Fatih Birol, executive director, International Energy Agency HARDtalk

In his victory speech, the new president said he accepted

that many people believed they were not being heard.

Now on BBC News, it's time for Hardtalk.

Welcome to HARDtalk, I'm Stephen Sackur.

My guest today is Fatih Birol, executive director of the

International Energy Agency and one of the most influential observers

of the global energy market, about how the price of oil has more than

Great news if you're an oil consumer but it's alarming if your priority

is to wean the world's economy off carbon emitting fossil fuels.

Does cheap oil make decarbonising the world

Fatih Birol, welcome to HARDtalk. Thank you. It seems you have the

zeal of a convert. He began your professional life working for OPEC,

the petroleum exporting company. You now run the IEA and you seem to be

somewhat obsessed with encouraging your members in the rich world to

transform their economies away from carbon. Is that a fair summary of

your journey? That is almost fair. Energy has a big responsibility when

it comes to climate change. More than two thirds of the emissions

causing climate change come from that sector. Without fixing the

problem within that sector, we have no chance whatsoever to solve our

climate problem. As a human being, a grandfather, I would like to see

that our climate is protected, and the way to protect it is through

suggesting smart energy policies moving away from carbon. When the

IEA was set up, it was designed to be a lobby group for the rich

countries of the world to ensure the oil supply and stability of the

price as best they could. You say you want it to be an international

hub on clean energy? You are completely rethinking what it's all

about? That is completely true. I started my new job on September the

first. There were two major priorities. The first one was, it

had been known as the organisation of rich countries. Oil consumers and

importers. Yes. But we are opening our to emerging countries like

China, Indonesia, and Mexico is going to become a member. At the

same time, we have important positions in gas and coal, it is

time for IEA to become a hub for clean energy technologies and

efficiency. So you basically want to encourage members to get into a sort

of post- carbon economic model? It still seems that there is a clear

and obvious correlation across the world between economic growth and

the use of carbon, and carbon emissions? I think there is some

good news here. But you are completely right. You look at the

last four decades, whenever the global economy grew, so did

emissions. There were three exceptions. The financial crash in

the 1980s, the early 1990s collapse of the Soviet Union and 2009 when

there was a financial crisis. But 2014 and 2015, the last two years,

global economics grew 3% at the global emissions stayed flat for the

first time. We have seen a happy divorce between the economic growth

and emissions. But those are in a sense backward looking figures,

because they reflect previous years. What we have had for the last two

years is a plunging oil price, it is only a $47 a barrel. That means

that, once again, it is cheaper for people to turn to fossil fuels. Oil

and gas are much cheaper. It is economic for people to use them in a

greater way. So the happy divorce you have talked about may have been

short lived. I hope not, because some divorces are happy with good

results. Here, the reason we have seen that divorce is because

energies affect markets very strongly, including wind and solar

power. It is not just a romantic story, they are mainstream fuels.

Efficiency also became very important. They were driven with

high oil prices, and now we are entering an era where fossil fuels

and renewable energy prices are viable. If you take the global

energy mix today, renewables still only represent less than 20% of

overall energy use, which means that 80% is still traditional fossil fuel

based. It seems that a logical conclusion would be that we will see

the trajectory of emissions go up. I hope not. There is a question that

the lower fossil fuel prices can complicate the transition to cleaner

fuels, unless governments do not take the measures. Why would

companies invest in electric car technology is? Why would the next

generation of investors look to that sector when, as far as we can see, a

much lower oil and petrol price is a reality for years to come? I believe

the oil prices may rebound sometime soon. In any case... I think 2017

might be the year where we see the rebound. In any case, in absence

government support, electric cars will never be able to compete with

the cars we have now. What I want to say is, in Paris we had a very

important climate meeting. 90 countries signed the agreement. What

they said is, we want to see change. Since the fossil fuel prices are

lower, there is a litmus test for those governments whether or not

they are seriously committed to what they have said. Whether they support

renewables and other clean energy technologies. Your analysis of where

governments seek, we will get that in a minute. I want to hear what you

think is going to happen to the and gas price over the next five years.

You are suggesting that it will rebound quite significantly? What is

happening is that, in the last two years, oil investments have

declined. 2015, 2016. Investment in exploration? Exploration,

production. The value of oil, when the demand goes up, we might have

difficulties in the markets. In the history of oil, we have not seen two

years in a role John McEnroe, that decline. We might pay a high price

for that. Haven't the rules changed? One of the big new producers on the

block is the United States. As I understand it, it is pretty easy to

switch on and off? It is not easy, they need some time to adjust. They

need about one year or so in order to see the price comeback. The

investment did decline, and the biggest hit came to the United

States, Canada and other high cost producers. Staying with the energy

market for a minute, in a sense, what we've seen in the last year or

so is a battle of wills between big, traditional and cheap producers,

dominated by Saudi Arabia, and on the other side, the United States

who have developed new sources and who are not tied into the same

system. The Saudi Arabians have continued to produce at a high level

because they appear determined to knock the Americans out of the

market. In that battle, who is winning and who will win? When we

look at the results today, it seems that there is a significant decline

in the production outside of the Middle East, for the United States,

Canada, Latin America, soon in the rush. Therefore a real way will

increase. So the strategy of maintaining their market share, even

with lower prices, that is winning? If they are prepared to take the

short-term pain of seeing their margins reduced? Low prices, $50 or

below, many of the high cost producers would suffer, including

the US, Canadian oil and others. But of course, many countries have

different levels of impact from the lower oil prices. There are very big

losers and there are winners. Losers are Saudi Arabia, Brazil. Very big

losers at Nigeria, Brazil, Angola, Roche. There are some countries who

benefit from that, like India, Japan or Europe. The trade improves

substantially from the law oil prices. When only you, I want to

know what your vision is for the oil price going on forward -- when I

meet you. Where will we be in five years time? By law, I cannot make a

focus on prices. What I can say is that I would expect the oil prices,

they were about $35 in January. Five years at this level is not a

realistic expectation. We should expect upward pressure on the

prices. Do you want to put a figure on it? Back to $100 a barrel? Or is

that history? I would never say anything is history, we will see an

upward pressure on the prices. Not just talking about oil. We have

talked about your desire to encourage your members in the agency

to clean up, reduce emissions and reliance on fossil fuels. It is not

just the low oil price that is a problem, coal is unbelievably

cheap. If we look at the consumption of coal, it is going down in Europe,

but it is huge in countries like India, which is a very important

part of the world economy. Isn't that another problem for your vision

of a clean energy future? Very much so. My vision is not just for my

members but for the entire world. For India, China, and other

countries that have a lot of coal. You are completely right. Today,

about 40% of emissions come from coal worldwide. You will not go from

one day to another to lower rates. Some countries like India... If it

doesn't come down, it isn't this vision that you lay down, getting

global temperature change to stay below two degrees and aiming for 1.5

degrees, that is totally and utterly impossible given the wild's current

reliance on coal? You are completely right, that is why we are saying

that one should and could be production of coal powerplants in

some countries. They should be able to be efficient, low emission

powerplants. You cannot say to India or any poor country, where 324

million people have no access to electricity, don't use coal because

you are putting emissions. China, England, USA, they get richer from

not putting emissions into the atmosphere. You cannot say that to

the poorer countries. There is no large-scale, commercially viable

carbon storage available in the developing world. How do you think

India can build a coal power station and be part of this clean energy

future? India need carbon capture and

storage. They don't have it. They can have high-efficiency power

plants. We shouldn't see India only building those power plants. They

have aggressive programmes in terms of solar power and nuclear. We

should implicate India in the bigger picture. A country of 320 million

people who have no access to electricity. Put things in context.

In the rich world, look at Europe, other countries, the share of coal

is declining rapidly. In the United States, a big decline of coal. They

are exporting it, not digging it out of the ground, selling it to

Indians. Internally, it has almost collapsed. It has been replaced by

natural gas. You talk about the onus on the Indian government to deliver

if it is possible. High-efficiency coal powered by a station, some

would argue any coal is bad... There are real questions for the rich

world. In the UK, as we speak, there is a very sensitive discussion in

the North of England about whether to undertake fracking, this process

to deliver the shale gas from under the ground. The government has put a

ban on it. It could be lifted. There are potentially trillions of cubic

metres of gas and the north of the UK. With your influence and

knowledge of the energy market, does it make sense for a country like the

UK to invest in fracking? The United States, as a result of fracking, had

a revolution. The result was substantially lower emissions. Call

has been replaced by shale gas. -- Coal. Australia has done the same

thing. If, in the UK, we can reduce shale gas using sustainable fracking

technologies with strict regulations which can be done... That is highly

dubious. Many people say the evidence if you cannot help but

contaminate water supplies and create environmental problems. You

can do it if the companies invest a bit more than they normally would.

7% more capital investment would mean all this amount can be

addressed, this amount of problems. This would require strict government

regulations. Is on the bottom line that the only way to deliver cleaner

decarbonise energy in the future which you have talked about is to

put a meaningful price on carbon? -- Isn't the. A carbon tax which is

mandatory around the world not just in one country and EU, a global

carbon tax. -- the EU. This would be the best solution for everybody but

some solutions and the nature of life, there is some divergences

that. If you want a global price you have to think about the suffering

from the carbon price. It will take time. To be more direct. I use the

words of Sir David King, the former UK climate change envoy and

specialist, he says, I simply do not see India, China, or South Africa

coming in with a significantly higher carbon price to drive them

away from their reliance on coal. It isn't going to happen. I am not as

prisoners thick as David but I will say it is a very long shot. --

pessimistic. If it is done only in the rich world it would help

competitiveness. Therefore, as some companies do, to put it all over the

carbon price or nothing, it may mean the government regulation, in the

meantime, we cannot quite enough emphasis on regulation and

efficiency improvements. There are real problems with trying to

convince everyone in the world it is a fair playing field. That

competitiveness is being maintained. In the UK, we have a Chancellor of

the Exchequer who has taken money away from investments and

initiatives. He has reduced subsidies for solar and for onshore

wind. There is the suggestion that he believes that some of this green

commitment has gotten in the way of economic growth. That is a problem,

isn't it? I should say, there are many renewable technologies, onshore

wind, compared with five years ago, the cost went down by one third.

Solar, down by 80%. You said the governments need to increase

initiatives. But the fact is they are. Yeah. The support you give

today may be different. We are becoming much more economical. --

they aren't. We have to think about the projects which need a kick off

subsidy. But to subsidise production through a lifetime may require

second thought. Nevermind that sort of nuanced debate in the UK and at

maintaining subsidies, there is a bigger elephant in the room. --

about. Donald Trump. He says he would look very, very seriously at a

minimum agreement made in Paris. Maximum, I might try to do something

completely different. Withdraw the US on that agreement altogether. He

said that. How worried are you abour a Donald Trump presidency for the

future? -- about a. It was a great success, in Paris. Not according to

Donald Trump. The leaders of that success story, the US and China,

supported by European countries. President Obama's leadership was

extremely instrumental for the success stories. I hope that the

government of the US signed an agreement to fulfil its promise,

whoever comes to the White House. I hope somebody comes to the White

House who takes climate change seriously and helps the world to

fight this very important challenge ahead of us. What would the impact

be, how negative, would be if an American president reached the White

House and store up the Paris agreement? Lower fossil fuel prices

will complicate the transition to clean energy. This would further

complicate the transition to clean energy technologies. We have to end

soon. I want to come back to this fundamental point you made, that you

believe the last two years have given us the signal that it is

possible to decouple economic growth from rising carbon emissions. Where

would you say the biggest challenge is today? Is it in the US, China,

India? Where is the biggest challenge? It is more the emerging

countries, such as China, India, and more and more Africa. These are the

areas we need to help. They need prosperity. People need better

lives. But they need a low carbon footprint. Africa, for example, when

you look at the history, as I said, all of the countries became rich by

using fossil fuels. Africa can be the first region in the world which

can realise economical benefits by using green energy mainly. You miss

out on the phase of relying on carbon altogether? Exactly. To

reason. They have huge resources. -- two reasons. The cost of green

energy today is much lower than it was 20 years ago. China started to

grow and before the US started to grow. It can be the first region in

the world that can grow using mainly renewables. They can use gas, for

example. But solar and wind are key options. Can we keep you load the

two degrees target? -- below. I certainly hope so. And we are doing

everything we can. Dr Fatih Birol, thank you very much for being on

Seminole Hard Rock Hotel and Casino. Thank you very much. --

being on HARDtalk. For many places Monday was

a good-looking day, we had a lot of dry weather,

plenty of sunshine and through the afternoon in the sunniest places

it actually turned quite warm. This is quite a typical picture

of what Monday looked