Last week, the Center on Global Energy Policy held its annual Global Energy Summit, which featured an all-star cast of energy leaders, policymakers and experts speaking on the most pressing energy and climate issues we face today. This year, in a virtual setting, speakers hailed from every corner of the world including Africa, South Asia, the Middle East, Europe, Latin America, and North America. In the weeks to come, a few of those conversations will be shared in podcast form.
In this edition of Columbia Energy Exchange, host Jason Bordoff is joined by Dr. Fatih Birol, Executive Director of the International Energy Agency, who discussed key findings from the Agency’s groundbreaking new report on pathways to creating a global net-zero energy economy by 2050.
Dr. Fatih Birol has served as Executive Director of the International Energy Agency since September 2015, has been at the IEA for a quarter century, and is widely recognized as one of the foremost global figures in the energy world. He is also chair of the World Economic Forum’s Energy Advisory Board and serves on the U.N. Secretary-General’s Advisory Board on Sustainable Energy for All. Before the IEA, Dr. Birol worked at the Organisation of the Petroleum Exporting Countries (OPEC) in Vienna. He earned a BSc degree in power engineering from the Technical University of Istanbul and received an MSc and PhD in energy economics from the Technical University of Vienna.
Jason Bordoff: Hello, and welcome to Columbia Energy Exchange, a weekly podcast from the Center on Global Energy Policy at Columbia University. I'm Jason Bordoff. Last week the Center on Global Energy Policy held its annual global energy summit, which featured in all-star cast of energy leaders, policymakers, and experts speaking on the most pressing energy and climate issues we face today. This year in a virtual setting, speakers hailed from every corner of the world, including Africa, South Asia, the Middle East, Europe, Latin America, and North America. We're going to share a few of those conversations with you in podcast form in the weeks to com.
Today I'm delighted to be joined by Dr. Fatih Birol the Executive Director of the International Energy Agency. In our summit last week. Fatih discussed key findings from the agency's groundbreaking new report on pathways to creating a global net zero energy economy by 2050. I hope you enjoy the conversation. Fatih, we're really pleased to have you with us today to discuss the new reports finding. I want to turn things over to you for a brief overview and then I'll come back and we'll have a conversation about it. The floor is yours, Fatih.
Fatih Birol: Jason, first of all thank you very much for inviting me to your meeting once again. And as you said, three years ago we had a good discussion. I remember very well. In the -- if I'm not wrong in the library of the, your university and I will also take this opportunity to congratulate you for this great initiative being the Dean of the Climate School. It is, we have high expectations from you and academia in general at your new job. Now Jason as you said we published our report yesterday, and we are very happy to see that there is overwhelming for us. We are a modest, humble organization with some 330 people in Paris with this overwhelming reaction from different parts of the world and the many things to those colleagues who are commanding our study, who are commenting on our study, who are suggesting us new things.
And also those who do not agree with this or that finding. I would like to start why we have done this study, we started to carry out this work September, last September and entire work is being carried out with a big group of modelers, analysts, investment colleagues at the IAA in eight months of time and I believe it was a miracle that such a report came out. We see that I'm sure the other speakers must've already referred to that we see that the clean energy options today are getting more and more cost effective and cheaper and cheaper. Wind, solar, which we crowned three months ago is the new king of the power markets. We are seeing many efficiency measures are taking the cost of electric cars are coming to, and these are all good.
And the electric car says our breaking records, solar installments the same, but at the same time as we have announced only a few weeks ago, again, the global emissions are increasing substantially this year. The -- our estimate for the 2021 is very clear, this year we will see the second largest increase in the history of the world in terms of emissions huge increase. Many governments again, another aspect, many governments around the world are committing themselves to a net zero carbon neutral by 2050. These political statements are also very good, but as I try to mention it is the President Biden's climate leader summit, there is a growing gap between the commitments or in other words rhetoric and what is happening in the real life. So what we decided to carry out a study while we are happy welcome one country other coming to the commitments with 2050, what does it mean in the energy sector?
What needs to happen in the energy sector? Because as we all know, energy sector emissions are about 80% of the global total emissions. So the -- if we want to reach those targets, we need a major transformation in the energy sector. So our work is if I can simplify and my colleagues those modelers who work on this since eight months, shouldn't hear what I'm going to say. Our job was simply translate those government commitments in 2050 to in the last -- in the next 30 years, what needs to happen, what actions need to be taken in the energy industry? So that we can reach those targets. So this is what we have done and if I can summarize what the VERT has to do in the next 30 years, I see three important tasks for all of us.
Number one, especially in the next 10 years or so, make the most out of the clean energy technologies that are already in the market, such as solar, such as wind, such as efficiency, such as electric cars, such as nuclear power in some countries make the most out of them, is number one. Number two, in parallel to the first one, there are sectors that needs much more effort than only with renewables efficiency to decarbonize. So therefore, there are technologies which are under development today, such as advanced battery technologies, such as different hydrogen solutions, such as the direct air capture. We have to push the button of innovation in parallel to what we are doing with the existing ones. So this is the second job we have to do. And this is not enough these two, a third one, we have to reduce the use of fossil fuels substantially. So three different jobs. Make the most out of the existing clean energy options. Second, push the button to innovate the technologies on the development, which will be badly needed for the sectors such as hydrogen steel, cement, aviation, shipping, and so on. And third reduce the use of fossil fuels. How will this happen? Now, this will, I should say the key word here, or the key line, if I may say, so is mobilizing investments.
Now, today you follow our work closely Jason, thank you for that. As we have a mention in our work every year, how much investment was put in the energy sector today, the global energy investments for coal oil, renewables efficiency, everything's about $2 trillion. In order to make this transformation in the energy sector, this $2 trillion in 2020 for example, need to go to $5 trillion. And not only that, this surge in the investment is not enough today of that $2 trillion, big chunk goes to fossil fuels. And the $5 trillion, 2030 big chunk, almost exclusively need to go to clean energy technologies. Now, is it possible? When we look at the global capital, it is possible. Especially, maybe we can come to this in the discussion for the North America and Europe but the capital is there. We also look, what does it mean this transformation for the economy, for jobs, this part of the work we carried out together with our colleagues at the International Monetary Fund IMF.
What we found out is that this historical search in the investments lead to each year an additional growth of 0.4% point for the global economy. So investment search, additional economic growth. Jobs, so we look at the jobs also very carefully. We see two different aspects of that. Number one as the result of huge investments in the clean energy sector for solar panels, electricity network is building grids modern digital electricity grids, car manufacturing and others and efficiency in construction and others, we add about 30 million new jobs, but we are also losing about 5 million jobs, especially in the communities or the countries where the -- we've just, which are close to fossil fuel resources are using fossil fuels for their economic activity. So the 30 million new jobs and 5 million lost, but they are not in the same places.
They are different places. So this important challenge as we highlight in our work. Now, what kind of energy VERT in 2050? Today, as we stand today in the year 2021 global energy mix is dominated by fossil fuels, close to 80%. And in 2050, if this transformation we are talking about can take place, it will be dominated by clean energy. Let me give you one example, solar today, the share of solar in the global energy mix is about 1%. In 2050 it goes up to about 20% and as such solar becomes the single largest source of global energy mix, such as jumped up so big change. And I should tell you that the global energy demand in 2050 -- this is also interesting to note 2050 is smaller than today, fueling an economy, which is larger than today and the population larger than today, mainly as a result of energy efficiency another important topics.
Now, what we have done Jason, we have not only make this calculations, projections, that pathway, we call it between now and 2030, 2050, we have in our study, we came up with over 400 milestones for the governments around the VERT to realize some signposts or milestones as we call it. And I would like to tell you a few of them. As of this year, no need for additional new investments for oil and gas fields in new fields, no need for coal mines or coal mines expansion number one. Number two, as of this year, no need for unabated coal fired power plants. Another one, 2025 no more sales of internal combustion engine cars.
Another one 2040, the global electricity generation is net zero. So these are some of the signposts we are putting in our report and there's more than 400 of them, and this is I think for us to explain the government’s stakeholders, what needs to be done, not only making adjust, focus or projections. Two other points and I finish here. In our report, we also highlight the critical importance of international collaboration. We have maiden a sensitivity analysis if I may say so, or the alternative analysis, and we have seen that in the absence of an international collaboration, we will see that the reaching net zero targets will be much more difficult if at all possible. So international collaboration is critical here. And once again, I am thankful to the President Biden for organizing this Climate Leaders Summit and bringing many governments together in that context.
Finally, if I ask myself looking at the numbers, looking at the projections looking at the energy sector, the appetite from governments, industry citizens, whether or not this next 2050 is something that VERT can reach. My answer is the following, the pathway we put if you -- if one looks studies that the pathway is the pathway to reach net zero by 2050 is narrow, but still achievable if there is a perfect international collaboration and if the governments around the world move accordingly, at least similar to the milestones we put together. We have Jason, came up with the world’s most comprehensive pathway, and I just set to up to net zero, but this is a pathway. This is not the pathway. And therefore, different governments with different backgrounds, different priorities may come up with the pathways, but we wanted to put it on the table in order to provide a framework for the international and national discussions. I stop here and looking forward to our chat our discussions, I should say.
Jason Bordoff: Fatih thank you so much, and congratulations again to you and the whole team for putting this important landmark report together. Laura Cozzi and Tim Gould and the whole team that put it together a huge congratulations to them. And thanks for being with us to talk about it really interesting set of opening comments and remarks. Especially your last point I was sort of struck by the notes and reactions I was getting yesterday that look, the show is we can do it or look the shows it's almost impossible, and people are having quite different reactions to have significantly and quickly the scale and magnitude of the changes you described required. So I want to -- we're certainly not going to have enough time. We have just about 25 minutes or so. And I want to ask you about several pieces of what you just said. Let me start with investment, which was one of the first things you talked about from two to I think almost $5 trillion. I wanted to ask you, where that comes from? Is this public sector spending that needs to happen? Is it mostly private sector? What's the role of the multilateral development banks?
Fatih Birol: Okay. So first of all Jason, I should tell you that there is no lack of intention capital. Capital goes there, where it feels it smells that it will make profits. Okay. So I don't see a big problem or big challenge. There is a challenge, but not a big one in North America and in Europe. The issue is what will happen is Ian mentions that Ian asked, by the way greetings to Ian from Paris, what will happen in India? What will happen in Indonesia? What will happen in Africa? Because why it is important? It is important because bulk of the emissions growth become from those countries, the emissions growth will not come from Switzerland or from UK or from France or I don't know, Canada. It will come from these countries.
And when we look at the clean energy investment flow in these countries we see a big hesitance from the companies and investors. So what needs to happen? For me, most importantly, governments, including the US government, but also other major countries, especially those who are in G7 and G20 should give an unmistakable signal to the investors. What is that? You invest them. If you invest in the clean energy options, this is a lucrative option for you by providing the investment framework, but not only this, they should also give the unmistakable signal to the investors that you investor be careful. You are investing in a technology, which is working against our fight against climate change, a dirty investment. You make a big risk to lose money there. So if this can be given, this will be I think the number one, very important signal. Second, I think 2050 net zero is for the world, but as we put it in our report Jason, rich countries in my view need to reach their targets in our report five years earlier than the others. Give more space for the emerging countries.
And at the same time support them through different mechanisms. Third and I stop here. We have seen where the bottleneck is I tried to highlight where the bottleneck is. Namely, the clean energy finance in the emerging world, seeing this bottleneck, we are coming up with a series of similar to this one study on 6th of June, working with the World Bank and the World Economic Forum financing clean energy transitions in the emerging world. We are coming with this report, and this is a report that we are going to find -- we are going to release 9th of June, I'm sorry for that 9th of June and if you wish my colleague team Gault the others will be happy to share them with you and with your colleagues. And I believe there is a job for the domestic governments to do, to prepare the basis for the attracting clean energy investments so that they can prepare their economies for the future modern economics, but also in the international financial architecture we may also for some amendments if I may say so, we will come up with some suggestions. I understand that our friend Ken Rogoff is or will be a host of you today or yesterday. I know John will be there. It is an area that Ken and myself discussed several times together with you, Jason, in Davos and as well.
Jason Bordoff: Thank you, Fatih. Several additional topics I wanted to get to. I know we have limited time, so I want to unpack the finding that made many headlines as you know, no new investment in fossil fuel supply. And you've warned for many years about the risks of climate change. You've also warned in recent years about the risk of under investing in oil and gas supply, because the pace of decline in the sustainable development scenario, the pathway to the Paris goals was exceeded by the pace of natural declines, but now you're saying no new investment in fossil fuel supplies. So just help explain to people why that shift for some who I think reacted yesterday and seeing now as being inconsistent?
Fatih Birol: Yeah. So as you know Jason, we make scenarios. In this scenario what we just came up with, there are two aspects. One is the demand, the other one is the supply. On the demand side I imagined one of them, for example the banning of sales of internal combustion engine cars, moving to basically electric cars. This -- if this happens, you don't need oil as much as today, but the risk is if we cut the supply, but we fail to reduce the demand is a risk. Or the other way around, if you don't cut the supply, the new investments, oil investments, but the demand goes down as a result of what is happening in the with cars or trucks or petrochemical industry, then there is a problem. So therefore the, one of the issues that we underline that we need an order transition here of the global energy system. If we did not have, as we imagined in the beginning, if we didn't have such a climate goal, then there is no problem. Of course, demand is coming strongly. Supply is coming. We are saying, what we are saying is we are just translating that 2050 government target to the real action in the energy industry. And this is how it goes you have the today 90 million barrels per day of oil, you can hit 24 by 2050, if the governments are serious to reach their targets. If they are not serious, if it is, then we don't reach the target, then of course there'll be a different oil demand and different oil demand supply picture.
Jason Bordoff: And what does the study find about fossil fuel investment beyond new supply and new fields say in existing fields or in projects, you said no new coal plants, but as you know, there's discussion debate about how the multilateral development institutions think about things like gas, power plants, and particularly this ties back to a question that I see has come in from so many so grouped at the New York Times. Yesterday at our conference, we had leaders from Africa, the vice-president Nigeria, for example, who basically said, he thought it was unfair and counterproductive to stop gas development in a country like his, that is using very little energy per capita. How do you think about the kind of investments needed are things like natural gas, part of that, and is that consistent with your net zero 2050 scenario?
Fatih Birol: First of all again, I want to iterate one thing in general of what I said a few minutes ago and come to the gas and oil. And this one in my view misunderstanding, we're challenged to understand. First of all, once again, there should be a difference between the rich countries and the emerging countries. This is different in terms of timing, in terms of obligations, in terms of what they are going to do plus again, as we said, in our report, the rich countries should support the emerging countries in terms of the technology and in terms of the maybe de-risking some of the clean energy investment. So this is one issue. Second, what we are saying is we do not say there is no oil, or there is no gas anymore. As of 2022 what we are saying is it is use will go down. Much more in -- much strongly in coal, less in oil and a much less in natural gas. And we are seeing that the investments in the all other existing fields, approved fields will continue. We don't stop them.
What we are talking is developing a new fields or no new exploration, for example, just to make it simple, no new exploration activity and in fact, when you look at the numbers today, many IOCs expulsion investments are almost close to zero for some time and therefore, I would make a distinction between developed countries and developing countries and the no gas versus less gas and also the fields, which are all of the approved and the fields, which are new to be discovered. So three different distinction here.
Jason Bordoff: I want to ask you about innovation and what kind of new technologies you find. Do we have all the tools we need or are there a lot we don't have yet? I know over the past weekend Secretary Kerry here in the United States made a comment that about half of emissions in net zero 2050 will come from technologies that are not ready yet sort of led to some confusion about whether that meant they had to be invented or they weren't available at commercial scale, but what do you think, what do you find is needed in terms of new technology in innovation?
Fatih Birol: So first of all, about the numbers and second secretary Kerry. What our numbers show that off the – this reduction between now and 2050 of the emissions, more than 50% can come from the technologies we have already in our hands, in the market, ready for the market, what that was again solar wind, hydro, nuclear electric cars and the others. But there are some sectors which needs technologies, which are under development and they need innovation. And this technologies would make around close to 50% of the emission reduction and they are not ready for the market. And some of them are for example where solar was 10 years ago. Some of those technologies where 10 years ago is solar make this as a result of government support, as a result of incentives and the others R&D, solar is today a became a mature technology.
We have to do the same story for those technologies, such as the advanced battery technologies hydrogen carbon capture and storage direct air capture, some of them. And when it comes to Security Kerry’s statement, I was to be honest with you, I was shocked by some of the reactions. I think Secretary Kerry is one of the greatest hopes we have today it is, we are making reports, graphs, but he's making real life changing the politics of the climate change. He might have chosen this or that word, but I understand that he wanted to highlight the issue of critical importance of innovation and the critics to him I find to say the least, extremely unfair to be honest with you. I think those people who are genuinely, I understand genuine, I underlined genuinely, genuinely interested to fight against climate change should I think support Secretary Kerry, his team, and what US government is opt today to do at home and abroad. Of course, we can give our comments suggestions so on, but I found that line of if I may say criticism, at least unhelpful, if not irresponsible.
Jason Bordoff: Let me ask you just quickly about one or two particular technologies. I think I'm right when reading the report that many of the IPCC scenarios for say 1.5 degrees have significant amounts of carbon capture with bioenergy. The IAA has less of that and more relies on say renewables and hydrogen. Is that right? And can you talk about that shift? What do you see happening in the renewable market or the market for green and blue hydrogen that you see so much promise there?
Fatih Birol: Jason, what we see is that the solar is one of the cheapest source of new electricity generation, if not the cheapest one in many parts of the world, especially in the developing world. And we see about but in our pathway, some 90% of the electricity generation comes from renewable. So big relief, at least because what we see is that the, we will first decarbonize the power sector and then the rest. So if we can put the recovers power sector, put it in bed, if I may say so, and look at the other tough issues at the same time. Now because it is getting cheaper, there's a strong support and it is easier than others. And for the carbon capture and storage I know that there is a lot of discussion on that.
But we think it is a critical technology. It's a critical technology. And without the carbon capture and storage, especially in the emerging VERT, it will be impossible to decarbonize it the speed we want. Clear countries, Jason, China, India, Indonesia, over 60% of the electricity comes from coal and the hydrogen sector is again coal and the others. And these three countries make almost 45% of the global population. So without providing them with some solutions, new technology solutions, just to tell them, do this, do that is not a right way to do, and for us carbon capture and storage is important, but unfortunately it did not provide a positive, hopeful sickness that we wanted to see up to now. And we hope with the US government, with Norway, with UK, some of the other Europeans, Japan, Middle East countries and Asia, we will see carbon capture and storage being the part of the game, but a RCCS carbon capture and storage expectations are we are lower than the most of the IPCC 1.5 degree scenarios.
Our bio-energy numbers are lower than most of the, if not all IPCC scenarios. If I can say one thing here, Jason, unfortunately some colleagues who are really funding solutions to are incredibly difficult to solve a problem. Don't lack this technology or that technology, even though they are clean because it's not they are in “love it” we don't have that luxury. I mean, colleagues who are saying it's, don't make their hands dirty with data. I mean, if you look at the data, it is impossible to exclude for example, I'll give one even more controversial nuclear power, okay. If you don't want to put nuclear power in your country, I understand, but nuclear power today in US and Europe is the single largest source of clean electricity. If you just shut them down, how are you going to fill it with the entire system, with the solar and wind in such a quick part of time and with a secure electricity system. So we also at the hour while we make this report we not only in a scenario to like this year 2050, but also we'll look at the energy secured aspects and also the economic growth aspects as well.
Jason Bordoff: I want to I think just in closing, because we'll run out of time, ask you made a really important point earlier about energy efficiency and finding that the energy use in 2050 is lower than today. I noted before the conversation we had with leaders from Africa, for example, of course, there's parts of the world using very little energy per capita. There's a pretty clear historic relationship between GDP and population growth and energy use. So that requires a pretty significant change. You also find that in behavioral changes like moderating temperatures for heat and cooling, maybe riding bikes instead of cars in urban areas. I'm wondering if you could talk more about that. And also as part of the driver for that, tell me if I'm right about this, obviously for, you're not only modeling net zero 2050, you're trying to achieve a certain temperature increase and to get there, you can draw a straight line, but I think your modeling actually has something more ambitious than a straight line, which is why emissions needs to start falling even faster than a straight line, and because the energy system takes so long to turn over, there's only so much you can do. So you need a lot of behavioral change because there's some stuff you can do sooner than others. Is that right? And can you talk about?
Fatih Birol: Okay, we have couple of minutes, but I should tell you that first of all, in our pathway, in addition to reaching the net zero emissions by 2050 and securing the energy supplies, providing economic growth, we also come up with the, one of the STG goals full electricity access. And overwhelming majority comes from renewables mini grid solutions, half grid solutions and other solutions, which is very important as you know for they are since almost two decades. Now, we -- for us the most important for the emission reduction, as you have mentioned most important milestone this, again, the keyword is by 2030 halving the emissions, we half the emissions with until 2030 and see a decline, but energy sector is very slowly moving sector. Infrastructure is very, very resistant. So like it is not – if you talk about the behavioral changes it is not like a bicycle energy.
It's like a big tanker changing the direction will be taking time. It is the reason we are urging. If we are serious to reach our targets, urging, to move quickly here. Behavioral changes I mean, they are about the altogether they account about 4% of total emissions that we are, it's a big chunk, but we also wanted to highlight that there is a need for citizens to be a part of the solution as well. They have to change some of the behaviors. They have maybe some cooler temperature, maybe some of the is short haul flights replaced by mass transportation by trains and others. We have come up with those suggestions to give an idea what kind of behavior changes are needed. And this behavior changes will not happen by our reports by our speeches, and so on. This would happen by the governments informing them and sometimes also giving signals to their citizens.
Jason Bordoff: Fatih, thank you again. Thanks to all of you, our listeners for joining us on this episode of Columbia Energy Exchange. For more information about the podcast or the Center on Global Energy Policy, please visit us online at energypolicy.columbia.edu, or follow us on social media @ColumbiaUEnergy. I'm Jason Bordoff. Thanks again for listening. We'll see you next week.