In a November 2000 exchange, Clinton told Blair that while U.S. Republicans agreed that climate change was “a real problem,” they would be unlikely to accept any international agreement that wouldn’t allow a major role for market-based emissions trading.

Speaking to Blair at a time when the result of the 2000 presidential election was still in doubt—Clinton told his friend he was optimistic that Vice President Al Gore would prevail—the president cautioned that Europe must overcome its skepticism and embrace carbon trading as part of any global agreement to contain emissions.

“I think it is a mistake to put limits on emission trading, because that is a real killer for us politically,” Clinton told Blair. “I think it would be seen for what it is, that Europe wants to try to make America adopt its tax structure and reduce our emissions in the least efficient way. It would give us less incentive.”

He thanked the British and Dutch for “helping moderate the [E.U.] position so that we can all have agreement,” adding that the French and Germans “aren’t there yet.”

He went on to urge Blair to support the U.S. position in favor of more credit for carbon sequestered by forests and sinks, assuring him that it would allow the United States to curtail even more emissions.

‘On the phone a lot’ to save Kyoto
The exchange took place nearly three years after U.S. negotiators helped to broker the Kyoto Protocol, an international agreement that allowed wealthy countries to trade for emissions credits to cover some of their reduction responsibilities.

U.S. negotiators in 1997 bartered hard for the trading language, which was laid out in Article 17 of the agreement. David Doniger, now director of climate programs at the Natural Resources Defense Council, recalled that a proposal emerged late on the final night of talks that would have made trading conditioned on later agreement about its rules.

“It was probably a European Catch-22,” he said. But Doniger, who as a U.S. EPA official at the time was part of the U.S. delegation, said Americans pushed back, believing that a trading component would be key to eventual ratification.

In the end, they secured approval of trading, with rules to be adopted later. Republicans, meanwhile, soon soured on the idea of carbon markets.

The United States signed the deal the following year, but Clinton ultimately did not submit it for Senate approval. The Senate had overwhelmingly approved in July 1997 a resolution sponsored by then-Sens. Robert Byrd (D-W.Va.) and Chuck Hagel (R-Neb.) demanding that the United States only participate in a deal if developing countries were to share in mitigation commitments. The White House acknowledged that Kyoto didn’t meet that condition.

The transcripts released last week shows that Clinton was acutely aware of the Byrd-Hagel message as negotiations in Kyoto progressed.

In another conversation, dated December 1997, he told Blair he had been “on the phone a lot the last three or four days” and had “authorized our negotiators to show more flexibility.”

But he noted that developing countries must move more on Article 10 of the text, which would have allowed developing countries to choose to opt into mitigation commitments. In the end, developing countries rejected this language, and the deal that emerged from the historic Japanese capital assigned obligations to rich countries only based on the principle of common but differentiated responsibility.

Industrialized nations took binding commitments, while developing countries could not even volunteer to do so—an architecture that would survive until last month, when the 195 nations in Paris agreed to an accord that calls for all nations to commit to emissions cuts regardless of their level of development.

U.S negotiators had a major hand in knocking down the “firewall” between developed and developing countries. But Doniger said the effort in 1997 to at least allow developing countries to opt into binding commitments might have been enough to garner support for Democrats who voted for Byrd-Hagel. That, in turn, might have incrementally improved Kyoto’s chances in the Senate, he said.

Misplaced optimism?
Paul Bledsoe, who worked on climate change in the Clinton administration, said the president’s concern that the Kyoto Protocol would ultimately founder in the Senate was well-founded.

“Once the protocol was negotiated, it was obvious that the White House would never submit it for ratification,” he said, adding that to do so would be as quixotic as the vice president’s 1993 push for a broad-based energy tax. “It would have been a Gore special,” he said.

Still, the picture Clinton painted for Blair—a fellow center-left leader he was personally close to—shows how far climate politics has come since the late Clinton years.

Clinton, who in late 2000 was still hopeful that Gore would follow him to the White House, said even Republican presidential contender George W. Bush acknowledged climate change as a reality. Bledsoe attributed Clinton’s enthusiasm for carbon trading to a presidential effort to help grease the skids for any cap-and-trade proposal Gore would be likely to champion if he won.

Bush did express support for carbon restrictions during his race for the White House in 2000, though he would back away from those positions as president.

And the lame-duck Clinton appeared to still be optimistic that a climate deal would eventually be ratified by two-thirds of the Senate—a hurdle that has come to be viewed as impossibly high, even for international agreements on less contentious topics. In 2000, he gave Blair a primer on U.S. Senate politics if either Gore or Bush prevailed. Either way, a deal would have to be judged as favorable to the U.S. economy in order to win Senate acceptance, he said.

“There are enough Democrats from energy-producing areas that if this looks like we are getting a bad deal, that will hurt us,” he said. “It also sends the wrong message to developing countries.

“What matters is not the results, but how we achieve it. I think it is important to get an agreement. If we get no agreement, we just give the reactionaries an excuse to walk away,” Clinton said.

‘Working the phones’ à la Paris
The assessment seems surprisingly optimistic, even in the wake of last month’s agreement in Paris.

The newly minted deal, which is being hailed as a watershed moment in global climate policy, is designed to let the United States participate without formal ratification. The U.S. delegation to Paris hammered home the argument throughout the two-week conference that any provision that would make nations answerable to the United Nations for their reduction commitments would doom U.S. participation, forcing the United States to back away as it did after Kyoto.

The transcript also shows how far Europe has come from the late 1990s, when a trading scheme was seen there to be too lax.

Dirk Forrister, president of the International Emissions Trading Association, remembers that Blair’s negotiating team was a welcome set of “fresh legs” in the talks after years of minimal British involvement under Blair’s predecessor, John Major. Forrister, a top White House climate adviser at the time, said Blair’s deputy prime minister, John Prescott, was on the ground in Kyoto and played a particularly active role.

“In Kyoto, the E.U. was really skeptical on trading and wanted strict numerical limits on how much countries could purchase,” he said. “The U.S. side saw it differently. We couldn’t agree to significant and binding cuts unless we had flexibility to trade internationally, including use of sinks.”

Prescott and his team helped other Europeans realize that hard limits would be a nonstarter for the United States, Forrister said.

“The Europeans were unsure about doing it, and the U.S. certainly was the force behind it at the outset,” said David Waskow of the World Resources Institute. But with the United States out of the picture, other governments in developed regions, including the European Union, were left to participate in trading as part of Kyoto, and in 2005, the European Union launched its Emissions Trading System, which remains the world’s largest cap-and-trade program.

“I think once they started putting policies in place, then I think it became the thing they were invested in,” Waskow said.

Doniger said Clinton’s involvement was similar to what Obama did ahead of the Paris conference.

“What this is evidence of is that Bill Clinton was working the phones at a high level to try to pursue the U.S. diplomatic strategy in Kyoto and the Hague,” he said. “It’s probably obvious that Obama was doing that in connection with Paris. Who knows how many people Clinton was talking to, but Obama was lighting up the phones.

“This is what’s supposed to happen,” he said.

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC., 202-628-6500