How the ‘rich man’s energy club’ became a climate champion

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 IYA, 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 is 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 structure period. It's a big call for an organization found it 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 IA published a ten point plan for Europe and how it

convened itself off Russian gas. The I 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 look back ten years from now, we will see it. It was a major milestone in the history of energy, mainly driven by energy security and climate change concerns. Part he is able to say these

things because of the IA's number runching 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 Fati 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. Not 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 thought 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 a assistant director for a few movies and then I moved from Istanbul to Vienna and my main objective was to study film Film Academy. But as it happens, I found myself in the Technic University of Vienna studying energy economics. I am now watching movies, but not directing them, And so the world of energy just threw you in and you've never left sense No, because I found what I was

looking for. Because energy is very much related to life of human beings, there is 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 IA does important work and we'll talk about a lot that, But for the average person in the street, it's unlikely that they know about the organization. What is it that the IA does that make their life better even if they don't know it? So try to first of all,

make the energy security. Everybody should have access to energy, both in developed and developing world, but our main attention is a 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 day are fuel. And the third we want to make sure that the air day bridge is clean because some of the energy sources are the main drivers of air pollution or diverse

climate change. The is roots going back all the way into the seventies, lie in the world of energy security tied mostly to fossil fuels at the 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 fiftieth birthday. I thought, i EA is a wonderful organization, but there are two things missing. One of them is IEA was known an auto additive energy organization, but organization of the rich men rich mass Energy Club. This is one I thought to be changed. And the second is I had a 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 need IDEA to accelate his efforts under energy and the fight against climate change. So when I apply to be the head of the IDEA, 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 IDEA to emerging world, mainly Asia, but not only African,

Latin America and others. And the second is to make the IA a hub for clean energy technologies. So I am very happy that the member governments of the IA unanimous to agreed and select it as the head of the twenty fifteen. Now you're coming up to the end of your second term as the head of the IA.

In that period, the agency has gone from being criticized for being too slow to project the growth of renewables to 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 criticis actually criticis as being too slow, and we are now criticis as being too fast. But I think the people need the energy word, need first and decisive leaders.

So what do you think gives IA 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 a would Idea, we were about two hundred ten people here and currently we are about three 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, renewables, energy efficiency. These are the areas that we grew and we have

gained a very strong momentum in these areas. I was walking with one of the leaders of the energy industry the other day and he was complaining me that they are not able to recruit young people, even though they give very good salaries, much better than the IDEA, because many young people when they finish their university, they're 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'm very happy that my colleagues he find the purpose and they know that they work they are doing has a real world 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 fields at a very rapid pace.

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 completely right to anty fourth of February. Last year Russia invaded to Ukraine and one of the things I am proud of the idea is we are very nimble tout fourth Fabruary was the invasion.

First of March. One week later, we came up 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 discuss if the government leaders, they were fund

very radical. For example, we said in Europe we have to bring the room temperature to degrees LoVa, we have to see a major increase of renewables as a result of cutting the permitting an lissing time of these renewable installations. Or we set two countries Belgium and Germany, please consider not to shut down your nuclear power class 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 covergate. European decision makers. I give a couple of numbers is 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 aggress 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. Renewless installation Europe increased by forty percent, heat pumps increased by forty percent. And on top of that the cherry on 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 reduced the emissions. Act in 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 fields. But you say that that is a mistaken idea. Yes, you are completely right. Actually, I believe the lasting solutions to energy security goes through increasing the share of clean energy.

In fact, one of the reasons why we have seen such a big increase in renewabus in Europe, it is not driven by climate concerns meanly, it is many driven by energy security concerns. Today, energy security is the most important drive of renewbus around the world, and I believe this will continue. When we look at Phostolphus first, and there's a lot of discussion in many countries, shall we build or develop a new oil field? This will help

us for the Russian energy crisis. I think there are at least three mistakes that One, if you start the oil field today, the first oil will come to you verage 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 aditional oil production engrolved. So this is the second mistake. The third one is of course, climate change. So I discuss this issue all

the time. I tell the companies who push this idea. Is you rightly mentioned the phosphical investments? I said, I have no problem if and all your company says I am going to increase my production by three million dollars per day, five millions pers or disperse, and this is their view. They can do whatever they want. But my problem is if a company says I AM going to increase my production by three million dollars per day five million bars per day, and my company's strategies in line

with the parish, cause this is not true. This cannot happen. Both of them cannot happen at the same time. I am sorry, but they have to choose one of them. 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 dollars oil project in Alaska that goes against the advice that the year 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, one of the ambitions that I have is head of the IEA, is to make the energy world and the climate word talk to each other and find common ground. It is the reason I believe there is a need to build a I could grant coalition, government's industry investors in jeers 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 doors. In the morning, I had a meeting with a greater turnback, 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 an European country. So we need to bring them together. We cannot be too selective here and only and only if we can build this grand coalition, we can reach our climate cause.

So this is our job, and the wind comes the Inflation Induction Act. In my view, it is the single most important climate actions Parties two 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 US. I'll want 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 one thing, it is the Inflation Reduction Act, which is in my view, the single most important action since Parties agreement on two 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 i'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? Three 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 electricy.

This is my biggest three occupation, especially in subs in Africa. Every second person have no excess to electric This is number one. Number two one point four one point four is today the clean energy investments in the entire vert is one point four trillion dollars VISA one trillion for sulfuse. 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 ask me choose three numbers.

If you're 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 finance the clean energy 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 concantation of the carbon atmosphere since hundred years and eighty percent of these emissions came from the advanced economies today day were responsible to clean up to the 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 Internship Financial Institution 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 edgy transition top of the agenda. And I see these two thinks the responsible to advanced rich countries and the growing role of the MDBIS is key in order to address this faultline 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 employ some of those examples. Can you give me more examples of where what the AA 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 would work in another country. We say in Turkish you don't need to hit your head on the world to understand it is hard. So there's an 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 is just one example around the world telling the collects. How are you going to draft the efficiency standards for refrigerators? This is very important. This is a key issue. We work with Indian government and how you put the efficiency standards for the air conditions a top reason for the ac 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 experiences, good ones and also bad ones, to learn from each other. You've called what happened last year the first global energy crisis, which would feel a little bit or given they've had energy

crisis in the past. Why is this the first global energy crisis and what will trigger the next one? You're computed, right, We hate crisis in the past seventies and eighties, but they were only focused on oil, and now we have oil, natural gas even in the cold markets. The reason is very simple. The Russia was the number one energy exporter of the world, number one oil porter, number one natural gas exporter, big pillay in the coal markets, uranium, electrics

and everything. And we have seen the effects of this, not only in Europe but across the work is a result of price effects. Now what could be another crisis? There are many candidates for the unfortunately, but what I see at risk today is we just discuss the clean energy is growing. They don't need phosilphius, but they need other things such as critical manners such as the manufacturing

of the clean edge technologies. And when I look at the picture today, there is also a concentration here like we had for oil, like we had in natural gas. For example, more than eighty percent of the PV is in China, and forget the eighty percent when you look at 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 the world, follows the footsteps of China and make sure that they have enough access to critical minners and the manufacturing of the clean ergy technologies.

You mentioned that next winter could still be difficult for Europe. How bad could it get? What should it do to prepare? Do you have a new ten point plan? Yes, we have a plan again, And let me first tell you why it could be still better, maybe even worse than at this winter. There at least three reasons. Actually, the first one is in Europe governments to right decisions. But Europe was also a bit lucky, if I may say so. Two things. One is we had read a mild temperature

this winter thanks to climate change. Thanks thanks to climate change or whatever. And the second one is that the China the top allergy importer of the world. Chinese domestic gas consumption declined last year for the first time since forty years, so China didn't import a lot of allen. There was a lot of lange in the markets and Europe could go and get back. Now look at the next winter. First, Chinese coming back. Chinese economy is rebounding and they can come to the markets and buy allergy

with the strong financial muscles. Second, the amount of new lang edition allergy capacity coming to the market this year is one of the lowest in the history. And the third is we may not have this year rushing gas at well. We still get in Europe about fifty bcm of rushing US and can be cut in a moment if I can put treatings together. Plus the temperature will be not so kind to us the next winter, we may have a big difficulties and it is the reason

we came up with a couple of suggestions. In fact, I have announced this in a press conference with him is also on the day and the President of the European Commission, and what we have said is permitting and licensing of the clean energy Universeers should be accelerated, Heat pumps should be incentivized and working with the United States as Arbaiji and Norway get additional gas and we had

to further save gas at all. The efficiency here these are need to be implemented and implemented in a strong manner. It is the only way that we can save a radar challenging winter next year. Another outcome of the energy cry 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 and fossil fuels to word encouraging those companies which have to be a part of the transition to invest in clean energy. Actually, we look every year how much profits the oil and gas company's image an average, until last year they were making about one point four one point five dollars, and last year their

profits increased to four tillion dollars more than double. So I very much hope these companies would use this a huge amount of I call that windful profit in order to acceleate the 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 Phosophuel 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. But if you ask me whether or not I see acceleration that, my answer would be not necessarily. You're a rare person

running an inter governmental organization. You have a PhD in economics, You have not run an election public election. You are a technocrat. Most inter governmental organizations are run by politicians. What are the advantages of being a technocrat running an inter governmental 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 representative 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 agent 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, winter by in the 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 congrege for that. In order to underscore the vision I put forward named opening the Doors of the Emerging World. The first week after I became the head of the I gave my first speech in Beijing,

followed by a new Delhi. 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 their 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 call 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 on 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 modey. India will make a lot of in rows in the clean energy technology manufacturing as well, because India doesn't want to build the solar panels which they import 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. Are in 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 USUALA program. In Indian and many countries, women and children die prematurely because of the desperated diseases because of the cooking practices using wood, agricultural based animal waste, and in Asia it is one of the top three reasons for premature debt. So USUALA program gave cleaner and justolutions to the women and children. This is a 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 are 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 runaway emissions big cloth. Why

the growth was so subdued. If I may say so, it is because of the unprecedented growth of clean energy. If this quoth didn't happen, the emission increases will be three times higher. And I believe them. We'll 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 turbocharging 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 IE is, we have 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 the emissions to peak before twenty to thirty. But when I look at the Chinese numbers, my expectations Chinese peak will be before twenty to thirty and it

will help the global emissions peak. But this wouldn't be enough in my view to be in line with the one point five degree target. But we'll bring us closer to that. Thank you so much for this conversation. Thank you very much, Thank you. I've talked to Fati 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. An Apple podcast or Spotify, Send it to a friend,

or share it with your favorite pathisia. 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 driscoll Our. Theme music is composed by Wonderlely Special thanks to Kira Benjim Eric Roston and Will Matthis i'm axhatrati back next week Whenue pribly shit? How long would it be between? So people have patience

to listen? Really, I wouldn't listen myself, so which is amazing. So this is a thirty forty minutes Yeah,