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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. | :00:00. | |
Now on BBC News, it's time for Hardtalk. | :00:00. | :00:08. | |
Welcome to HARDtalk, I'm Stephen Sackur. | :00:09. | :00:20. | |
My guest today is Fatih Birol, executive director of the | :00:21. | :00:23. | |
International Energy Agency and one of the most influential observers | :00:24. | :00:25. | |
of the global energy market, about how the price of oil has more than | :00:26. | :00:29. | |
Great news if you're an oil consumer but it's alarming if your priority | :00:30. | :00:33. | |
is to wean the world's economy off carbon emitting fossil fuels. | :00:34. | :00:37. | |
Does cheap oil make decarbonising the world | :00:38. | :00:39. | |
Fatih Birol, welcome to HARDtalk. Thank you. It seems you have the | :00:40. | :01:22. | |
zeal of a convert. He began your professional life working for OPEC, | :01:23. | :01:29. | |
the petroleum exporting company. You now run the IEA and you seem to be | :01:30. | :01:35. | |
somewhat obsessed with encouraging your members in the rich world to | :01:36. | :01:40. | |
transform their economies away from carbon. Is that a fair summary of | :01:41. | :01:47. | |
your journey? That is almost fair. Energy has a big responsibility when | :01:48. | :01:54. | |
it comes to climate change. More than two thirds of the emissions | :01:55. | :01:59. | |
causing climate change come from that sector. Without fixing the | :02:00. | :02:03. | |
problem within that sector, we have no chance whatsoever to solve our | :02:04. | :02:08. | |
climate problem. As a human being, a grandfather, I would like to see | :02:09. | :02:15. | |
that our climate is protected, and the way to protect it is through | :02:16. | :02:25. | |
suggesting smart energy policies moving away from carbon. When the | :02:26. | :02:31. | |
IEA was set up, it was designed to be a lobby group for the rich | :02:32. | :02:38. | |
countries of the world to ensure the oil supply and stability of the | :02:39. | :02:44. | |
price as best they could. You say you want it to be an international | :02:45. | :02:49. | |
hub on clean energy? You are completely rethinking what it's all | :02:50. | :02:53. | |
about? That is completely true. I started my new job on September the | :02:54. | :03:00. | |
first. There were two major priorities. The first one was, it | :03:01. | :03:06. | |
had been known as the organisation of rich countries. Oil consumers and | :03:07. | :03:14. | |
importers. Yes. But we are opening our to emerging countries like | :03:15. | :03:21. | |
China, Indonesia, and Mexico is going to become a member. At the | :03:22. | :03:33. | |
same time, we have important positions in gas and coal, it is | :03:34. | :03:41. | |
time for IEA to become a hub for clean energy technologies and | :03:42. | :03:44. | |
efficiency. So you basically want to encourage members to get into a sort | :03:45. | :03:51. | |
of post- carbon economic model? It still seems that there is a clear | :03:52. | :03:55. | |
and obvious correlation across the world between economic growth and | :03:56. | :04:01. | |
the use of carbon, and carbon emissions? I think there is some | :04:02. | :04:08. | |
good news here. But you are completely right. You look at the | :04:09. | :04:15. | |
last four decades, whenever the global economy grew, so did | :04:16. | :04:17. | |
emissions. There were three exceptions. The financial crash in | :04:18. | :04:26. | |
the 1980s, the early 1990s collapse of the Soviet Union and 2009 when | :04:27. | :04:38. | |
there was a financial crisis. But 2014 and 2015, the last two years, | :04:39. | :04:45. | |
global economics grew 3% at the global emissions stayed flat for the | :04:46. | :04:50. | |
first time. We have seen a happy divorce between the economic growth | :04:51. | :04:57. | |
and emissions. But those are in a sense backward looking figures, | :04:58. | :05:02. | |
because they reflect previous years. What we have had for the last two | :05:03. | :05:08. | |
years is a plunging oil price, it is only a $47 a barrel. That means | :05:09. | :05:17. | |
that, once again, it is cheaper for people to turn to fossil fuels. Oil | :05:18. | :05:22. | |
and gas are much cheaper. It is economic for people to use them in a | :05:23. | :05:29. | |
greater way. So the happy divorce you have talked about may have been | :05:30. | :05:35. | |
short lived. I hope not, because some divorces are happy with good | :05:36. | :05:39. | |
results. Here, the reason we have seen that divorce is because | :05:40. | :05:48. | |
energies affect markets very strongly, including wind and solar | :05:49. | :05:53. | |
power. It is not just a romantic story, they are mainstream fuels. | :05:54. | :05:58. | |
Efficiency also became very important. They were driven with | :05:59. | :06:04. | |
high oil prices, and now we are entering an era where fossil fuels | :06:05. | :06:12. | |
and renewable energy prices are viable. If you take the global | :06:13. | :06:17. | |
energy mix today, renewables still only represent less than 20% of | :06:18. | :06:22. | |
overall energy use, which means that 80% is still traditional fossil fuel | :06:23. | :06:30. | |
based. It seems that a logical conclusion would be that we will see | :06:31. | :06:34. | |
the trajectory of emissions go up. I hope not. There is a question that | :06:35. | :06:40. | |
the lower fossil fuel prices can complicate the transition to cleaner | :06:41. | :06:44. | |
fuels, unless governments do not take the measures. Why would | :06:45. | :06:55. | |
companies invest in electric car technology is? Why would the next | :06:56. | :07:00. | |
generation of investors look to that sector when, as far as we can see, a | :07:01. | :07:06. | |
much lower oil and petrol price is a reality for years to come? I believe | :07:07. | :07:14. | |
the oil prices may rebound sometime soon. In any case... I think 2017 | :07:15. | :07:21. | |
might be the year where we see the rebound. In any case, in absence | :07:22. | :07:27. | |
government support, electric cars will never be able to compete with | :07:28. | :07:34. | |
the cars we have now. What I want to say is, in Paris we had a very | :07:35. | :07:42. | |
important climate meeting. 90 countries signed the agreement. What | :07:43. | :07:49. | |
they said is, we want to see change. Since the fossil fuel prices are | :07:50. | :07:54. | |
lower, there is a litmus test for those governments whether or not | :07:55. | :07:58. | |
they are seriously committed to what they have said. Whether they support | :07:59. | :08:04. | |
renewables and other clean energy technologies. Your analysis of where | :08:05. | :08:11. | |
governments seek, we will get that in a minute. I want to hear what you | :08:12. | :08:15. | |
think is going to happen to the and gas price over the next five years. | :08:16. | :08:18. | |
You are suggesting that it will rebound quite significantly? What is | :08:19. | :08:26. | |
happening is that, in the last two years, oil investments have | :08:27. | :08:33. | |
declined. 2015, 2016. Investment in exploration? Exploration, | :08:34. | :08:41. | |
production. The value of oil, when the demand goes up, we might have | :08:42. | :08:46. | |
difficulties in the markets. In the history of oil, we have not seen two | :08:47. | :08:53. | |
years in a role John McEnroe, that decline. We might pay a high price | :08:54. | :08:58. | |
for that. Haven't the rules changed? One of the big new producers on the | :08:59. | :09:02. | |
block is the United States. As I understand it, it is pretty easy to | :09:03. | :09:07. | |
switch on and off? It is not easy, they need some time to adjust. They | :09:08. | :09:13. | |
need about one year or so in order to see the price comeback. The | :09:14. | :09:21. | |
investment did decline, and the biggest hit came to the United | :09:22. | :09:24. | |
States, Canada and other high cost producers. Staying with the energy | :09:25. | :09:30. | |
market for a minute, in a sense, what we've seen in the last year or | :09:31. | :09:35. | |
so is a battle of wills between big, traditional and cheap producers, | :09:36. | :09:42. | |
dominated by Saudi Arabia, and on the other side, the United States | :09:43. | :09:49. | |
who have developed new sources and who are not tied into the same | :09:50. | :09:53. | |
system. The Saudi Arabians have continued to produce at a high level | :09:54. | :09:57. | |
because they appear determined to knock the Americans out of the | :09:58. | :10:02. | |
market. In that battle, who is winning and who will win? When we | :10:03. | :10:09. | |
look at the results today, it seems that there is a significant decline | :10:10. | :10:15. | |
in the production outside of the Middle East, for the United States, | :10:16. | :10:21. | |
Canada, Latin America, soon in the rush. Therefore a real way will | :10:22. | :10:28. | |
increase. So the strategy of maintaining their market share, even | :10:29. | :10:35. | |
with lower prices, that is winning? If they are prepared to take the | :10:36. | :10:39. | |
short-term pain of seeing their margins reduced? Low prices, $50 or | :10:40. | :10:47. | |
below, many of the high cost producers would suffer, including | :10:48. | :10:52. | |
the US, Canadian oil and others. But of course, many countries have | :10:53. | :10:58. | |
different levels of impact from the lower oil prices. There are very big | :10:59. | :11:04. | |
losers and there are winners. Losers are Saudi Arabia, Brazil. Very big | :11:05. | :11:14. | |
losers at Nigeria, Brazil, Angola, Roche. There are some countries who | :11:15. | :11:20. | |
benefit from that, like India, Japan or Europe. The trade improves | :11:21. | :11:27. | |
substantially from the law oil prices. When only you, I want to | :11:28. | :11:32. | |
know what your vision is for the oil price going on forward -- when I | :11:33. | :11:39. | |
meet you. Where will we be in five years time? By law, I cannot make a | :11:40. | :11:46. | |
focus on prices. What I can say is that I would expect the oil prices, | :11:47. | :11:55. | |
they were about $35 in January. Five years at this level is not a | :11:56. | :12:00. | |
realistic expectation. We should expect upward pressure on the | :12:01. | :12:06. | |
prices. Do you want to put a figure on it? Back to $100 a barrel? Or is | :12:07. | :12:14. | |
that history? I would never say anything is history, we will see an | :12:15. | :12:25. | |
upward pressure on the prices. Not just talking about oil. We have | :12:26. | :12:28. | |
talked about your desire to encourage your members in the agency | :12:29. | :12:34. | |
to clean up, reduce emissions and reliance on fossil fuels. It is not | :12:35. | :12:39. | |
just the low oil price that is a problem, coal is unbelievably | :12:40. | :12:44. | |
cheap. If we look at the consumption of coal, it is going down in Europe, | :12:45. | :12:50. | |
but it is huge in countries like India, which is a very important | :12:51. | :12:53. | |
part of the world economy. Isn't that another problem for your vision | :12:54. | :12:59. | |
of a clean energy future? Very much so. My vision is not just for my | :13:00. | :13:08. | |
members but for the entire world. For India, China, and other | :13:09. | :13:12. | |
countries that have a lot of coal. You are completely right. Today, | :13:13. | :13:17. | |
about 40% of emissions come from coal worldwide. You will not go from | :13:18. | :13:24. | |
one day to another to lower rates. Some countries like India... If it | :13:25. | :13:30. | |
doesn't come down, it isn't this vision that you lay down, getting | :13:31. | :13:37. | |
global temperature change to stay below two degrees and aiming for 1.5 | :13:38. | :13:42. | |
degrees, that is totally and utterly impossible given the wild's current | :13:43. | :13:48. | |
reliance on coal? You are completely right, that is why we are saying | :13:49. | :13:55. | |
that one should and could be production of coal powerplants in | :13:56. | :14:02. | |
some countries. They should be able to be efficient, low emission | :14:03. | :14:12. | |
powerplants. You cannot say to India or any poor country, where 324 | :14:13. | :14:16. | |
million people have no access to electricity, don't use coal because | :14:17. | :14:25. | |
you are putting emissions. China, England, USA, they get richer from | :14:26. | :14:31. | |
not putting emissions into the atmosphere. You cannot say that to | :14:32. | :14:37. | |
the poorer countries. There is no large-scale, commercially viable | :14:38. | :14:44. | |
carbon storage available in the developing world. How do you think | :14:45. | :14:48. | |
India can build a coal power station and be part of this clean energy | :14:49. | :14:50. | |
future? India need carbon capture and | :14:51. | :15:02. | |
storage. They don't have it. They can have high-efficiency power | :15:03. | :15:09. | |
plants. We shouldn't see India only building those power plants. They | :15:10. | :15:14. | |
have aggressive programmes in terms of solar power and nuclear. We | :15:15. | :15:23. | |
should implicate India in the bigger picture. A country of 320 million | :15:24. | :15:28. | |
people who have no access to electricity. Put things in context. | :15:29. | :15:35. | |
In the rich world, look at Europe, other countries, the share of coal | :15:36. | :15:43. | |
is declining rapidly. In the United States, a big decline of coal. They | :15:44. | :15:47. | |
are exporting it, not digging it out of the ground, selling it to | :15:48. | :15:51. | |
Indians. Internally, it has almost collapsed. It has been replaced by | :15:52. | :15:59. | |
natural gas. You talk about the onus on the Indian government to deliver | :16:00. | :16:03. | |
if it is possible. High-efficiency coal powered by a station, some | :16:04. | :16:12. | |
would argue any coal is bad... There are real questions for the rich | :16:13. | :16:18. | |
world. In the UK, as we speak, there is a very sensitive discussion in | :16:19. | :16:21. | |
the North of England about whether to undertake fracking, this process | :16:22. | :16:29. | |
to deliver the shale gas from under the ground. The government has put a | :16:30. | :16:34. | |
ban on it. It could be lifted. There are potentially trillions of cubic | :16:35. | :16:39. | |
metres of gas and the north of the UK. With your influence and | :16:40. | :16:43. | |
knowledge of the energy market, does it make sense for a country like the | :16:44. | :16:50. | |
UK to invest in fracking? The United States, as a result of fracking, had | :16:51. | :16:59. | |
a revolution. The result was substantially lower emissions. Call | :17:00. | :17:04. | |
has been replaced by shale gas. -- Coal. Australia has done the same | :17:05. | :17:13. | |
thing. If, in the UK, we can reduce shale gas using sustainable fracking | :17:14. | :17:14. | |
technologies with strict regulations which can be done... That is highly | :17:15. | :17:23. | |
dubious. Many people say the evidence if you cannot help but | :17:24. | :17:27. | |
contaminate water supplies and create environmental problems. You | :17:28. | :17:35. | |
can do it if the companies invest a bit more than they normally would. | :17:36. | :17:41. | |
7% more capital investment would mean all this amount can be | :17:42. | :17:48. | |
addressed, this amount of problems. This would require strict government | :17:49. | :17:54. | |
regulations. Is on the bottom line that the only way to deliver cleaner | :17:55. | :18:03. | |
decarbonise energy in the future which you have talked about is to | :18:04. | :18:07. | |
put a meaningful price on carbon? -- Isn't the. A carbon tax which is | :18:08. | :18:13. | |
mandatory around the world not just in one country and EU, a global | :18:14. | :18:21. | |
carbon tax. -- the EU. This would be the best solution for everybody but | :18:22. | :18:25. | |
some solutions and the nature of life, there is some divergences | :18:26. | :18:32. | |
that. If you want a global price you have to think about the suffering | :18:33. | :18:39. | |
from the carbon price. It will take time. To be more direct. I use the | :18:40. | :18:49. | |
words of Sir David King, the former UK climate change envoy and | :18:50. | :18:52. | |
specialist, he says, I simply do not see India, China, or South Africa | :18:53. | :18:57. | |
coming in with a significantly higher carbon price to drive them | :18:58. | :19:04. | |
away from their reliance on coal. It isn't going to happen. I am not as | :19:05. | :19:08. | |
prisoners thick as David but I will say it is a very long shot. -- | :19:09. | :19:16. | |
pessimistic. If it is done only in the rich world it would help | :19:17. | :19:21. | |
competitiveness. Therefore, as some companies do, to put it all over the | :19:22. | :19:27. | |
carbon price or nothing, it may mean the government regulation, in the | :19:28. | :19:33. | |
meantime, we cannot quite enough emphasis on regulation and | :19:34. | :19:38. | |
efficiency improvements. There are real problems with trying to | :19:39. | :19:41. | |
convince everyone in the world it is a fair playing field. That | :19:42. | :19:45. | |
competitiveness is being maintained. In the UK, we have a Chancellor of | :19:46. | :19:50. | |
the Exchequer who has taken money away from investments and | :19:51. | :19:54. | |
initiatives. He has reduced subsidies for solar and for onshore | :19:55. | :20:01. | |
wind. There is the suggestion that he believes that some of this green | :20:02. | :20:05. | |
commitment has gotten in the way of economic growth. That is a problem, | :20:06. | :20:11. | |
isn't it? I should say, there are many renewable technologies, onshore | :20:12. | :20:17. | |
wind, compared with five years ago, the cost went down by one third. | :20:18. | :20:25. | |
Solar, down by 80%. You said the governments need to increase | :20:26. | :20:30. | |
initiatives. But the fact is they are. Yeah. The support you give | :20:31. | :20:37. | |
today may be different. We are becoming much more economical. -- | :20:38. | :20:40. | |
they aren't. We have to think about the projects which need a kick off | :20:41. | :20:47. | |
subsidy. But to subsidise production through a lifetime may require | :20:48. | :20:53. | |
second thought. Nevermind that sort of nuanced debate in the UK and at | :20:54. | :20:57. | |
maintaining subsidies, there is a bigger elephant in the room. -- | :20:58. | :21:04. | |
about. Donald Trump. He says he would look very, very seriously at a | :21:05. | :21:12. | |
minimum agreement made in Paris. Maximum, I might try to do something | :21:13. | :21:16. | |
completely different. Withdraw the US on that agreement altogether. He | :21:17. | :21:20. | |
said that. How worried are you abour a Donald Trump presidency for the | :21:21. | :21:27. | |
future? -- about a. It was a great success, in Paris. Not according to | :21:28. | :21:36. | |
Donald Trump. The leaders of that success story, the US and China, | :21:37. | :21:41. | |
supported by European countries. President Obama's leadership was | :21:42. | :21:45. | |
extremely instrumental for the success stories. I hope that the | :21:46. | :21:54. | |
government of the US signed an agreement to fulfil its promise, | :21:55. | :21:59. | |
whoever comes to the White House. I hope somebody comes to the White | :22:00. | :22:05. | |
House who takes climate change seriously and helps the world to | :22:06. | :22:08. | |
fight this very important challenge ahead of us. What would the impact | :22:09. | :22:15. | |
be, how negative, would be if an American president reached the White | :22:16. | :22:19. | |
House and store up the Paris agreement? Lower fossil fuel prices | :22:20. | :22:28. | |
will complicate the transition to clean energy. This would further | :22:29. | :22:33. | |
complicate the transition to clean energy technologies. We have to end | :22:34. | :22:38. | |
soon. I want to come back to this fundamental point you made, that you | :22:39. | :22:41. | |
believe the last two years have given us the signal that it is | :22:42. | :22:46. | |
possible to decouple economic growth from rising carbon emissions. Where | :22:47. | :22:51. | |
would you say the biggest challenge is today? Is it in the US, China, | :22:52. | :22:58. | |
India? Where is the biggest challenge? It is more the emerging | :22:59. | :23:04. | |
countries, such as China, India, and more and more Africa. These are the | :23:05. | :23:11. | |
areas we need to help. They need prosperity. People need better | :23:12. | :23:17. | |
lives. But they need a low carbon footprint. Africa, for example, when | :23:18. | :23:22. | |
you look at the history, as I said, all of the countries became rich by | :23:23. | :23:28. | |
using fossil fuels. Africa can be the first region in the world which | :23:29. | :23:34. | |
can realise economical benefits by using green energy mainly. You miss | :23:35. | :23:40. | |
out on the phase of relying on carbon altogether? Exactly. To | :23:41. | :23:47. | |
reason. They have huge resources. -- two reasons. The cost of green | :23:48. | :23:52. | |
energy today is much lower than it was 20 years ago. China started to | :23:53. | :23:59. | |
grow and before the US started to grow. It can be the first region in | :24:00. | :24:04. | |
the world that can grow using mainly renewables. They can use gas, for | :24:05. | :24:11. | |
example. But solar and wind are key options. Can we keep you load the | :24:12. | :24:23. | |
two degrees target? -- below. I certainly hope so. And we are doing | :24:24. | :24:28. | |
everything we can. Dr Fatih Birol, thank you very much for being on | :24:29. | :24:30. | |
Seminole Hard Rock Hotel and Casino. Thank you very much. -- | :24:31. | :24:35. | |
being on HARDtalk. For many places Monday was | :24:36. | :24:44. | |
a good-looking day, we had a lot of dry weather, | :24:45. | :24:46. | |
plenty of sunshine and through the afternoon in the sunniest places | :24:47. | :24:49. | |
it actually turned quite warm. This is quite a typical picture | :24:50. | :24:52. | |
of what Monday looked | :24:53. | :24:56. |