Paris climate agreement at risk of failure, says energy chief

International Energy Agency head Dr Fatih Birol fears some countries are merely paying lip service to climate change goal

Fatih Birol, executive director of the International Energy Agency
Fatih Birol, executive director of the International Energy Agency, fears some pledges to cut emissions will prove to be only lip service Credit: Magali Delporte

When nearly 200 countries put aside their differences to sign the Paris Climate agreement, it was hailed as a “major leap for mankind.”

Nearly six years later, however, and Dr Fatih Birol, the head of the international Energy Agency (IEA) is concerned the treaty will fail to deliver.

The deal to keep global temperatures “well below” a 2 degree Celsius rise above the pre-industrial era, and “endeavour to limit” them even more to 1.5 degrees Celsius, has not yet been backed up by enough action, says the economist.

“What worries me is the growing gap between the rhetoric and what is happening in real life,” he says, speaking from his Paris office, not far from where the agreement was signed.

“Some countries have not yet designed concrete policies to meet their commitments; some have not yet found the financing.

“And thirdly, I am sorry to say, some of those commitments can be seen by people as lip service - and I wouldn’t say that those observations are not legitimate.”

A race against time

Last week, Dr Birol published a report that claimed the global rebound from the Covid-19 pandemic is set to drive emissions of greenhouse gases that stoke climate change to all-time highs.

The urgency to address this was brought home this month by deadly floods in Europe, fires in the US and sweltering temperatures in Siberia.

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Cleaner technology is still being developed, upfront social and financial costs of change can be high, and countries remain at odds over how to share those costs and help developing nations cut emissions.

It’s a division that the economist is determined to help fix. “Climate change is a race to zero. But the race is not between countries, the race is against time,” says the 63-year-old. “And unless everybody finishes the race, nobody wins the race.”

Dr Birol is better placed than most to see both the dangers and the solutions. 

Set up mostly by Western nations to manage oil stocks during the early 1970s Arab oil embargo, the IEA is used by the energy industry, governments and investors for energy market modelling, data and advice. Its annual World Energy Outlook is considered an industry bible.

Its modelling is all the more important as countries grapple with overhauling their energy systems to cut emissions, working out whether and how fast to replace oil, gas and coal with new technologies such as electric cars, clean power, hydrogen and carbon capture.

Its 30 members, who have to be in the OECD, include the UK and the US, while associate members include China and India.

How to reach net zero by 2050

Born in Ankara in 1958 and university educated in Istanbul and Vienna, Dr Birol joined the Opec oil cartel as an energy modeller in Vienna in 1989. He began his career at the IEA as chief economist in 2008 before climbing the ranks to executive director in 2015.

His early days at Opec haven’t helped the IEA fend off suggestions that it has been slow to embrace the possibilities of renewables and promote the depth of carbon-cutting needed.

Avaaz, the climate action group, took out a full-page ad in the Financial Times in March claiming the IEA “scores goals for the fossil fuel industry.”

That industry certainly wasn’t cheering, however, when the IEA published a report this year modelling for the first time how the world can cut emissions to net zero by 2050.

It said the world did not need to invest in new fossil fuel projects if it hoped to reach its climate goals.

The report has given ammunition to critics of the UK’s policy not to ban new fields in the North Sea as it prepares to host the Cop26 international climate change conference in November.

“Countries around the world now are using our report to develop their roadmaps to net zero,” says Dr Birol. “If the demand reduces to the level to be in line with zero emissions, investing in existing fields today will be enough. I hope that countries take into consideration our findings.”

He says the UK’s team organising Cop26, led by Alok Sharma, are doing a “marvellous job”. He believes a successful Cop26 would include a push on the financial help for developing nations to cut their emissions, helping to sever the link between emissions and economic growth.

He says the conference also “needs to provide an unmistakable signal to investors that if you continue to invest in dirty technologies, you may really lose money. But there is a lucrative option if you invest money in emerging clean energy technologies.”

Critics in the UK say the Government must be more upfront about the UK’s own costs of hitting net zero emissions and how this will be shared between taxpayers, bill payers and consumers. The Office for Budget Responsibility puts it at £469bn over the next 30 years, increasing debt by 21 percentage points. It stresses that costs of reaching net zero “pale in comparison” with the consequences of unmitigated climate change.

Peak oil

Energy expert Dieter Helm warned last week that there “are high costs”.

“We need to understand - this transition to clean energy will be very, very challenging,” says Dr Birol. “It will not be, as some people claim, smooth and easy. It will not be a rose garden. But we have to do it. We don’t have any other choice. I am all for it that governments are transparent with their citizens about the implications.”

Oil-producing countries cannot afford to be complacent, he warns, even as oil prices recover to well above $70 per barrel. “No country will be unaffected by the clean energy transition. Governments that think that way are making a fatal mistake. In a world driven by climate-friendly policies, the amount of oil required will go down, the price of oil will go down, and in most of those countries, the young population will go up.”

Fossil-fuel producing nations’ power to disrupt global energy supplies is set to wane. In the push for cleaner energy, far more of it is expected to come from clean electricity, instead of from burning oil and gas. That means more need for materials that make batteries, as well as the technology to balance electricity grids.

The IEA requires members to hold 90 days worth of oil stocks and be able to cut oil consumption by 10pc in the event of any supply crisis. Could the IEA one day require national stocks of raw materials in the same way?

“New energy security challenges are emerging,” says Dr Birol. “One of them is electricity security, including cyber-security and the share of renewables. The second is the demand for critical minerals such as cobalt. We are keen to monitor this very closely.”

“I am hoping that our member governments will mandate the IEA to monitor both of these areas as well, in addition to our existing mandates on oil and gas security.”

China’s grip on lithium and cobalt supplies is one source of concern. The emerging superpower is also under fire for its carbon emissions, which make up almost 30pc of the global total. Dr Birol is not as critical as some, noting that China is also well ahead in solar, nuclear and other lower carbon technologies. “I hope that China will reach its targets [net zero by 2060] ahead of time.”

As for the world’s chances of reaching 1.5 degrees, he is pragmatic. “I’m not a politician - I’m a technical person. But when I look at the numbers honestly, it is extremely - extremely difficult, but not impossible.

“But if we can’t reach 1.5 degrees, then 1.6 or 1.7 is much better than three. The difficulty of reaching 1.5 shouldn’t be a reason to follow three. This is my message.”

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