:00:00. > :00:00.In his victory speech, the new president said he accepted
:00:00. > :00:00.that many people believed they were not being heard.
:00:00. > :00:08.Now on BBC News, it's time for Hardtalk.
:00:09. > :00:20.Welcome to HARDtalk, I'm Stephen Sackur.
:00:21. > :00:23.My guest today is Fatih Birol, executive director of the
:00:24. > :00:25.International Energy Agency and one of the most influential observers
:00:26. > :00:29.of the global energy market, about how the price of oil has more than
:00:30. > :00:33.Great news if you're an oil consumer but it's alarming if your priority
:00:34. > :00:37.is to wean the world's economy off carbon emitting fossil fuels.
:00:38. > :00:39.Does cheap oil make decarbonising the world
:00:40. > :01:22.Fatih Birol, welcome to HARDtalk. Thank you. It seems you have the
:01:23. > :01:29.zeal of a convert. He began your professional life working for OPEC,
:01:30. > :01:35.the petroleum exporting company. You now run the IEA and you seem to be
:01:36. > :01:40.somewhat obsessed with encouraging your members in the rich world to
:01:41. > :01:47.transform their economies away from carbon. Is that a fair summary of
:01:48. > :01:54.your journey? That is almost fair. Energy has a big responsibility when
:01:55. > :01:59.it comes to climate change. More than two thirds of the emissions
:02:00. > :02:03.causing climate change come from that sector. Without fixing the
:02:04. > :02:08.problem within that sector, we have no chance whatsoever to solve our
:02:09. > :02:15.climate problem. As a human being, a grandfather, I would like to see
:02:16. > :02:25.that our climate is protected, and the way to protect it is through
:02:26. > :02:31.suggesting smart energy policies moving away from carbon. When the
:02:32. > :02:38.IEA was set up, it was designed to be a lobby group for the rich
:02:39. > :02:44.countries of the world to ensure the oil supply and stability of the
:02:45. > :02:49.price as best they could. You say you want it to be an international
:02:50. > :02:53.hub on clean energy? You are completely rethinking what it's all
:02:54. > :03:00.about? That is completely true. I started my new job on September the
:03:01. > :03:06.first. There were two major priorities. The first one was, it
:03:07. > :03:14.had been known as the organisation of rich countries. Oil consumers and
:03:15. > :03:21.importers. Yes. But we are opening our to emerging countries like
:03:22. > :03:33.China, Indonesia, and Mexico is going to become a member. At the
:03:34. > :03:41.same time, we have important positions in gas and coal, it is
:03:42. > :03:44.time for IEA to become a hub for clean energy technologies and
:03:45. > :03:51.efficiency. So you basically want to encourage members to get into a sort
:03:52. > :03:55.of post- carbon economic model? It still seems that there is a clear
:03:56. > :04:01.and obvious correlation across the world between economic growth and
:04:02. > :04:08.the use of carbon, and carbon emissions? I think there is some
:04:09. > :04:15.good news here. But you are completely right. You look at the
:04:16. > :04:17.last four decades, whenever the global economy grew, so did
:04:18. > :04:26.emissions. There were three exceptions. The financial crash in
:04:27. > :04:38.the 1980s, the early 1990s collapse of the Soviet Union and 2009 when
:04:39. > :04:45.there was a financial crisis. But 2014 and 2015, the last two years,
:04:46. > :04:50.global economics grew 3% at the global emissions stayed flat for the
:04:51. > :04:57.first time. We have seen a happy divorce between the economic growth
:04:58. > :05:02.and emissions. But those are in a sense backward looking figures,
:05:03. > :05:08.because they reflect previous years. What we have had for the last two
:05:09. > :05:17.years is a plunging oil price, it is only a $47 a barrel. That means
:05:18. > :05:22.that, once again, it is cheaper for people to turn to fossil fuels. Oil
:05:23. > :05:29.and gas are much cheaper. It is economic for people to use them in a
:05:30. > :05:35.greater way. So the happy divorce you have talked about may have been
:05:36. > :05:39.short lived. I hope not, because some divorces are happy with good
:05:40. > :05:48.results. Here, the reason we have seen that divorce is because
:05:49. > :05:53.energies affect markets very strongly, including wind and solar
:05:54. > :05:58.power. It is not just a romantic story, they are mainstream fuels.
:05:59. > :06:04.Efficiency also became very important. They were driven with
:06:05. > :06:12.high oil prices, and now we are entering an era where fossil fuels
:06:13. > :06:17.and renewable energy prices are viable. If you take the global
:06:18. > :06:22.energy mix today, renewables still only represent less than 20% of
:06:23. > :06:30.overall energy use, which means that 80% is still traditional fossil fuel
:06:31. > :06:34.based. It seems that a logical conclusion would be that we will see
:06:35. > :06:40.the trajectory of emissions go up. I hope not. There is a question that
:06:41. > :06:44.the lower fossil fuel prices can complicate the transition to cleaner
:06:45. > :06:55.fuels, unless governments do not take the measures. Why would
:06:56. > :07:00.companies invest in electric car technology is? Why would the next
:07:01. > :07:06.generation of investors look to that sector when, as far as we can see, a
:07:07. > :07:14.much lower oil and petrol price is a reality for years to come? I believe
:07:15. > :07:21.the oil prices may rebound sometime soon. In any case... I think 2017
:07:22. > :07:27.might be the year where we see the rebound. In any case, in absence
:07:28. > :07:34.government support, electric cars will never be able to compete with
:07:35. > :07:42.the cars we have now. What I want to say is, in Paris we had a very
:07:43. > :07:49.important climate meeting. 90 countries signed the agreement. What
:07:50. > :07:54.they said is, we want to see change. Since the fossil fuel prices are
:07:55. > :07:58.lower, there is a litmus test for those governments whether or not
:07:59. > :08:04.they are seriously committed to what they have said. Whether they support
:08:05. > :08:11.renewables and other clean energy technologies. Your analysis of where
:08:12. > :08:15.governments seek, we will get that in a minute. I want to hear what you
:08:16. > :08:18.think is going to happen to the and gas price over the next five years.
:08:19. > :08:26.You are suggesting that it will rebound quite significantly? What is
:08:27. > :08:33.happening is that, in the last two years, oil investments have
:08:34. > :08:41.declined. 2015, 2016. Investment in exploration? Exploration,
:08:42. > :08:46.production. The value of oil, when the demand goes up, we might have
:08:47. > :08:53.difficulties in the markets. In the history of oil, we have not seen two
:08:54. > :08:58.years in a role John McEnroe, that decline. We might pay a high price
:08:59. > :09:02.for that. Haven't the rules changed? One of the big new producers on the
:09:03. > :09:07.block is the United States. As I understand it, it is pretty easy to
:09:08. > :09:13.switch on and off? It is not easy, they need some time to adjust. They
:09:14. > :09:21.need about one year or so in order to see the price comeback. The
:09:22. > :09:24.investment did decline, and the biggest hit came to the United
:09:25. > :09:30.States, Canada and other high cost producers. Staying with the energy
:09:31. > :09:35.market for a minute, in a sense, what we've seen in the last year or
:09:36. > :09:42.so is a battle of wills between big, traditional and cheap producers,
:09:43. > :09:49.dominated by Saudi Arabia, and on the other side, the United States
:09:50. > :09:53.who have developed new sources and who are not tied into the same
:09:54. > :09:57.system. The Saudi Arabians have continued to produce at a high level
:09:58. > :10:02.because they appear determined to knock the Americans out of the
:10:03. > :10:09.market. In that battle, who is winning and who will win? When we
:10:10. > :10:15.look at the results today, it seems that there is a significant decline
:10:16. > :10:21.in the production outside of the Middle East, for the United States,
:10:22. > :10:28.Canada, Latin America, soon in the rush. Therefore a real way will
:10:29. > :10:35.increase. So the strategy of maintaining their market share, even
:10:36. > :10:39.with lower prices, that is winning? If they are prepared to take the
:10:40. > :10:47.short-term pain of seeing their margins reduced? Low prices, $50 or
:10:48. > :10:52.below, many of the high cost producers would suffer, including
:10:53. > :10:58.the US, Canadian oil and others. But of course, many countries have
:10:59. > :11:04.different levels of impact from the lower oil prices. There are very big
:11:05. > :11:14.losers and there are winners. Losers are Saudi Arabia, Brazil. Very big
:11:15. > :11:20.losers at Nigeria, Brazil, Angola, Roche. There are some countries who
:11:21. > :11:27.benefit from that, like India, Japan or Europe. The trade improves
:11:28. > :11:32.substantially from the law oil prices. When only you, I want to
:11:33. > :11:39.know what your vision is for the oil price going on forward -- when I
:11:40. > :11:46.meet you. Where will we be in five years time? By law, I cannot make a
:11:47. > :11:55.focus on prices. What I can say is that I would expect the oil prices,
:11:56. > :12:00.they were about $35 in January. Five years at this level is not a
:12:01. > :12:06.realistic expectation. We should expect upward pressure on the
:12:07. > :12:14.prices. Do you want to put a figure on it? Back to $100 a barrel? Or is
:12:15. > :12:25.that history? I would never say anything is history, we will see an
:12:26. > :12:28.upward pressure on the prices. Not just talking about oil. We have
:12:29. > :12:34.talked about your desire to encourage your members in the agency
:12:35. > :12:39.to clean up, reduce emissions and reliance on fossil fuels. It is not
:12:40. > :12:44.just the low oil price that is a problem, coal is unbelievably
:12:45. > :12:50.cheap. If we look at the consumption of coal, it is going down in Europe,
:12:51. > :12:53.but it is huge in countries like India, which is a very important
:12:54. > :12:59.part of the world economy. Isn't that another problem for your vision
:13:00. > :13:08.of a clean energy future? Very much so. My vision is not just for my
:13:09. > :13:12.members but for the entire world. For India, China, and other
:13:13. > :13:17.countries that have a lot of coal. You are completely right. Today,
:13:18. > :13:24.about 40% of emissions come from coal worldwide. You will not go from
:13:25. > :13:30.one day to another to lower rates. Some countries like India... If it
:13:31. > :13:37.doesn't come down, it isn't this vision that you lay down, getting
:13:38. > :13:42.global temperature change to stay below two degrees and aiming for 1.5
:13:43. > :13:48.degrees, that is totally and utterly impossible given the wild's current
:13:49. > :13:55.reliance on coal? You are completely right, that is why we are saying
:13:56. > :14:02.that one should and could be production of coal powerplants in
:14:03. > :14:12.some countries. They should be able to be efficient, low emission
:14:13. > :14:16.powerplants. You cannot say to India or any poor country, where 324
:14:17. > :14:25.million people have no access to electricity, don't use coal because
:14:26. > :14:31.you are putting emissions. China, England, USA, they get richer from
:14:32. > :14:37.not putting emissions into the atmosphere. You cannot say that to
:14:38. > :14:44.the poorer countries. There is no large-scale, commercially viable
:14:45. > :14:48.carbon storage available in the developing world. How do you think
:14:49. > :14:50.India can build a coal power station and be part of this clean energy
:14:51. > :15:02.future? India need carbon capture and
:15:03. > :15:09.storage. They don't have it. They can have high-efficiency power
:15:10. > :15:14.plants. We shouldn't see India only building those power plants. They
:15:15. > :15:23.have aggressive programmes in terms of solar power and nuclear. We
:15:24. > :15:28.should implicate India in the bigger picture. A country of 320 million
:15:29. > :15:35.people who have no access to electricity. Put things in context.
:15:36. > :15:43.In the rich world, look at Europe, other countries, the share of coal
:15:44. > :15:47.is declining rapidly. In the United States, a big decline of coal. They
:15:48. > :15:51.are exporting it, not digging it out of the ground, selling it to
:15:52. > :15:59.Indians. Internally, it has almost collapsed. It has been replaced by
:16:00. > :16:03.natural gas. You talk about the onus on the Indian government to deliver
:16:04. > :16:12.if it is possible. High-efficiency coal powered by a station, some
:16:13. > :16:18.would argue any coal is bad... There are real questions for the rich
:16:19. > :16:21.world. In the UK, as we speak, there is a very sensitive discussion in
:16:22. > :16:29.the North of England about whether to undertake fracking, this process
:16:30. > :16:34.to deliver the shale gas from under the ground. The government has put a
:16:35. > :16:39.ban on it. It could be lifted. There are potentially trillions of cubic
:16:40. > :16:43.metres of gas and the north of the UK. With your influence and
:16:44. > :16:50.knowledge of the energy market, does it make sense for a country like the
:16:51. > :16:59.UK to invest in fracking? The United States, as a result of fracking, had
:17:00. > :17:04.a revolution. The result was substantially lower emissions. Call
:17:05. > :17:13.has been replaced by shale gas. -- Coal. Australia has done the same
:17:14. > :17:14.thing. If, in the UK, we can reduce shale gas using sustainable fracking
:17:15. > :17:23.technologies with strict regulations which can be done... That is highly
:17:24. > :17:27.dubious. Many people say the evidence if you cannot help but
:17:28. > :17:35.contaminate water supplies and create environmental problems. You
:17:36. > :17:41.can do it if the companies invest a bit more than they normally would.
:17:42. > :17:48.7% more capital investment would mean all this amount can be
:17:49. > :17:54.addressed, this amount of problems. This would require strict government
:17:55. > :18:03.regulations. Is on the bottom line that the only way to deliver cleaner
:18:04. > :18:07.decarbonise energy in the future which you have talked about is to
:18:08. > :18:13.put a meaningful price on carbon? -- Isn't the. A carbon tax which is
:18:14. > :18:21.mandatory around the world not just in one country and EU, a global
:18:22. > :18:25.carbon tax. -- the EU. This would be the best solution for everybody but
:18:26. > :18:32.some solutions and the nature of life, there is some divergences
:18:33. > :18:39.that. If you want a global price you have to think about the suffering
:18:40. > :18:49.from the carbon price. It will take time. To be more direct. I use the
:18:50. > :18:52.words of Sir David King, the former UK climate change envoy and
:18:53. > :18:57.specialist, he says, I simply do not see India, China, or South Africa
:18:58. > :19:04.coming in with a significantly higher carbon price to drive them
:19:05. > :19:08.away from their reliance on coal. It isn't going to happen. I am not as
:19:09. > :19:16.prisoners thick as David but I will say it is a very long shot. --
:19:17. > :19:21.pessimistic. If it is done only in the rich world it would help
:19:22. > :19:27.competitiveness. Therefore, as some companies do, to put it all over the
:19:28. > :19:33.carbon price or nothing, it may mean the government regulation, in the
:19:34. > :19:38.meantime, we cannot quite enough emphasis on regulation and
:19:39. > :19:41.efficiency improvements. There are real problems with trying to
:19:42. > :19:45.convince everyone in the world it is a fair playing field. That
:19:46. > :19:50.competitiveness is being maintained. In the UK, we have a Chancellor of
:19:51. > :19:54.the Exchequer who has taken money away from investments and
:19:55. > :20:01.initiatives. He has reduced subsidies for solar and for onshore
:20:02. > :20:05.wind. There is the suggestion that he believes that some of this green
:20:06. > :20:11.commitment has gotten in the way of economic growth. That is a problem,
:20:12. > :20:17.isn't it? I should say, there are many renewable technologies, onshore
:20:18. > :20:25.wind, compared with five years ago, the cost went down by one third.
:20:26. > :20:30.Solar, down by 80%. You said the governments need to increase
:20:31. > :20:37.initiatives. But the fact is they are. Yeah. The support you give
:20:38. > :20:40.today may be different. We are becoming much more economical. --
:20:41. > :20:47.they aren't. We have to think about the projects which need a kick off
:20:48. > :20:53.subsidy. But to subsidise production through a lifetime may require
:20:54. > :20:57.second thought. Nevermind that sort of nuanced debate in the UK and at
:20:58. > :21:04.maintaining subsidies, there is a bigger elephant in the room. --
:21:05. > :21:12.about. Donald Trump. He says he would look very, very seriously at a
:21:13. > :21:16.minimum agreement made in Paris. Maximum, I might try to do something
:21:17. > :21:20.completely different. Withdraw the US on that agreement altogether. He
:21:21. > :21:27.said that. How worried are you abour a Donald Trump presidency for the
:21:28. > :21:36.future? -- about a. It was a great success, in Paris. Not according to
:21:37. > :21:41.Donald Trump. The leaders of that success story, the US and China,
:21:42. > :21:45.supported by European countries. President Obama's leadership was
:21:46. > :21:54.extremely instrumental for the success stories. I hope that the
:21:55. > :21:59.government of the US signed an agreement to fulfil its promise,
:22:00. > :22:05.whoever comes to the White House. I hope somebody comes to the White
:22:06. > :22:08.House who takes climate change seriously and helps the world to
:22:09. > :22:15.fight this very important challenge ahead of us. What would the impact
:22:16. > :22:19.be, how negative, would be if an American president reached the White
:22:20. > :22:28.House and store up the Paris agreement? Lower fossil fuel prices
:22:29. > :22:33.will complicate the transition to clean energy. This would further
:22:34. > :22:38.complicate the transition to clean energy technologies. We have to end
:22:39. > :22:41.soon. I want to come back to this fundamental point you made, that you
:22:42. > :22:46.believe the last two years have given us the signal that it is
:22:47. > :22:51.possible to decouple economic growth from rising carbon emissions. Where
:22:52. > :22:58.would you say the biggest challenge is today? Is it in the US, China,
:22:59. > :23:04.India? Where is the biggest challenge? It is more the emerging
:23:05. > :23:11.countries, such as China, India, and more and more Africa. These are the
:23:12. > :23:17.areas we need to help. They need prosperity. People need better
:23:18. > :23:22.lives. But they need a low carbon footprint. Africa, for example, when
:23:23. > :23:28.you look at the history, as I said, all of the countries became rich by
:23:29. > :23:34.using fossil fuels. Africa can be the first region in the world which
:23:35. > :23:40.can realise economical benefits by using green energy mainly. You miss
:23:41. > :23:47.out on the phase of relying on carbon altogether? Exactly. To
:23:48. > :23:52.reason. They have huge resources. -- two reasons. The cost of green
:23:53. > :23:59.energy today is much lower than it was 20 years ago. China started to
:24:00. > :24:04.grow and before the US started to grow. It can be the first region in
:24:05. > :24:11.the world that can grow using mainly renewables. They can use gas, for
:24:12. > :24:23.example. But solar and wind are key options. Can we keep you load the
:24:24. > :24:28.two degrees target? -- below. I certainly hope so. And we are doing
:24:29. > :24:30.everything we can. Dr Fatih Birol, thank you very much for being on
:24:31. > :24:35.Seminole Hard Rock Hotel and Casino. Thank you very much. --
:24:36. > :24:44.being on HARDtalk. For many places Monday was
:24:45. > :24:46.a good-looking day, we had a lot of dry weather,
:24:47. > :24:49.plenty of sunshine and through the afternoon in the sunniest places
:24:50. > :24:52.it actually turned quite warm. This is quite a typical picture
:24:53. > :24:56.of what Monday looked