Hi, it's suksha. This week, the International Energy Agency published its flagship report, the World Energy Outlook. It's hundreds of pages long and makes some bold claims. It says that in the year twenty thirty, there will be ten times as many electric cars on the road as today, eighty percent of all new power generation will be solar or wind, and demand for fossil fuels that is, coal, oil, and
gas will have peaked. The report is dominating climate news because what the IA says makes a big difference to how governments tweak their energy policies. But how did an organization formed by a handful of countries in response to the nineteen seventy three oil crisis come to hold so
much influence over our response to the climate crisis? For the answer, this week, we are revisiting one of our favorite episodes, an interview with Fati Birol, the head of the IA, As we approach COP twenty eight by an oil power and led by the CEO of an oil company, it's good to understand how international organizations can be successfully transformed in the face of climate change. This story of the IA's transformation is just one of many I explore
in detail in my book Climate Capitalism. I spoke with Fathi in Paris in March about the IA's changing priorities and how it has cemented its role in the energy transition. I hope you enjoy the conversation and we'll be back with a regular episode next week. Welcome to Zero. I'm Akshatarati.
This week Dirty Data, directorial debuts and depolarized Debate. When you think about Paris, you think about the smell of butter rafting from pathesries, accordions laying outside the loof, and if you time it right, the occasional mass protest against pension reform. When I think about Paris, I think about
the brutalless concrete building next to the Eiffel Tower. It's home to the International Energy Agency, a small but very influential intergovernmental organization that shapes all our futures, even if we don't know it. Better known as the IA, it was founded in nineteen seventy four in response to the oil crisis, and, according to its executive director, doctor Fati Birol, it started out as a rich man's energy club, working to make sure OECD member countries had enough oil at
all times for decades. That was its mandate. The IA's work was key to creating strategic petroleum reserves, essentially huge tanks of crude stored away to be used in emergencies, but under FATI the organization has changed. It now offers different kinds of memberships, which has allowed it to bring on board giant energy consumers like India and China, even
though they are not part of the OECD. The IA also looks out for the poor by working to ensure that they have access to energy, and after years of criticism for underestimating the growth potential of renewables, it has now become an authority on clean energy. In twenty twenty one, the IA made headlines around the world by releasing a report that said, if we want to achieve net zero by twenty fifty, there should be no new investment in
fossil fuel infrastructure period. It's a big call for an organization founded to secure oil and a much needed correction welcomed by the climate community. The IA does not decide any country's energy policy. Its role is to analyze the state of the world and advise governments to act on crises. Look at what happened last year Russia invaded Ukraine and Within days, the I published a ten point plan for
Europe on how it convened itself off Russian gas. The IE had no power to implement the plan, but its recommendations became europe wide policy anyway, spurring huge investments in clean energy across the continent.
And I believe when we'll look back ten years from now, we will see that it was a major milestone in the history of energy, mainly driven by energy security and climate change concerns.
FATI is able to say these things because of the IA's number crunching prowess. They receive energy data from its members and work intimately with governments, academics and companies to make predictions about current and future energy needs. I sat down with Fatig in Paris to ask when global emissions will peak, if it's possible to get there sooner, and how the International Energy Agency rebuilt itself to become fit for the climate year to be all.
Welcome to the show, Thank you very much.
Now we're here in Paris and we just had lunch, and you were telling me about your career before getting into the energy industry, and you started in films.
Yes after I studied electrical engineering in Istanbul I taught at that time, and the engineering was dry occupation and I wanted to be more involved in the social issues and I made movies.
First.
I started with the eight millimeters movies. I got prices for that, and then I moved to thirty five millimeters, the normal movies. I was an assistant director for a few movies, and then I moved from Istanbul to Vienna and my main objective was to study film Academy. But as it happens, I found myself in the Technical University of Vienna studying energy economics. I am now watching movies, but not that them.
So the world of energy just threw you in and you've never left since.
No, because I found what I was looking for.
Because energy is very much related to life of human beings, there's a very strong social aspect there and since many many years, I am working on energy and I'm very happy with that.
Now, the IEA does important work, and we'll talk about a lot of that, But for the average person in the street, it's unlikely that they know about the organization. Yeah, what is it that the IEA does that makes their life better even if they don't know it?
So we try to first of all, make the energy security. Everybody should have access to energy, both in developed and developing worlds, but our main attention is the developing world. Second, we want to make sure that energy is affordable for the people, that they can have enough money to buy the energy they are fuel and the dirt. We want to make sure that the air they breed is clean because some of the energy sources are the main drivers of air pollution or in other verse, the climate change.
The IEA's roots, going back all the way into the seventies, lie in the world of energy security tied mostly to fossil fuels at that time. Even today majority of the energy is tied to fossil fuels. But the world is changing. And in twenty fourteen, when Russia invaded Crimea and there was panic over gas, you were pitching yourself to lead this organization. What was the pitch that you made.
We were founded in nineteen seventy four. In fact, next year is our fifty birthday. I thought IEA is a wonderful organization. But there are two things missing. One of them is IEEV was known an authoititative energy organization, but organization of the rich men rich mass Energy Club. This is one art to be changed. And the second is I had pivotal role when it comes to the conventional
energy technologies. But I thought, given the critical importance of climate change and the role of energy in causing climate change, there is a neat IDEA to accelerate his efforts under clean energy and the fight against climate change. So when I apply to be the head of the IEA, I said, there are two things I want to do if I was elected, and one of them was to open the doors of the IYEA to emerging world mainly Asia, but
not only Africa, Latin America and others. And the second is to make the IDEA a hub for clean energy technologies. So I am very happy that the member governments of the IEA unanimously agreed and selected me as the head of the IYEA in twenty fifteen.
Now you're coming up to the end of your second term as the head of the IEA. In that period, the agency has gone from being criticized for being too slow to project the growth of renewables being championed by climate activists for being the agency that says no new fossil fuel infrastructure should be built if we are to meet climate goals.
So we are always criticized.
Actually we were criticized being too slow, and we are now criticizers being too fast. But I think the people need the energy. We need fast and decisive leaders.
So what do you think gives ie the credibility to have the kind of influence that it does on the world of energy.
So we have expanded the number of experts working here substantially. For example, when I took over the IEA, we were about two hundred and ten people here and currently we are about two hundred and fifty people more or less with the same core budget. To be honest with you, but the big portion of the growth came from the clean energy, but cleenergy technologies, renewable energy efficiency. These are the areas that we grew and we have gained a
very strong momentum in these areas. I was working with one of the leaders of the energy industry the other day and he was complaining with it. They are not able to recruit young people, even though they give a very good salaries, much better than the IDEA, because many young people when they finish their university, they really looking
for a purpose, not only for money. And at the IDEA we are overwhelmed with the interest from the young people, and I am very happy that my Colaxia find the purpose and they know that the work they are doing has a real word impact.
Well, at least we are working towards that.
Now, we've seen a full scale invasion of Ukraine by Russia and we've seen what impact that's had on Europe as it tried to move away from Russian fossil fuels at a very rapid base. That's led to decreasing the amount of gas that's being burned and ramping up of renewables. How do you think Europe can make the most of the current moment to pursue its long term goals which are tied to a clean energy agenda.
So we are twenty fourth of February last year Russia invadio Ukraine and one of the things I am proud of the idea is we are very nimble. Twenty fourth of February was the invasion. First of March, one week later, we came out with a ten point plan what Europe should do in order to reduce the reliance on Russia, but at the same time making sure that the measures we are taking are not against our climate goals.
And some of the measures.
When I discussed if the government leaders, they were found very radical. For example, we set in Europe we have to bring the room temperature two degrees low. We have to see a major increase of renewables as a result of cutting the permitting and licensing time of these renewable installations. Or we set two countries Belgium and Germany please consider not to shut down your nuclear power plants extend for
some time. Those are all now implemented. What I see when I look at Europe today one year later, I think we have all the reasons to congregeate European decision makers. I give a couple of numbers, as you know, actually I am a man of numbers, so I make my hands dirty with data every day. So first, Russia's oil and gas revenues declined by forty percent.
This is very important.
The country that invaded and aggressed another country, their revenues went down. Second, the share of gas in Europe before the invasion was about forty percent coming from Russia, and now the Russian gas in Europe is less than five percent. Renewables installation Europe increased by forty percent, Heat pumps increased by forty percent, and on top of that the cherry and the cake. In my view, while fighting against this aggression, European emissions declined by two point five percent. So you
were able to in Europe keep the lads on. You were able to push the clean energy and at the same time reduce the emissions. I think this success story. But the game is not finished. This is the first half of the match. The second half will be what will happen the coming winter and the winters in front of us.
There is still a narrative, especially in the energy industry, that says much of the crisis that Europe faced was because of a lack of investment in fossil fuels. But you say that that is a mistaken idea, and you're.
Yes, you are completely right. Actually, I believe the lasting solutions to energy of security goes through increase in the share of clean and edge. In fact, one of the reasons why we have seen such a big increase in renewables in Europe. It is not driven by climate concerns meanly,
it is mainly driven by any ergy of security concerns. Today, energy security is the most important driver of renewables around the world, and I believe this will continue when we look at fossil fuels first, and there's a lot of the discutch in many countries. Shall we build a or develop a new oil field, this will help us for the Russian energy crisis. I think there are at least
three mistakes there. One, if you start the oil field today, the first oil will come to you an average six seven years later.
This is number one.
Number two, the electric cars are growing very very strongly, very strongly, so I am not sure that in six seven years of time the world will need edition oil production growth. So this is the second mistake. The third one is the of course, climate change. So I discussed
this issue all the time. I tell the companies who push this idea, as you rightly mentioned the fossil fuel investments, I said, I have no problem if an oil company says I AM going to increase my production by three million barteries per day, five millions price or this person.
This is their view.
They can do whatever they But my problem is if a company says I AM going to increase my production by three million buds per day five million bus per day, and my company's strategy is in land with the party scores. This is not true. This cannot even both of them cannot oppen at the same time. I am sorry, but they have to choose one of them, and I will try to push those countries to choose one of them. I hope they choose the good one.
Now, the world of energy and climate have been for some time polarized. There has been a real need to try and bridge the gap. The IA has performed an important role to help make that happen. However, still you get these examples which don't seem logical. Just to give you one, Joe Biden, President of the US, is keen on making sure that the US meets its climate goals, worked on a big bill that was passed last year,
the Inflation Reduction Act. At the same time, they have just approved a new eight billion dollar oil project in Alaska that goes against the advice that is given that no new oil and gas infrastructure is needed. Why is it that you continue to see these seemingly illogical steps taken by people who understand the science, who understand the importance.
So actually, if one of the ambitions that I have as head of the IDEA is to make the energy world and the climate world talk to each other and find common ground. It is the reason I believe there is a need to build a equal grant coalition, government's industry, investors in jures who are sincerely I underland this sincerely intend to address our climate challenge. I give you one example.
A few months ago I was in that was in the morning I had meeting with a greater turn back and in the afternoon I had a meeting with the CEO of a mining company, and in the evening I had a meeting with the prime minister of a European country. So we need to bring them together. We cannot be too selective here and only only if we can build this grant coalition we can reach our climate course. So this is our job, and the wind comes the Information
Induction Act. In my view, it is the single most important climate action since partis twenty fifteen Agreement, and I hope it will be implemented in the right way.
So in that context, how do you make sense of the Biden administration approving an eight billion dollar project that extracts oil for thirty years in Alaska.
So it is up to the uscal one to decide how they're going to secure their energy supplies. But I would tell you that if I have to look at the US energy and climate policy, if I have to single out wanting, it is the Inflation Reduction Act, which is in my view, the single most important action since Partis Agreement in twenty fifteen. As far as the climate change is concerned, if countries take decisions which we believe not consistent with each other, we try to pinpoint them.
After the break, three numbers you should remember and what we can do to make emission speak sooner. In one of our previous conversations, you had said that the IA's strength comes from taking the right position and then having the backbone supported by the numbers to hold that position. If we had to talk about three numbers that matter for the moment we are in, what would they be?
Tree is in fact too little. But the first number I would say is eight hundred million. Today about eight hundred million people have no access to electrics. This is my biggest peroccupation, especially in subsan Africa. Every second person
have no access to electrics. This is number one. Number two one point four one point four is today the clean energy investments in the entire word is one point four trillion dollar with avery one trillion fossil fuse, and in order to have an orderly planet, this one point four needs to go to four trillion twenty thirty, and most of them needs to come from the developing countries. This is the challenge. And the third one is the
fifty percent. What is this fifty percent? Even most conservative estimates, in twenty thirty, every second car, fifty percent of all the cars sold in China, Europe and the United States will be an electric car. So this will change the game significantly. So there are three numbers. Eight hundred million, one point four trillion, and fifty percent.
Now, if you stick to the trillion dollar figure, there as you say, countries will need four trillion dollars of annual investments in clean energy to be able to meet energy access and climate goals. What is the way in which that amount of money could come through developing countries and finance? What is an absolutely necessary transition?
You asked me choose three numbers. If you ask me to choose one term, which is for me very important, I would say the fault line today, the fault line of our fight against climate change is how they will financetic clean edergy investment developing countries First of all, the climate change problem we have today is not only the result of the emissions of today, but it's the concentration of the carbon atmosphere since one hundred years and eighty
percent of these emissions came from the advanced economies. Today they were responsible to clean up. So this is number one. Number two, I think there is a huge potential of clean energy in the developing countries, much more than the advanced economies. But the money, the capital and these projects
don't meet each other because of the risks involved. So therefore there is a role for the intentional financial institutions and they, in my view, they failed, and I hope that they will resume the role of organizations which look after the sustainability of the global economy and put the clean energy transition top of the agenda. And I see
these two things. The responsible for the advanced rich countries and the growing role of the MDBs is key in order to address fault line issue, namely exciting clean energy investment developing countries.
One other way in which we can accelerate the clean energy transition and developing countries is through transferring lessons learned by one country to another. One of the chapters in my book is about how India developed its solar industry and how you have worked with the Indian government to figure out the lessons from the growth of solar and
help other countries to deploy some of those examples. Can you give me more examples of where what the IEA does beyond publishing reports about where the world is going on a more granular level to transfer lessons from one country to another.
In energy policy, if there are policies, measures, standards and norms works in one country, it would with some calibration, it will work in another country. We say in Turkish you don't need to hit your head on the world to understand and it is hard. So this day is the experience in front of you. So we are sharing experience of country A with country B and giving them advice. One example efficiency. So what we are doing and is just for an example around the world telling the collics.
How are you going to draft the efficiency standards for refrigerators? This is very important and this is the key issue we work with Indian government and how you put the efficiency standards for the air conditions? A top reason for the actorsy demand growth. So we are providing these experiences, sharing the experiences not only from the advanced economies to developing countries, but within the developing countries. For example, India
is an excellent example of led lighting. We have provided this experience to Indonesia, and Indonesia is using some of the elements of the ad lighting success story at home. So this is our job to share the experience and good ones and also a bad one to learn from each other.
You've called what happened last year the first global energy crisis, which would feel a little bit odd given we've had energy crisis in the past. Why is this the first global energy crisis and what will trigger the next one?
You're completed at We hit crisis in the past seventies and eighties, but they were only focused on oil, and now we have oil, natural gas, even in the coal markets.
The reason is very simple.
Russia was the number one energy exporter of the world, number one oil exporter, number one nature gas exporter, big play in the coal markets, uranium, electors and everything, and we have seen the effects of this not only in Europe but across the world. Is a result of price effects. Now, what could be another crisis? There are many candidates for that, unfortunately. But what I see a risk today is we just discussed the clean energy is growing. They don't need phossil fuse.
They need other things such as critical minners, such as the manufacturing of the clean ergy technologies. And when I look at the picture today, there is also a concentration here like we heat for oil, like we haate in natural gas. For example, more than eighty percent of the PV is in China. And forget the eighty percent, when you look at to all the modules of the PV manufacturing, from eight to ninety percent it is in China, and it is maybe even one single province and two major
industry facilities. If there's a fire there, the entire supply chain will be disrupted. So it is not against China or anything, but relies on one single country, one single company, one single trade route is always risky.
In my view.
The magic world here is a diversification. We have to diversify this and to have a clean and secure energy future, relies in many countries around what follows the footsteps of China and make sure that they have enough access to critical miners and the manufacturing of the clean energy technologies.
Another outcome of the energy crisis has been record profits for fossil fuel companies. Saudi Aramco posted a record profit of one hundred and sixty billion dollars. Just to put that in context, Apple had a profit of about twenty five billion dollars. At the same time, the world needs to invest a lot more money in clean energy. How do you find a way to move vast profits in fossil fuels toward encouraging those companies which have to be a part of the transition to invest in clean energy?
Akshat.
You look every year how much profits the oil and gas companies make on average. Until last year they were making about one point four one point five trillion dollar and last year their profits in care is to four trillion dollars, more than double. So I very much hope these companies would use this a huge amount of I call that windfall profit in order to accelit their clean energy efforts. It can be hydrogen, it can be carbon
capture storage, it can be offshore, with many options. But what I see what is happening is not necessarily in line with my hopes and expectations. Some of them goes back to the shareholders, others go to the phossil fuel investments.
I very much hope.
That they would do what they say, because all of these companies are saying that the clean energy is very important for that and they have the abilities, engineering skills, the management of running huge projects, and a lot of experience in order to exit the clean energy technology deployment. If you ask me whether or not I see acceleration that, my answer would be not necessarily.
You're a rare person running an intergovernmental organization. You have a PhD in economics, You have not run an election public election. You are a technocrat. Most intergovernmental organizations are run by politicians. What are the advantages of being a technocrat running an intergovernmental organization?
So I never run for office. I did once.
It was when I was nine years old, to be the represent of the class of the students, and I lost it to somebody.
Else and then you said never again.
So no, I was second. So I was the vice the representat of the class.
Politics is at the heart of the energy, but I didn't want to be part of a political party. And you are right before me. There were distinguished ia ages of directors. My predecessor, for example, was the former Minister of Economy of Netherlands, I came within the ranks. The advantage is you have a command of the issues, the energy issues. You know the numbers, and I always say data always wins.
When you were elected to be the head of the IA, the first speeches you gave were in Beijing and New Delhi. Beijing. If we look at it, yes, it's emissions are still rising and they do have to peak sooner. But they have taken green technologies and run with it. All the major technologies that we know, solar panels, winterbines, batteries, electric cars, now hydrogen. All China is leading the world on the
same can't be said about India. When do you think India will be able to grab onto its potential for clean energy, both for development but also for climate targets.
I think you made your homework very well. I should congreguate you for that. In order to underscore the vision I put forward name opening the Doors of the Emerging World. The first week after I became the head of the IEA, I gave my first speech in Beijing, followed by a new daily. The reason is that to show the world and these two important players in the global energy scene that we want to work with them. We want to make sure that the energy is secure but at the
same time clean. China is the undisputable leader of clean energy around the world today. But I am much more optimistic about India than many others. People are too much focused on the cold story in India. This is a real story, definitely, but look at what is happening with
the solar It is a huge, huge success story. And if I had time, and if I was a journalist or a researcher, I would make a book or an essay and the India Solar Revolution and there it will be a inspiration for many countries, including those in Africa.
Very soon.
With India, I am expecting and it is also based on my meeting with Prime Minister Moody. India will make a lot of in laws in the clean energy technology manufacturing as well, because India doesn't want to build the solar panels which they input from other countries and want to be independent die which is excellent and it helps to the point I try to make the diversification of
the sources. I'm very hopeful about India because India, when you look at the Indian energy history in the last few years, there are many impressive achievements which are not very much hurt around the world, providing access to electricity almost five hundred million people in a very short period of time population of Europe. There is a program that is not very much known in the most of the
world called Uzhuala program in Indian. Many countries, women and children die prematurely because of the desperate diseases because of the practices using wood, agricultural waste, animal waste, and in Asia it is one of the top three reasons for premature death. So Ushuala program gave cleanly nurgy solutions to the women and children. This is the second one. I expect that India will be a major driver of clean energy, similar with China.
Europe did cut its emissions by two point five twenty twenty two, but the world still hit a new peak of emissions. According to your own data, when do you see global emissions speaking and how can we get there faster?
So you're right, our data shows that the last year global emissions did increase. But if we remember the discussions beginning of the energy crisis, there was a major concern that we will see run away emissions, big growth. Why the growth was so subdued. If I may say so, it is because of the unprecedented growth of clean energy. If this growth didn't happen, the emission increases will be
three times higher. And I believe when we look back ten years from now to twenty twenty two, we will see that it was a major milestone in the history of energy where we see a turbo charging of clean energy transitions mainly driven by energy security and climate change concerns. When do we peak? If we are committed to one point five degree target, which I is, we here to see the emissions peak around twenty twenty five. And when I look at all the countries around the world, the
most important uncertainty here is China. Chinese is the single largest emitter of the world. China is saying the official statement they want their emissions to peak before twenty thirty. But when I look at the Chinese numbers, my expectation is Chinese peak will be before two anti thirty and it will help the global emissions speak. But this wouldn't be enough in my view to be in line with the one point five degree target, but will bring us closer to that.
Thank you so much for this conversation.
Thank you very much. Thank you.
I've talked to Fathi several times over the past few years, and when I asked him what he wants his legacy to be, he said he wanted the IA to address the two biggest challenges of this century, climate change and access to energy for all. Both are issues that will take decades to solve, but the changes that the IA has made shows how international organizations can reorient themselves for the climate era. The research for this episode is based on work I did for my book Climate Capitalism that
will be published later this year. I hope you'll give it a read when it's out. Thanks for listening to Zero. If you liked this episode, please take a moment to rate and review the show on Apple Podcasts or Spotify, send it to a friend, or share it with your favorite patisier. If you've got a suggestion for guests, or topics or something you just want us to look into, get in touch at Zero pod at Bloomberg dot Net. Zero's producer is Oscar Boyd and senior producer is Christine Risco.
Our theme music is composed by Wonderly Special thanks to Kira Bindram, Eric Rosston and Will Mathis. I'm Akshatrati back next week.
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