 Okay, good morning. Thank you to everybody for being here today. My name is Sarah Ladisla. I direct the energy program here at CSIS. We're very pleased to have all of you here today for the World Energy Outlooks 2015 Special Report on Energy and Climate Change. For those of you who haven't gotten a chance to read the report, it's been out for, I think, a little over a week now, it's a really, really fantastic, as is typical of the World Energy Outlook and FATIS team, a fantastic overview of where we stand in terms of the challenge that we are facing for the upcoming Conference of Parties negotiation in Paris at the end of this year. And as the IEA has tried to do over the last several years, what it does is sort of takes a snapshot of where we stand in terms of the overall climate challenge, but also provide guidance and an approximation of what it would take in the energy system to be able to reach the kind of targets that the international community says it wants to, and provides actually some very interesting guidance for negotiators themselves, both for the talks themselves and then also what should be done after the negotiations and the world after Paris. So we are really, really pleased to host that conversation here today and have Fatih Baroul, the Chief Economist and Incoming Executive Director of the International Energy Agency here to lead that discussion. We're also pleased to have with us Dave Turk, who's the Deputy Assistant Secretary for International Climate and Technology at the U.S. Department of Energy, who spends a lot of his time focusing on what the U.S. government is doing in light of to deal with sort of international climate efforts, what they're doing to coordinate international clean energy technology efforts. He's also spent some time on the negotiating team himself, so he's not unfamiliar with what the challenges are. I'm gonna invite him up here first to please introduce Fatih and talk a little bit about how they're thinking about the negotiations. Fatih will give a presentation of what the report says and then we'll open it up for discussion. Today's discussion is absolutely on the record. It's being webcast, so if you could please silence your cell phones and then when we're doing the Q and A, wait for the microphone so that our audience, not physically here, can participate. So without further ado, please, Dave Turk. Well, thank you, Sarah, and thanks for CSI as hosting this meeting and thank you all for coming out, especially on a Friday morning. I think this is an impressive signal of Fatih's star power to get this many folks in Washington in June to come out to a meeting at nine o'clock on Friday, so thanks for everybody coming. In thinking about how to introduce Fatih, I went back to the statement that Secretary Moniz, my boss, who very much wished he could be here today, but he was on a plane last night going to Vienna to participate in some important negotiations, so he sends his best Fatih, but he put out a statement, Secretary Moniz put out a statement on Fatih not too long ago was announced as the new Executive Director of the IEA, and there was something in that statement that caught my eye, which I think is exactly the right way to introduce Fatih, and that is that the Secretary said that he was the ideal candidate to take over the IEA at this point in time, and that's the kind of language you don't usually see in statements in terms of people taking over new positions. Usually it's they're a terrific leader, they're terrific this or that, but ideal is a very strong word, but I think in this instance, it fits perfectly in terms of the challenges that the IEA is facing and the importance of the IEA. I'd also say that certainly from the US perspective and Secretary Moniz and the rest of the US government, the IEA is in a very incredibly important part of the international architecture when it comes to energy, when it comes to energy and climate change in that nexus, something Fatih has spent many, many years on. Secretary Moniz agreed to chair the IEA ministerial meeting that'll take place in November of this year, just a few weeks right before the Paris cop in Paris, so there'll be I think a quite strong connection to the negotiations and the sense of energy ministers from around the world coming together to show some foundation of innovation and technology and price reductions, a lot of the things the WIO report gets into as well, but Secretary Moniz chairing that meeting is just one signal of how important the US considers the IEA, both what it's been able to do in the past, but frankly going forward in terms of its importance in the world that we all live in. So let me just break down the word ideal, why do I think and agree with my bosses? Everybody always should agree with their boss when they say something along those lines. What is it about Fatih that makes him the ideal leader of the IEA at this point in time? First of course is the normal kinds of things you see in his bio or his resume, different background experiences, whether it's academic background, his years at the IEA as chief economist, founding and sharing the IEA energy business council, chairman of the World Economic Forum's Energy Advisory Board, a member of the UN secretary general's high level group on sustainable energy, whole series of awards from countries, some of their top awards that they've offered, it's just an incredibly impressive background and experience set. He's also incredibly dedicated and tireless for those who have gotten to know Fatih over the years, just one data point on that. The week preceding this, Fatih was in all an official business, at least I think it was all official business. Monday he was in the UK, on Tuesday he was in Brussels, on Wednesday he was in Ireland, on Thursday he was in Copenhagen, on Friday he was in Germany, and then he decided to keep working and on Saturday he was in the Slovak Republic. So obviously for those who do a lot of flying, just thinking about that makes me tired, but it's just one data point on how dedicated and tireless he is and passionate about what he does. Third, and I think this is incredibly important, especially at this point in time, he's someone at least that I've found who really enjoys what he's doing, and that's important for a leader, certainly a leader like for an organization, IEA, but also a leader in the global community, for someone who's passionate about what they do, looks forward to working every day, and that I think rubs off on everybody around them. I know certainly that's the feeling we get from the United States side of things. That leads towards him being not only a terrific leader, but also a diplomat, and that's something that's gonna be incredibly important as the IEA goes forward. He's also a strategic thinker and a top-notch analyst, and there's a clarity of thought that for those who've not heard Fatih speak before and looked at some of his work, I think you'll see that today. There's a clarity of thought and an ability to cut through the background noise and really focus on the essentials. So that brings me to the reason we're all here today and the WIO Special Report on Energy and Climate. Let me just say a few things about that. One, there's a lot of reports, analysis, presentations going on this year, as Sarah said, and the lead-up to the Conference of the Parties in Paris in December, the big opportunity to get a global agreement. I would say if you don't read anything else, this is the one report to read. I think it's got a clarity of thought and analysis. I think a lot of that comes from Fatih, but also from his team at IEA, which is an incredibly dedicated team. We're also graced by the new deputy executive director, Paul, who's sitting in the front as well, who will be an incredibly important part of the IEA team and some other top leaders of IEA. So there's a clarity of analysis and thought in this report. It's also meaty. There's a lot in there. It's not that thick of a report, unlike some of the other IEA reports that come out there. You can actually carry it and not have your arm get tired, but there's a lot, a lot in there. It's also, I think, guaranteed to make you think. There's a lot of reports that go out there and it's just sort of same stuff you've seen and heard previously and it's just kind of stale, if you will, but I think this is one, at least it made me think, and I think it will do the same for others as well. It's also very real world focused, real world oriented. With that, it's also specific and actionable. So I think that's enough said for me. Let's get on to Fatih, happy to answer questions at the end, but it's just terrific Fatih to have you in Washington. Terrific to have this report out there. I think it's an incredibly important contribution in this critical year and even more so, it's terrific to have you leading IEA going forward very soon and Paul and others in the IEA leadership team and from the United States, we look forward to working with you and thanks for coming. So good morning, ladies and gentlemen. It's always a great pleasure to come back to Washington but also to CSIS, this is a great pleasure. I, as I told Sarah and Frank, I always feel at home, so you don't have the challenge of speaking outside of the homes because I feel at home here. Thank you very much for inviting me. This report is specifically on energy and climate change but we will have our World Energy Outlook, the very big book, one of those door stoppers coming in November and Frank kindly gave me a green light that I could still again have an opportunity to share the results of that report with you which will look, among other things, what will happen if the low oil prices with us for many years to come for the global energy sector, not only for oil but gas, renewables, nuclear and the positioning of different countries in the world. We will have a special focus on India and many other things and I will be very happy to come and talk to you and that book sometime towards the end of this year. Many thanks today for, it is very, very kind, very generous words. I am very much looking forward to start my work as of 1st of September. And if I was concept of success in the last 20 years and it's 21 year I am in the IEA, it is mainly because I was able to, I believe, build a very good team. I am a man, some of the colleagues know here very well my second biggest passion is football, the soccer, so as you call it. And my philosophy, working philosophy comes from there. You have to believe the team work. So therefore it is extremely important that we build a very good team and play collectively as a team rather than one man, one person show. In that respect, Dave briefly mentioned, I am very, very much looking forward to Paul Simons. He's somewhere here, I guess, he's over here just in the front door. Paul is going to join in a few weeks of time to IEA as my deputy and I am very much looking forward to work with Paul. For the colleagues who didn't know Paul was already working with the IEA and the IEA secretary as the chair of one of our major committees who looks at the policy issues more than four years if I am not wrong, Paul, and he's been ambassador to Chile. He has a lot of experience in policy making. I am very much looking forward to work with Paul in a few weeks of time and for a longer period. Again, I am very, another member of the IEA team, it is Lazo Varo, Lazo was also here yesterday giving, I think, another speech and our gas market Lazo is working now. He's a division head for gas column power and I expected Lazo will play also a much broader role in the IEA work in the next month to come. And finally, I am Mr. Amos Bromhet. Amos worked with me 13 years in the VO team and he is now going to work with me together in the executive office of the IEA and Amos and Norvino, each other very well or too well, perhaps I should say. So we're almost 13 years working together and this is definitely Washington DC and of course, CSSC will be one of the addresses that we are going to visit a lot. So we made a book, Energy and Climate. First of all, the book's report is here. It is freely downloadable and anybody who goes to our website can find it. And many people ask us, you are an energy organization. Why are you making a report on climate? Our answer is very simple, as I will tell you in a minute, energy is responsible more than two-thirds of the emissions. If you cannot find a solution in the energy sector, you cannot solve the climate problem, which we believe is an important issue for everybody. Therefore, there is a meeting in Paris at the end of this year and for that meeting, we are coming. What are the demands of the energy sector to bring more realism to the discussion and increase the chances of implementation of the decisions coming from Paris? So we have about six months for that very important meeting in Paris and we also see that the momentum is building. It's a good thing, the political momentum. We have seen, first of all, last year in November, a historic announcement of President Obermann, President Xi, about China, U.S. confirming their determination to come out with a result in Paris and also EU, which I should say, the champion of fighting against climate change. Since years, have a very firm target. Now, for the first time, we have seen many times the momentum is building, but there are some differences and I will outline during my speech so that we know anybody who works on energy cannot afford to follow what is happening in climate policy and I will try to prove it. One thing is, in the past, we have seen mainly developed industries, countries, putting the climate, pushing the climate policies, but now we are seeing many developing countries coming with commitments. This is important for the first time and I will give you the names of these countries, but to give you the umbrella message, it is not anymore developed countries pushing the agenda, but developing countries are coming alone. And energy industry, they are now engaging more and more with the climate change issues. Now, how much, who, this is a question, but I can tell you, if any energy company, whoever you are, if we believe that the climate policies will not affect our businesses, we are wrong. There will be this or that level of effect. It can be oil because of the efficiency policies, the demand, it can be gas because of the pollution and coal, it can be electricity, renewables and whatever, climate policies will affect energy businesses. This is happening and therefore energy sector is being engaged energy industry with climate change. And as I said, energy is by far the most important sector in terms of the contribution to the greenhouse gas emissions. Now, we made this report, of course, but we are very much aware that the energy, while it is associated in this report, in main discussions nowadays with climate change, energy is in fact a good thing. It brings comfort, it brings economic growth, it brings modernization. And there are other aspects of energy, such as energy security, such as the access to energy. 1.2 billion people having no access to modern energy services today. And we tried to, in this report, bring them, all of them together, climate change being the most important part. But if I can say one thing to the climate change negotiation and the leaders going there, any agreement in Paris which does not put the energy at its core risks being a failure from the start. So just mentioning this very fact which I think is important. Now, there are, as I said, there are some encouraging signs. And one of them is, in addition to political momentum, is about the data. What we see is that last year, for the first time in the history of 40 years, we have the emissions data in a CO2 emissions data in a reliable way, we have seen that the CO2 emissions did not increase, then the global economy grew. In the past 40 years, three times before, global emissions did not increase, but there was a recession, economy went down. Last year, global economy increased slightly more than 3%, whereas the global emissions remain flat. This is excellent news, this is very good news. Of course, we do not know, it's a one-off or not, it's a structural or not. In my view, it will be difficult to keep it that way for a long time in the absence of new steps. But we look into that, why it is happening. This is happening, if I can give three major reasons. One, renewable energies. When we talk about renewables in many countries where oil and gas is important, there is, in some cases, there's a smile in the face, is it real or not? I give you a number, it's not about forecast. Last year, globally, 45% of the new capacity coming in the electricity sector globally was renewables. 45%. The other put coal, oil, gas, nuclear half, more or less half, the other half is renewables. Made a big in-road renewables, this is one. Second, even more difficult to convince many of us. Efficiency policies are now bearing fruit, especially two areas. One, household appliances, like refrigerators, TV sets, air conditions, and, on the transportation sector, cars and slowly trucks. And this, in turn, slows down the oil demand growth and, therefore, COT emissions. So this is the second, renewables and efficiencies. These are bought globally. In some countries more, some countries less, you can find which country has this in our report. Third, China and coal. For the first time, since over a decade, we have seen Chinese coal consumption declined. We have not seen it before. Every year it increased. And this is one of the major sources of CO2 emission increase. So, among others, these three are the main reasons why we have seen such a promising picture that the 2014 emissions were flat. Of course, we need to keep the momentum to see that this trend continues. Now, many of the colleagues here are coming from the... Since I hit the opportunity to come to CSA as often, I know that many colleagues are not necessarily coming from the climate angle like myself. And to tell them an issue, why it is difficult to find a solution, okay? So since everybody now almost 194 countries, they all believe that the climate change, their governments, we have to find a solution. So why it is difficult? There are some colleagues like Dave who knows this 100 times better than me, but just making very simple words. The issue is to see, to identify who is responsible for this challenge today and in the future. Now, first of all, just a typical information. When the carbon goes to atmosphere, it remains there a very long period of time. So it means the carbon went to atmosphere 100 years ago, a big chunk of it's still there. Therefore, what happened in the past is very important. As many developing countries say, and as I would say, they have a point in that. When we look at the last 125 years, more than 60% of the emissions came from US and European countries, okay? But when we look at the future, the growth of emissions coming from the emerging countries is extremely impressive. The only from China, the emissions coming from China with that change in their policies is bigger than growth coming from US, all European countries, Japan, Korea, and the others put together. India emerges as an important emitter overtaking Japan while even in that context, Indians' capital emissions are one of the lowest. So there are different criteria that different countries look at in order to identify who is responsible, how much, and therefore who should do how much in the future. So the point of departure is not a very straightforward one. It is the thing why it makes it a bit complex, not a bit significantly complex. So therefore, what happened is that with a new hope for Paris, all the countries agreed that before the Paris meeting they are going to commit themselves how much emissions they are going to reduce by 2030. This is called pledges, and in the context of the climate change jargon called INDCs, and every country say, in 2030 I will reduce this much. And when we look at globally today, many countries made those pledges, and once again it is not only the industrialized world. Ethiopia, Gabon, Morocco, Russia, Mexico, US, Canada, all European countries, they said in 2030 I am going to reduce this much. China and Japan made firm indications how much they are going to reduce their emissions. If you add all of them together, you cover two thirds of the emissions today have a commitment for Paris. If they push their pledges, if they go through that. So two good news here, one, a big chunk of countries are making emissions, and second, it is not only industrialized nations, it's more of a mixed there. So we looked, if those commitments countries made officially on behalf of the governments are implemented, what are the implications of those for the energy sector? Does it really matter? Does it affect our businesses? Will it have impact on our policies, the strategies, the outlook how we see the energy world develop? And the answer is absolutely yes. There will be a material impact on the energy sector. It is the reason why I said, if the companies, the energy experts believe that the climate policies will not affect their businesses, in my view, they may be making a mistake. Let me give you a couple of examples. How those commitments can change the energy world if they are implemented. First of all, in 2030, about 25% of the global energy will come from clean energy technologies. And in my view, more importantly, energy efficiency improvements will accelerate a factor of three compared to past. Currently it is global energy intensity improvements, 0.7%, it will be around 2% per year. This is very important. If you are a major oil company and if you missed it, you make mistakes. Because you have to understand how the demand will grow. Second, in terms of renewables, about 60% of the all new power plants, the capacity expansion, will come from renewable energies. Only 40% will come from coal plus oil, gas, nuclear and the others put together. There is a big emphasis on renewables, including or perhaps even more impressive in the emerging countries. Leave aside our focus today, as of today, renewable energy investments in China are larger than Europe plus US plus Japan put together. This is the investment made today, 2014. And it is solar, it is wind and hydro power. So therefore, we will see a major penetration of renewable energies in the electricity sector. In terms of fossil fuels, biggest heat comes to coal, oil will grow, but there will be a slow down of the oil demand growth. And the natural gas will be the only fuel, fossil fuel, which we will see an increase at this market share. It is mainly replacing coal in many aspects. And total coal demand in the OECD world, in the industries will get a big hit while there will be a slow down in India and China. So as you will see, there will be a material impact on the energy sector that we cannot ignore to see. And once again, if those commitments are fulfilled. And what are the implications of those commitments on the climate change? It is, there will be a slow down of the CO2 emissions, but this is far from universally agreed two degrees Celsius target, which is still not bringing us there. So there's a big gap between the what the leaders, world leaders agreed. And what will happen because some of those pledges may not be as strong as what they should be in order to reach the two degrees Celsius target. So therefore, here comes the IEA. What do we know, what do we want as the energy sector from Paris? We are about a few hundred meters from the Verdi meeting will take place. So we thought since there are neighbors, we should give some suggestions to them. First of all, we as the IEA, we believe in a secure, sustainable energy sector for everybody. And we thought this is an important chance for the energy sector to get clear messages. And also energy sector realism is reflected in the discussion. As the two thirds of the emissions come from the energy sector, we feel responsible for that. So we have four major demands from the Paris Agreement. Number one, global emissions need to peak around 2020 if we want to have any chance to reach our climate course. If we are not able to do that, then we look at other options, how we can live in a world which is very different than today. But 2020 peak still helps us and this is the first and the foremost demand of the IEA. Second, these pledges are made, very important. I think it will be completely wrong to underestimate these commitments, pledges coming from the countries. But still we think every five years they should be reviewed whether one has to make some adjustments to them. This is the second one, I will come in a moment. Third, currently universally agreed there is one target, all the way to say two degrees. But we would like to see from the Paris, what does two degrees mean in terms of emission reduction? To see to have a signal to see a concrete figure. Two degrees is something to do with the temperature with the, it is far from the energy sector to make a picture to give a signal to the investors to make it much more concrete. And fourth, even though we believe the pledges, commitments, the governments will carry forward, we want to see in the energy sector monitor every year what is happening in the energy sector in terms of emissions and report and publish it transparent way to the entire world. So that everybody knows which government is doing what in the energy sector, as far as the CO2 emissions are concerned. Let me take you very quickly about these four major demands of the IEA. And in the meantime, I can tell you as Dave Turk mentioned, we have been talking this around the world and we have received many, many support for our four demands from Asia, from Europe, from Japan and elsewhere. So we see, even from the negotiators, we see some good chances to be a part of the text being under negotiation. So our first demand, how can we see a peak in 2020? There are colleagues here who are very experienced and they know that five years for the energy sector is an extremely short period of time. Therefore, we suggest policies, energy policies with the existing technologies. So you don't need to discover new technology with the existing ones. And second, without harming the economic growth. We made the election of the policies which do not need new technology and which do not harm the economic growth. To bring this INDC CO2 emissions, which are slowing down the emissions, to a peak which we call a bridge scenario. So five policies in our bridge scenario, bridging the commitments, pledges, and this is whatever you call them, to a two degrees Celsius world. At least to keep the door open for the future for a world where we can reach our climate goals. So this bridge. What are our suggestions? First, energy efficiency, especially on the demand side. We are demanding that, for example, the least efficient category of the refrigerators should be phase out and they shouldn't be produced anymore. Or the air conditioning equipments. Or the television sets. There should be agreement, there should be a ban in Paris, perhaps gradually, that the governments and the manufacturers agreed not to produce the least efficient category of the household appliances, which will in turn bring a lot of savings on the electricity side and therefore CO2 emissions. The same applies to transportation sector. We are coming up with some suggestions both for cars and trucks, perhaps more importantly, because of the lack of standards there and coming with some suggestions which can be embedded in the text in Paris. Second, coal. The today in big chunk of Asia, especially South Asia and East Asia, we are seeing a lot of subcritical inefficient coal-fired power plants being built. Very low efficiency. And to improve the efficiency there, for example in India, it's about 35%. Just 2 percentage point, bring you 37. And today if you go to market, you can buy 45% without any problem. But just bring 35, 37. This 2 percentage point, efficiency improvement in Asia, the savings from there is equal to the savings of the US commitment altogether, for entire energy sector. So just 2 percentage point, efficiency improvement there. Therefore, we are asking, banning of building new, inefficient coal-fired power plants. Third, renewables. More today renewables investment about 270 billion US dollar. More to put the incentives there for more renewable investments. Fourth, methane. Methane is also a very powerful gas. And there are many colleagues from oil and gas companies here. They know it very well. During the production of oil and gas, some parts of methane escapes the atmosphere. And the big chunk of it can be easily, technologically, very easily minimized if not nullified. What does it need to do that? Two things, one, government regulation and two, some additional investment from the company's side. And we have calculated how much additional investment is the big chunk for the companies. I can tell you this is nothing. Oil and gas companies today invest for the upstream sector globally, worldwide, about 600 billion US dollar, roughly. And the additional investment to minimize or nullify the methane emissions brings additional investments less than additional 1%. Nothing. But regulations are missing today and we would like to see in Paris this demand to be made. And finally, subsidies, fossil fuel subsidies. Today, we have more than 500 billion US dollar subsidies and the consumption of gas called oil products for fossil fuels make them very, very cheap, especially emerging countries, which gives an incentive for their wasteful consumption and blocks the way for the clean energy technologies. The carbon price, carbon taxes are very highly debated issue in many parts of the world. But let me tell you, this 500 billion US dollar means translated in the plain man language, it means it is an incentive of 120 dollars per ton of CO2 to emit emissions, CO2 emissions. You give an incentive, carbon price, carbon taxes give a punishment to give a disincentive to use coal, oil and gas. And this subsidies is giving an incentive to the people, please use more coal, please use more oil and please use more gas to give an incentive there because the price is so cheap, much cheaper than their real economic value. And this has also many other negative effects of those countries ranging from their efficiency to their budget of the governments and others. And this other area that we are asking for a push in Paris and it is also a discussion for the G20 leaders meeting in Turkey this year. So these are five suggestions to be able to see that the emissions do peak in 2020. And once again, they just need some policies put in place rather than expecting some technologies will come and save the world. And they do not, these policies do not harm the economic growth. And many countries are already discussing these issues. And we have made this country by country, which country can do what kind of out of these five policies and without harming the economic growth, you may want to look at our report, which is again in our website, what we suggest for other governments. So this was our first demand from Paris, peak emissions 2020 and put the right energy policies in place. Second, five-year revision. Why do we need a five-year revision? Let me explain you. There are two reasons. First, again, since many colleagues come from the energy sector today, this is a concept called carbon budget. What does it mean? It means the following. Modern nature gave us the world, the human beings a budget. It said, if you want to have a normal life like you have been enjoying since centuries, you have a budget of carbon, this gigaton. If you stay, your emissions stay under this level, then you are okay. But if you go beyond that, you may well be in trouble. We have received a budget, the modern nature. Now, in the last 125 years, by putting a lot of carbon in the atmosphere, we have already used more than half of that budget during the industrial revolution in the Western world and the new emerging countries coming and using a lot of coal. We have already used more than half of it. And if we don't change our policies, we will be seeing that that budget will shrink and shrink. And around 2040, we can say goodbye to our hopes to see that we can live in a planet that we have been enjoying since centuries. Therefore, it is important we thought every five years to see where we are in terms of carbon budget to review our situation globally. This is one reason. The second reason is some of the solutions we think today are expensive, maybe less expensive in five years of time. When you look at the price, the cost of PV, the solar, there's a big change there. It may give you a new idea to come up with a different, previous different commitments, different reviews. So this is the second reason why we think every five years they should be reviewed. Third division, two degrees centigrade, this is very good. But what does it mean for the energy sector? It's a rather an abstract target. We would like to see the world leaders, as they did in G7 meeting in Germany recently, come up with a target if they are serious so that we know what we are going to do as energy sector. We would like to see they should tell us in the year X emissions will need to be reduced by that percent. They did it in Hamburg, in Germany very recently. And why it is important? It is important to give a real signal to the investors so that they make investment in a direction that it will bring money to them. Or they don't make investments in an area that they will lose money because of changing climate policies. For example, we would need a lot of solar if you want to go to a two degrees centigrade trajectory. We need a lot of solar, but to see that penetration, one needs to see the cost of solar to further to come down. In China, very impressive, last six years, cost of solar went down by a factor of four, huge. In OECD, a factor of two because the signal was given. The same for the vehicles. Only in developing Asia, we expect in the next 20 years, 1.5 billion new cars will come in the streets. And what kind of cars they will be? We don't know. Many countries put some efforts for electric cars, but to see that, we have to see the cost of battery to come down. And those things to happen, there is a need, if the governments want to do that really, a direction from the governments that we want to decrease emissions by that percent so that the investors get a signal. And this is our third demand. To get it from Paris, a clear signal, the world wants to reduce the emissions by X percent in the year Y. Our fourth and final suggestion is the following. As I said, the energy sector is at the heart of it. And the governments made some commitments, some pledges. And these commitments need to be every year to be tracked and measured and the results to be published if they are going in the right direction. Although we trust the governments, at least most of them, we would like to see that they are making right progress. And if they are not, everybody should know what is happening in terms of the emissions in the energy sector, different sectors of the emission sectors, the power, transportation, and so on, so that everybody has the access to that information. This is our fourth suggestion from Paris. And I am, once again, I can tell you that I am so happy that it has been very, and as they imagine, it has been very warmly welcomed by many, many governments and community negotiators. So let me finish by saying that these commitments are very good. I expect soon other countries are coming and joining the others. They are not solving the problem, but it will be extremely wrong to underestimate them because they are creating a momentum and making important steps for the decarbonization of the energy sector and improving the efficiency of the energy sector. Companies, energy companies, in my view, need to follow what is happening. They may be against this for this, but only for the sake of their businesses, they have to see what is happening on the climate front. As I said, for an oil company, for a gas company, for a coal company, for renewables and everybody, these are affecting their businesses. And I'm not saying about the forecast and others, but it is happening now. I give the renewables numbers, I give the efficiency numbers, it is happening now, and it will happen more in the future. We have, as I said, four demands from COP from Paris, which will be worked very closely to see them in the outcomes, which is the peak of emissions around 2020, a five-year revision to see if we have to make some changes in our commitments. We have to see that a target is giving for the energy sector in terms of emission reduction and to track the transition and developments. And as Dave also mentioned, every two years we have our ministers coming together. In Paris this year, only two weeks before the important meetings in Paris. And we are honored that the Secretary Moniz is going to chair that meeting. There'll be about, I would guess, 29 IA countries, ministers, energy ministers, ministers from our partner countries, China, India, Brazil, Africa and Indonesia and other countries, and several executives of the energy industry we come and discuss. And I hear many colleagues here whom I've worked many, many years from Adam Siemensky to Herman Fransen. They know me. I am since 21 years in that year, very long time. And I have seen about 10 ministerial meetings. In some of them, I was very genuine. I was not allowed to come to the meeting room, but I follow from the distance. There is many things change, but there is one thing change in this meeting. For the first time, we have the climate change as the main agenda item in this ministerial meeting. So think about this, energy ministerial meeting of the IA and the climate change is the leading agenda item, which I hope will give a good constructive input for the meeting in Paris and constructive input from the IA member governments from the energy sector for a solution which is crucial for all of us. Thank you very much for your attention. Thank you. Fanti, thank you very much. That was an excellent presentation. We've got a bunch of time for discussion. I wanted to start off with something that can engage both you and Dave. From the perspective of your very strong language on energy efficiency and what can be achieved in the agreement in Paris through banning of inefficient appliances and other technologies. I'm just curious, and Dave, I know that you work a lot on the sort of clean energy ministerial and other initiatives that do have a lot of appliance efficiency sector efficiency initiatives. In practice, how would that look? So you've got all of these high level objectives that are stated within the context of the negotiations that you have to translate into practice, right? That governments have to follow or people have to then sort of follow up with other concrete action. And as you know very well, the discussion around the negotiation themselves is on how legally binding or not those particular agreements are. And so from an energy sector perspective and from a government perspective, how would you envision the banning of such energy inefficient appliances and technologies? And how would that work? How would the phase that work? And then Dave, do you have any idea how that works in practice? If you wish, I can just give a concrete example in from Europe and perhaps in fact a data point and they may want to give a U.S. or broader perspective. So in the IEA, we reviewed what happens in different countries and energy sectors every year. And we have this in-depth reviews and in this committee I mentioned to you, Paul was chairing sometime before the duck angle who is also with us, who was also chairing that committee. I'll give you one number. According to our analysis, in the last 10 years in Europe, the number of electrical appliances, television sets, refrigerators, air conditioners, wash machines increase almost three times per household. But household electricity consumption in Europe remain the same. This is exactly for the reason what you said because Europe banned the least efficient refrigerators, least efficient wash machines together with the manufacturers. They had agreement. And if this can be done in a broader way, which can be done, to be honest with you, easily if it's a global move because you will not have the problem of free riders at that aspect. And this can be definitely put forward and you will not have a major, if at all, an economic negative implication of that. And we have seen this happening in Europe and there are examples in China, India, et cetera, but perhaps David wants to talk about the US example as well. Now thanks for the question and the efficiency part of the equation is such an important one as Fatih's presentation showed roughly, I think half of the pie if you will of those additional policies that can be put in place to get us to the bridge scenario and the peaking that Fatih outlined. So I'd say a couple things on this. One, there's certainly a lot of room and some countries are already doing this within the context of their INDCs, pledges, targets, other things. There's a number of modalities to get to there in a national context. There's a whole lot we're doing in the United States side. We have been doing, we are doing, we will do, vehicle efficiency is a big one that we focused on, others have focused on that as well, rightfully so. The appliance efficiency area, basically anything inside of a building is an area that's underappreciated, but the GHG benefits are just enormous. We at the Department of Energy, EPA does some of this as well, have been very aggressive in terms of putting out standards that are both efficient, reduce GHG, but also do a cost effectively, especially over the lifetime. So that's something we're continuing, we're ramping that up even further from the US side of things. Hopefully other countries will do that in their own self-determined way in the structure of the agreement. I also think efficiency, appliance efficiency, and even broader is one of the areas that's particularly right for international collaboration, for sharing best practices, sharing best policies, and having this kind of thing accelerate all across the world. So it's not just Europe that's doing something at the US or China or India, we're sharing that expertise, we're sharing that knowledge. There's a number of things in the US that we're doing that is exactly aimed at that. We've got a number of bilateral programs with India, China, among others. We've got several multilateral partnerships. You mentioned the Clean Energy Ministerial, we've got an initiative there called C, the Super Efficient Appliance Initiative that is doing exactly this kind of collaboration among the largest countries of the world. We launched a new global lighting challenge, which is focused on lighting in particular, which is a very visible area of efficiency improvement, and we've got a literally visible, we've got a challenge now on the table as a world with China on board, India on board, the US on board, the European Commission on board, to race as quickly as we can to sell 10 billion high efficient, high quality lighting products as quickly as we can with countries putting in pledges and commitments about how to achieve that and to really accelerate that part of it. The G20's involved here, IPIC, which is an organization that's underappreciated a lot of times is another place where a lot of these efficiency improvements can be had. May I add something to link to the, again, the companies, because one of the things I want to do is that companies to, as much as I can, if I am right, to understand that these things will matter. According to our numbers, in the next 20 years, about one third of the global oil demand growth will come from the trucks in Asia only. And currently, the standards, the fuel efficiency standards is almost inexistent there. And both in Paris and the COP20, the truck efficiency standards are under discussion. And if they are implemented, it may well have an implication on the oil demand growth worldwide. And it is the very reason I am saying that we all have to, on the oil part, yes, but to follow what is going on. And efficiency is therefore a very important issue. Second, in the United States, we discussed the US is becoming, or going towards being independent in terms of oil imports and reliance on other countries. This is true, but this is mainly credit cause almost exclusively to the shale oil boom, which I think is a half of the story. The other half, because imports have two components. One is what you produce, the other one what you consume. The other half goes to the success in the improvement of the car and trucks efficiency in the United States. Consumption is going down and the production is going up as a result of that your imports are coming down. So therefore, the success story, it's a success story for the US, definitely we all appreciate everybody's envying United States in Europe and elsewhere. It's a very good success story, but it has two legs. One is the increasing the production. The other one is the decreasing the consumption through efficiency standards. Fadi, it sounds like you might be warning some folks of a new peak oil demand concept that we're seeing a lot of talk about. So, but I wanna stay on the company side for one moment and ask both of you. So you're explicitly asking oil and gas and fossil-based energy companies and renewable energy companies to be aware of what's happening within the climate negotiations, but there's a lot of discussion about asking them to lead within the context of those negotiations, right? So you're offering neighborly advice to the folks that are the formal negotiators do you have anything to offer by way of how companies should get involved in terms of what they're putting on the table in terms of overall pledges? And Dave, maybe you wanna talk a little bit about how you're thinking about how companies should be engaging in the talks themselves along those lines. Perhaps I can say two things. First of all, not to be misunderstood, we will still need a lot of investment in oil, a lot of investment in gas. Why? Because when we look at the next 20 years, if we need to three barrels of new production coming to the markets, one of them is related to demand growth, which is affected from the climate policy, but two of them is related to the depletion of the existing fields. So one has to replace the fields which are in decline. So we will still need oil companies to be there because we will still need for mobility, for everything oil companies to invest. So if anybody thinks that we don't need any more the oil and so on, it's completely wrong as well. So we should see the things, put things in the past. In terms of natural gas, I see a growing imports of natural gas under any climate policy because natural gas provides a very good alternative to coal and also provides a very good marriage to renewables in many cases. What I'm trying to say is that a denial of the climate policy and it will not affect my corporate strategy may well be on the risky side. This is the message that I wanted to give and perhaps I'm sure they will say more about this. So two thoughts on this. One, it's obvious to say but very important companies are real world actors, right? They're out there in the real world doing things all the time. Accordingly, they can have a huge impact if they decide at the corporate leadership level at the stakeholder level to make different policy decisions, make different directions, both in their near term and as Fatih stressed their long-term interest in terms of stranded assets and otherwise. There's also an important part here in that they're real world actors and so companies stepping up to the plate, putting out statements, putting out commitments, especially by the group of companies that's not the sort of vanguard, those companies you expect to say things that are forward leaning on climate policy, et cetera. And there's a terrific opportunity before Paris for a number of other companies out there to come out and put out statements, put out commitments. Not only important in the real world, but I think that impacts the broader debate around climate policy and where our country is going from the U.S. political perspective, but the world as well. They can have an enormous play because they are real world actors in terms of the debate that's going on and view these issues less ideologically and more pragmatically. The other thing I'd say is there are a lot of opportunities for companies to above and beyond what happens at a regulatory basis from country X, Y, and Z to step up to the plate in public-private partnerships. Fatih mentioned upstream oil and gas production, the methane emissions that come from that being one of the top five policies that could get us on this bridge, this peaking trajectory. There's a new partnership that we launched last year at the Climate Summit with seven companies, major companies, oil and gas companies to do exactly that, to commit to reducing their oil and gas methane emissions in the production, the upstream side, have some monitoring, the Environmental Defense Fund, among others is involved in this as well from the environmental integrity, hopefully more and more companies will join on to efforts like that and to frankly get ahead of the curve. I wanna mention other questions that I'd like to get the audience involved. So if you've got a question, please raise your hand, wait for the microphone, state your name and affiliation and then your question in the form of a question we'll start with Ambassador Koslerich, human threes because that helps us get through a little more quickly. Fatih's very good at answering them. Rich Koslerich from George Mason University, one source of energy you didn't mention was nuclear and I wonder where you see that fitting in. John Mayer's resources for the future. In your energy efficiency analysis, there are a whole bunch of ideas which are not economically attractive using a commercial interest rate. What, how did you sort out which were attractive economically versus not? Thanks, Michelle Melton, CSIS Energy Program. I really appreciate this and I did read the report, it's excellent. Thank you very much for all the clearly hard work that went into it. I'm really interested in the five solutions that you put forward. A lot of them are presumably going to be in the form of mandates and I was wondering what, if any modeling work IA has done on market based solutions, if you could just speak a little bit about that and where you see that fitting in here. Thank you. Let me start with a nuclear power. Why a, why I didn't mention nuclear is that the time period we are talking about is a very short period of time. So, where is the, if we decide on a nuclear power plant building today, if we take a long time that we see the production will come through. However, I believe nuclear can play a critical role, a very positive role in terms of reducing the CO2 emissions but we see some challenges today. Today there are seven to two nuclear power plants under construction and about half of them is in China and other half is the all other countries put together. And the main problem in my view is in Europe. Dave kindly mentioned that I was in Slovakia, I was in a meeting with all the European colleagues there. There is one question about Europe that I cannot solve. There are many but about energy one. This is the following. Current European electricity generation, 30% comes from coal and 30% comes from nuclear, 60%. And the current, the general European policies to say no to both of them. How are we in Europe going to replace them with what and when, that I don't know. And I think it's a very plain question and it is a very obvious question. What will be the implications of replacing them in terms of the economic growth, in terms of the reliance on other countries, in terms of CO2 emissions is an important question. How did we choose our efficiency policies? You are right, there are millions of efficiency policies but since we said that we pick up the ones which doesn't harm the economic growth, we have chosen the ones whose payback periods is less than five years. We put a limit. There are some efficiency policies which come very, very long time they will pay back. But this is the additional investments you make. There are two refrigerators. One is $10, the other one is $15 but $15 is more efficient. But in the beginning you pay a bit more but if it pays through the lower electricity bills in within five years of time, it is in our basket. So we look at the economic aspects of it. Your question is, again, very right. We talk more about the suggestions we have for parties is more on government mandates, government standards and putting there. We can reach them just during, as a result of government decrease, the presidential decrease and so on but you can go through that through different instruments such as the carbon price. It's another important measure to go through. It will depend on the countries. How are they going to fulfill that? And we have made, if you wish, we made a lot of simulation. What kind of carbon price is needed to reach those targets? But in my view, I can tell you the, Dave mentioned, highlighted some executives of the oil companies asking for a carbon price from Paris. In my view, I should be very careful, to get from Paris an internationally agreed carbon price would be a nice surprise. So I can put it this way. And I am sure that the CEOs know it much better than me, by the way. Okay. Dave, did you want to pick that idea? Just one thing, quick thing to add on the energy efficiency point. I think this is another area where there's some room for international collaboration. We're already trying to do a lot of that in order to get policies adopted at the end of the day through parliaments, accepted by publics, accepted by companies. You've got to do the cost benefit analysis. You've got to have the rigorous analysis that undergirds all of that. And we spend a lot of time in the clean energy ministerial and other contexts, sharing that expertise, sharing that knowledge, both appliance specific, but broader as well. And that's part of the collaboration space, I think that's particularly important going forward. Doug Hangle from the German Marshall Fund. I fought a few years back when the IEA put out a report about what it would take to keep to two degrees. In addition to nuclear, you also had a lot of carbon capture. So I'd appreciate a comment on that. And then on energy efficiency, there's this so-called rebound effect where, so you have a lot more efficient lighting, but then people just leave the lights on for longer or more of them on whatever. So how do you factor that into your calculations? Ariel Cohen, the Atlantic Council. Hi, Fatih, great to see you as always. Can you drill down a little bit on the intermittency of the renewables and what kind of investment do we need to see? Do the developing countries have the technical capacity as well as the financial resources to smarten their grid to go to more less intermittent renewable grid? The second question is about electric cars. You didn't talk much about them. What is the ideal system of incentives? Because the cars are still quite expensive. So Bolt quoted at $30,000 after 7,500 tax rebate. So it's a $37,500 car on the cheaper side. How do you go to the Chinese market, Indian market, to push for more electric cars? Thank you. Adam Siegel, Insight Through Analysis. IEA recently came out with a very good study on secondary tertiary benefits from things like efficiencies. How are you including that in your cost-benefit analysis in this policy arena? And also related to the efficiencies, while there are tremendous successes, reality is, for example, we look at Energy Star. There are many programs that took 15, 20, 30 years to actually get the regulatory in, yet these policies are talking about massive changes by 2020. Regulations frequently take a very long time. How are you accounting for that? So I start, I'm sure they will have things to say. Doug, thank you very much for your question. Yes, CCS is a very critical technology because if CCS was to be used in a significant manner, we have a lot of fossil fuels which are much cheaper than many others. We can make use of them. But the problem is, in the absence of CCS, they are expensive. And when we have CCS, when we have CCS, it brings the cost of electricity up substantially currently. And CCS, in my view, currently doesn't prove, as it stands now, a very attractive area to invest because of the uncertainties in terms of economics and the regulatory issues. The appetite for CCS is rather low. And if we want to see CCS, the important is not to see the CCS in Canada or in Belgium, in Norway, it should be in China or India where the bulk of the coal consumption is. Currently, unfortunately, I see the appetite for CCS in the absence of a carbon price or other regulatory measures to have a major share in the energy mixes, the chances are very slim. Even though, once again, a very critical, very important technology. Rebound effect, yes, you are completely right. If something becomes cheaper, we tend to use it more. But we have the end effect of the efficiency policies. Our numbers here do consider a certain part of rebound effect both in the electricity sector and lighting in the transportation sector. As a result of that, these numbers come out. Aria's question, it's also very nice to see Aria and we miss each other in Bratislava. Now, yes, renewables are intermittent. First of all, I should say something. When we talk about renewables, we automatically think of solar and wind. But in the developing world, about half of the renewables growth, if not higher, comes from hydropower. So this is, let's don't forget hydropower. It's an important part of renewables, which is a completely different issue and the intermittent discussion is a different one there. Yes, today the main problem is worldwide we are facing the integration of renewables in the electricity grids. And the implications in terms of the intermittency and also in addition to intermittency, there are some other implications in terms of the system stability as well. This is an additional cost to renewables and I think it is important to see an important backup to renewables and the systems are made much more stronger in order to, the electricity systems, in order to be compatible with the higher share of renewables. In the developing world today, when we talk about renewables, a big chunk of it is in decentralized systems. So it means in the locations which get directly the renewable electricity in their homes and in their buildings, but the share of renewables in the developing nations is not as big as in the developed nations, so it is now a risk for the system stability. With the growing share, it may well be a challenge. Smart grids, I don't think it is the top of the agenda of many developing countries, right or wrong today. Electric cars, I think my main concern what I see is the two main challenges for electric cars. The first, the cost of battery today, this is the main problem, it needs to come down, and the second, from a climate change point of view, what kind of electricity you use, the composition of the electricity, otherwise it may not be at the end of the day, not necessarily a good news for the climate change if you get 70% of your electricity from coal. So therefore these are the two challenges. Last question, and the co-benefits. In fact, to be honest with you, we look at your right, we look at the co-benefits of the climate policies, but the climate policies also benefit from the other environmental policies. Let me explain what I mean. When I mentioned that the China coal emissions went down for the first time, it is not, of course, Chinese government is very, very careful and taking a big responsibility to reduce the CO2 emissions, but the main driver of the coal decline was to address the local pollution in the cities. And the climate change was one of the beneficiaries of the local environmental problems. So it goes both ways. And to have an efficient system, in any case, is not a bad news for any country. It is good for the budget, it is good for the environment, both local emissions or CO2 emissions, and good for the energy security as well as you import less energy. I think these are some of the things that I would like to highlight, and I will pass it to Dave Pratt. Yeah, just two quick points. One on the CCS, it's something the U.S. government is, remains very focused on, including internationally, we've got some collaboration with China, in particular, where we're trying to do large-scale projects, drive down costs, deal with some of the challenges Fatih laid out. And then on the renewables grid issue, I think more and more policy makers, including the energy ministers that we work with, are focused on the grid part of it, especially as renewables numbers get higher and you deal with the intermittency problems and all the resilience and other things that you've got to deal with on the grid side. When our energy ministers came together in the Clean Energy Ministerial three weeks ago, 23 largest countries of the world, we had 15 of them who joined together in something called the Power Sector Challenge, which outlines eight principles of what our grids should look like in the future, and then what we need to do respectively to help each other achieve those objectives, to deal with the renewables penetration, but all the resilience and other efforts as well. So I think there's more and more focus in that area, especially as you try to think ahead not just a few years, but five, 10 years, et cetera. Well, we promised to get you out of here on time and we could spend all day talking about these things. So I'm gonna just thank Fatih and Dave for being here. Fatih, once again, we've said it before, but congratulations on your new role. We're very glad that you'll have good colleagues like Paul and Amos and Laszlo with you and always grateful to know that you'll be coming back again to do another installment of the WIO. So if we don't see you before then, we will see you in December. Thank you very much and please join me in thanking Fatih. Thank you.