 So we're here to have a lively discussion, stroke debate, of one of the most interesting and important issues affecting I think the world economy and the world because of the interaction of climate change with energy, probably the most central, in my view the most the central economic and civilizational challenge that we are now confronting. So I think this is a fantastically important discussion. Before I introduce the discussion and above all the participants and the issues we have got some questions which are up on one of which is on the screen and I hope that at least if you go to the place, the location that you're supposed to go to, wef.ch forward slash ask, you will get the other question. The questions are, you're going to be asked to answer those questions at the beginning and at the end because I want to see if the discussion has changed anybody's mind. So the first question is given regulatory and market changes now underway, should energy companies and investors be planning for a post fossil fuel future and you have a yes or a no? So you should, if you've got your devices you can go to and answer this question and the second question which I hope will be there but if it isn't, well so be it, is decarbonization of the fossil fuel industry possible and while you're all voting, so we get the baseline for this discussion, let me very very briefly indicate what I have, what I see is the issues we'll be discussing after I've introduced everybody. So I will go to my left, first on my immediate left is Tina Jomart-Peterson who is the Minister of Energy of South Africa, thank you for being here. To her left is Patrick Pouillonie who's Chairman, Chief Executive Officer and President of the Executive Committee, a lot of jobs, of total, of total, of course very well known. To his left is Cristiana Figueres who is Executive Secretary of the United Nations Framework Convention on Climate Change and of course played an enormous role in the COP 21 negotiations in Paris which were completed successfully to some people's surprise last December. To her left, based on evidence, but to her left is Kenneth Hirsch who is Founder and Chief Executive Officer of NGP Energy Capital Management from the United States and finally to his left is Enrique Ochoa-Rezer who's Chief Executive Officer of the Commission, I'm going to pronounce it terribly, I apologize, Federal Electricidad of Mexico and I think everybody can work out what that is. So we have a good representation of experts. Now where are we? Well first the world has committed itself to some remarkably ambitious climate targets with the aim in ideal circumstances of limiting the increase above pre-industrial air levels of temperature to no more than one and a half degrees centigrade which given what's already happened is a very ambitious target. Today, according to my very recent research, I think this must be roughly right, 87% of all energy, commercial energy consumed in the world comes from the fossil fuel industry so it remains overwhelmingly dominant and it seems to me as near certain as anything can possibly be that if you look at what's happening in the world that the demand for commercial energy is going to rise a lot because there are great many people around the world and there are people here from countries very much involved in this who will want more energy and of course emissions have been rising and continue to rise until very very recently last year seems to be a pause but basically been rising consistently while we've been talking about it. So the question for years we've talked about the decades and I've written many columns pointing out that actually it's as it were hot air so far. So the questions then are can we bend this curve? How can we bend this curve? And will we bend this curve? And what would all that mean for the fossil fuel industry? Should we sit here as a dinosaur or some of its assets are stranded now or is it part of the solution and if so how? Those seem to me the questions we are addressing. I hope we've got the answers to these questions that you have just given. Can you see can you see what those answers are? Okay. Oh well that's fascinating. This is I think a very carefully self-selected audience and so yes to the we should be planning for a post fossil fuel future 80% to 20% I don't think I've ever seen such a result in such an audience and the next question is that is interesting. So we think it's going to happen but we're not completely sure how so but the main implication that I would take it is that since you can't deeply decarbonize the fossil fuel industry given the skepticism that it's sort of over. That must be the implication I would take. Maybe I'm missing something. So that's a fascinating baseline. You'll all have an opportunity to vote again after you've heard the discussion. So I'm going to start now with Ken Hirsch. Each participant will have three minutes to set out their view but have a discussions among ourselves for maybe 15-20 minutes and then I'm going to go to the floor. You're going to ask questions and I might see how the first two examples go allow one or two sentences of comment but if we get speeches it'll stop immediately but it is a debate and it would be nice to see you know if somebody has a point I'm prepared to listen but only if you can make it in really two or three sentences. Okay Ken Hirsch. Okay to hit the point head on first as an investor which is my perspective has been investing in the oil and gas industry the whole value chain for about almost 30 years now. At the outset I'd also make the case that people in the fossil fuel industry aren't necessarily anti-climate okay. There is a responsible way to develop hydrocarbons and it's a balancing act because so much of the economic growth in the last century has been on the backs of cheap and reliable and plentiful energy. So now we want to add clean to it and that's going to be an ambitious target and so I'll speak from an investor standpoint. As you said Martin number one is that global energy demand will rise. Estimates from the sources even at Paris is between now and 2040 energy demand will increase about 35% globally and even though the percentage market share of the non-fossil fuel sources will increase in aggregate the fossil fuel oil gas and coal units of production will all increase even though the market share will go from the low 80s to the high 70% of demand hydrocarbons will still dominate being over 7 oil gas and coal still being over 70% almost 77% of total of total demand from an investor standpoint it's important for us to understand that all oil and gas decline every oil and gas well declines over time. So we don't have a luxury of thinking in terms of 50 years there are certain projects like the Canadian oil sands that have very very long projects measured in decades but our investment horizons our investors demand it it makes economic sense IRR calculations everything gears towards I'll call it a one to a 10-year time frame. So when I'm looking at data from now until the year 2040 and I'm seeing that oil demand will grow from 90 million barrels a day 92 million barrels a day today to over approximately 105 million barrels a day natural gas demand will go up 46 63% on a per unit basis and even coal tonnage will grow 2% okay over that time period that's 2% cumulative 2% cumulatively okay and so those are very important numbers they're slowing the rate of growth which is all important and that's what the that's what this this whole movement demands but it's not an either or situation and if we make it an either or situation the reinvestment dollars that we need to sustain oil and natural gas production to keep electricity flowing to keep transportation moving and those are two separate markets and they're not interchangeable that's very very critical and so if the baby gets thrown out with the bathwater and we stop investing then we're gonna have massive decline rates shortages unreliable power super high prices and remember high energy prices one of the most regressive taxes you can put on a population so I believe that we we have to do both but we can't do it we can't not increase the investment in fossil fuels simply because aggregate demand is grown okay that's a very clear statement thank you very very much the fossil fuel industry definitely has a future and the future is now as it were you have to invest now that is I think the core so if I may pass now to you minister how do you see this situation from your point of view thank you very much moderator excellencies and participants I happen to be the minister of energy in South Africa it's a very difficult position to be in right now we have the highest genicoefficient one of the highest in the world we have the highest level of inequality three million people in South Africa do not have access to modern electricity 90% of our energy comes from coal we have made commitments our ever at cop 15 to reduce our carbon footprint the past two to three years we've embarked on a very ambitious renewable energy program where we've bought brought investors on board foreign direct investors most of the investment actually also comes from within South Africa but the partnership which we developed to the private sector has been phenomenal so for now we've brought about 6000 megawatts of hydro electricity wind solar PV and I think it's going very well 2000 megawatts have been committed and already connected to the grid I've just announced a further 6000 megawatts for renewable energy last year and we'll do another 6000 megawatts of renewable energy in last year 2015 6000 this year 2016 another 6000 extremely ambitious but it is the most successful investment program the investor confidence in the program is very good we do realize that our reliance on coal will peak until that our profile of the use of coal will pick up until 2020 from 2020 will reach a plateau and until 2030 and then with the renewable energy programs coming on board quite aggressively will be the dependence on coal will decline from 2030 so we I think we do have a number of challenges we speaking of the fourth industrial revolution I think many of South Africans are still stuck in the second industrial revolution where we need access to electricity let alone access to technology and I think that the backlogs that we do face we are attempting to address the challenges I also have is the interconnectivity in the African continent we do not function as an isolated structure the our neighbors Mozambique immediate neighbors are dependent on us for energy so my work is also in the southern African Papu right to the Democratic Republic of Congo where I do the grand anger I think you indicated very clearly minister both the immense challenges that the country like your face is given how the difficulty of phasing out coal and the significance of what you're trying to do I think it brings out the dilemmas very very clearly and I suppose it is absolutely correct you are in many of your people are still not really in the second industrial revolution and so that then leads me to Enrique thank you Martin for Mexico's energy reform is promoting a win-win solution we have to promote electricity infrastructure that it's low in cost and that it's low in emissions and in order to do so we're approaching it in two ways first we're going to increase our capacity to produce electricity through renewables right now in Mexico 26% of our electricity comes out from renewable technology by 2024 we're promoting investments from now till then so that we can increase it to 35% of our mix on the other hand we have to acknowledge that fossil fuels are different in their cost and are different in their CO2 emissions in Mexico we used to produce electricity in an important way with fuel oil which is costly and highly pollutant so one of our alternatives is to switch that into natural gas so we're promoting investments for new natural gas pipelines we're promoting new combined cycle plant to use natural gas with top technology and to do so we are attracting investments over 11 billion dollars we will be promoting tender processes this year for additional 15 billion dollars of investment private sector national and international this energy reform will allow us to achieve two objectives one to lower our emissions of CO2 and second to lower the tariffs an industrial commercial and domestic level of electricity we have done so in this 2015 that just ended we have in comparison to 2012 reduced fuel oil consumption in the electricity sector by 45% between 2012 and 2015 industrial tariffs have gone down between 30 and 40% and actually an important thing for us is that in comparison with the US our industrial electricity tariffs which were 84% higher in 2012 were now in October of 2015 only 13% higher our aim is to continue downsizing that reach between the industrial tariffs in electricity between the US and Mexico so that we can become more attractive for productive investments thirdly we need to decarbonize our budget our national budget president peña Nieto's fiscal reform aims at that we depended in our national budget at 39% from oil resources now we do it at 19% after peña Nieto's fiscal reform so at the end it's a three level change first energy reform that allows us to produce more electricity renewables second to swift from fuel oil to natural gas and third a fiscal reform that allows us to depend less in oil resources for our national budget thank you very much it's an interesting overview and we'll come to implications very soon if I may ask Patrick Pwene yeah I feel guilty yeah no I am the full-size fuel representative no to answer to the question I would have answered yes to your first question maybe could surprise you Martin yes but it will not happen overnight there will be no big bang we have to be realistic the transition towards low-carbon energy mix will take time I would like to stress three points is at three minutes first one is that remember that the mission that we have as energy companies is first to satisfy the growing energy demand of the world in an always safer cleaner and affordable manner and that put the question back to energy efficiency and the second is to contribute to the fight against climate change because this event in Paris is a huge event all the countries of the world recognize there is an issue and so we must take that as a must for all of us including for myself as chairman of CEO and gas company when I look to the future maybe I cannot plan for 2100 sorry Christina I try to embark my company looking to 2040 which is a little far but 20 years what will be total in 20 years and what I put on the table everybody in companies okay looks let's look to what is a scenario of the international agency compatible with two degrees I have to have a strategic compatible with two degrees it has been decided in Paris what I observe is that first the demand should always only increase by 10% 12 exactly only 10% compared to a natural scenario the business as you know scenario which is an increase of demand of 50% so the first huge challenge for all of us is energy efficiency keep that in mind the second is what is the energy mix in 2040 renewables are there solar and wind for 10% it's 1% today 10% so there is clearly a growing markets but it will be 10% first high fuels are there as well but only for 60% compared to the 87 I am in the two degree scenario which is aggressive I don't know if we can reach it but we I take that as a basis and there you have coal diminishing all is declining compared to today compared to 2020 which is a peak and gas is growing in 2040 so that's the image that I take on on the table in front of that first I would like to stress second point that we don't have all the technical solutions today to come to such an a carbon energy mix innovation is absolutely a business if we are serious about it we need a tremendous amount of innovation for example in renewable technologies there is still a lot of things to do to make them more competitive I know that we are all today enthusiastic about it we are big solar investor there is still a lot of things to do if you want to be competitive in particular at the price of forty dollars above it's not a good news I can't tell you the second field of innovation energy storage because if you want really to get rid of fossil fuels you need a huge increase a huge innovation energy storage capacities and it's difficult third example is carbon capture utilization and I insist on utilization and storage because if we want to be net CO2 emitter in 2050 there will be fossil fuels produced but we want that to net it and I insist as well as on utilization because we speak a lot about storage we see the limit of that utilization maybe is a field where we could innovate with chemistry chemical companies what can we do this CO2 can capture it can we do something with that so innovation and then of course for companies like mine and my colleagues let me clear we are our products are responsible or partly responsible of climate change but I'm fully convinced we are part of the solutions we are in the energy fields we understand these topics we have engineering we have the financial capabilities I would also remember to investors that the private only gas companies represent only 30 to 40% of the market so there is room for investing in private only gas companies because 60% to 70% markets are national companies remember that and oh what is my my strategy it's quite easy you will have a lot less oil so I have to invest in assets which are competitive whatever the price of all will be so it's a may curve approach which is the only good approach by the way when you are in commodity business so investing today in all assets which will be I I in the course may curve is probably not the right strategy this why I begin to diverse of some of them last year second you need to promote gas there is grass with grow so gas is clearly for me the transition energy remember 300 years ago it was the wood when we go to coal when we go to all we will go to gas and we knew it was all that is a transition so I'm not afraid about stranded assets by the way I'm not afraid you know Shayamani told one day it was not the end of the Stone Age because there is a lack of stones there are coal we will not develop all the coal on earth we'll not develop all the oil of coal of earth for example for me it makes very little sense to invest today in R&D and I don't want to make a mistake he's not shallow it's oil shell oil shell I think in English because this is stranded for me we'll not we don't need this type of thing so and then natural gas and then we knew it was because it's a growing market so of course it's a diversification it's not because I am in rolling gas but I am I have I know what is solar industry but we have to be serious about it it's part of the evolution of the energy mix so I want my ambition is total to be a still a leader in 2040 so I need to to make a strategy in the wave of this energy mix transition this is what I will say that raises lots of fascinating questions which we will discuss in a minute Cristiana well there are many surprises today right the first surprise was how the audience respond second surprise is that Patrick your response to the first question and the third surprise is that I actually coincide with much of what Patrick has said so there maybe we spend too much time together so three points on from my side not you know not not surprisingly technology regulation and finance from the technology point of view I just want to carve that out into what I would call three sectors the first is technology for electricity right because that is completely different and I would say there it is really astonishing how renewables are coming down and outpricing some of the very very carbon intensive fossil fuels and you know the last prices that I heard three cents kilowatt hour for wind in Morocco three cents kilowatt hour for solar in Nevada I mean you know what more is possible so you know very very very important the outpricing for energy second sector that I would put in and that is for grid connected second sector very important is renewable energies for access to energy very important in our half of the world in the developing world because we do have 1.3 billion people without electricity and the versatility in the diversity of renewables does seem to be much more appropriate for that kind of market and the third sector has to do with transportation and that is the the the competition there to to oil and I would say you know that's probably the one that has least momentum right now however there are three factors that are affecting the future of the mobility industry one is certainly what I would call the uberization or the shared economy the second is the tendency toward electric vehicles and the third is the tendency so it's self-driving all of those coming at the same time and I would say probably putting putting a pressure down on the demand for for oil so all in all I would say big picture from the technology perspective a very interesting future for for renewables secondly regulation well Paris a very very clear example of international regulatory framework that many held to be completely impossible some even just 12 months ago but you know miracles do occur and I'm always in the market for miracles so we hear we have the Paris miracle we do have a very very serious regulatory framework that is going to be in effect not just now it's not a flavor of the month it actually is designed to be in effect in effect for several decades and increasingly so because that is the international regulation but it will demand that national regulation keeps pace and in fact increases in its in its aspiration to continue to decarbonize the economy every five-year period so increasing pressure on that so on regulation both international and national and my third point why I think that renewables are actually currently underestimated Ken in your in your numbers is the financial risk I hear what you said but I also hear Mark Carney I also hear the financial stability board I also hear the G20 saying tell us what the risk is and Mark Carney coming out governor of the Bank of England not you know not not exactly a Greenpeace member coming out quite clearly and saying wake up because this can be the most disastrous systemic risk that we are facing and we don't want to get to what he calls the jump to distress so you know I think the financial markets are beginning to to understand that so my conclusion Martin is that we are very much in a transition I would say that we're looking at if I had a crystal ball I would say that we're looking at a transition period of X number of years in which there's going to be a coexistence in particular of the two dominance I would say gas and renewables and that coexistence hopefully helping each other out not coexisting in silo to each other and how that would would be done I leave to Patrick because that's your your bailiwick and not mine but you can you understand the picture and finally let me just say this I am very very concerned about the decarbonization notice Patrick also reacted to you know are we going to get to deep decarbonization is it not the moment as I just said a few hours ago to begin to change our language this is not about decarbonizing this is about increasing the carbon efficiency of the global economy that is the that is the the task that we have ahead and that then begins to point toward the solution for example energy efficiency needs to be there for example the very very intensive carbon fuels need to disappear and are disappearing but those are the kinds of tendencies that you then actually incentivize if we begin to think about the fact that what we're doing is improving the carbon efficiency of the economy and that we will have to extract out of every ton of CO2 that we will emit we will have to extract much more value GDP okay let's ask let's follow up there's lots of differences which we will now try and tease out I'm quite interested I may have not heard it but I don't think I heard the word nuclear and I thought that was that's quite interesting so I'm going to if I may ask you first as you come from the country that is probably was it in there was it I mean I mean it's not in my solution but I think you think do people think that in that if we are such a grand get a plausible future in which we might be able to reduce massively the role of fossil fuels do the members of the panel think nuclear plays a large role or not it will increase it will increase it's again a year by 3% but there is a limitation to nuclear I think which is a security of nuclear security and so there is a place but marginal but in it cannot be the solution it's part of the mix I'm I will not invest because it's a specific industry and I cannot do everything but I think there is a room for that but it's raised many questions in particular of security of the whole system so I'm but yes there's a room for that for sure does anyone else want to comment specifically on the role of nuclear in this new future though you that you'll get your chance later we that the moment we start with the panel if I may just for a little bit longer I'd like to follow up with what you said because I want to tease out the implications of some because I to get the differences clearer I the way I read what you're saying is really and truly given the technologies we now have okay we might have innovations into some completely new future which make renewables workers base load and all the rest of it given the demands we are going despite the fossil fuel shifting that is going on we are going to end up under any plausible assumptions with rising emissions and and that's necessary if we're going to meet the world demand for energy is that what you're saying yeah I think that the people miss they don't appreciate the scale the energy industry globally over the last hundred years the world has invested over sixty trillion dollars and took a hundred years to get where we are today we can start on trying to find that next generation that leapfrog but I think getting distracted on small little things which are important locally the distributed power and flexibility in the emerging markets to connect people and give them electrification which is the one of the single most valuable things you can do for economic development is to electrify a part of the world or part of the community and I think we have to go after the big stuff and the big stuff is oil natural gas and coal and so are we going after that in the developed world where we're going to have two times the number of cars on the road we might have three times in sort of percentage market share the number of hybrids and electric vehicles from five percent today to fifteen percent but there's going to be two times the building developing world in the total world the total will be a billion more cars and trucks on the road in the United States there's two hundred and fifty million cars and trucks on the road if you took fifteen percent of the cars off the road and made them natural gas natural gas demand in the United States would go up ten percent and the price of natural gas would skyrocket and oil demand would drop and so the price of a gallon gasoline would drop even further there's been a traumatic demand response and in the United States alone in one year we've increased our driving by four percent okay four percent in one year is about a half a million barrels a day and it's happened if you give Americans an extra dollar a gallon we know exactly what to do with it we buy we buy an SUV and we go out to dinner okay and the top three selling cars in the United States are trucks and the average miles per gallon of the new fleet of cars has gone down despite all of the of the emotional attachment to renewables and there has been truly emotional attachment that this is this is something we need to get on with but at the end of the day cost matters so that's that's that's what I can't get over so they so Christiana basically what they're saying here is yeah we the governments of the world in beautiful Paris under pressure signed up to all sorts of stuff but it they didn't really mean it and the and in fact one of the best where indicators of that they that they didn't mean it which in fact I pointed out is they haven't done anything to increase taxes as oil prices have collapsed or maybe one or two I bet most countries haven't so effectively to consumers all prices have collapsed and this is going to lead to precisely the disastrous consequence from our point of view so it's actually actually far from the fossil fuel industry disappearing it's it's going to expand and world population going from seven to nine so how would you want to be interested I think actually and even more aggressive criticism to governments is well then if you're really serious why don't we have carbon price right I think that would be you know just to take your point one step farther it's just it's just window dressing well I would say that probably isn't and there are two governments sitting here I'm gonna come you know two governments sitting here who I really you know would would question whether one would say to the government as well you know was it just fun that you were having in Paris or was this serious and are you really willing to submit yourself to the scrutiny and the accountability of every five years coming to the world back and saying here's what I did did I progress or am I regressing and I'm not saying Martin this is going to be a straight line right I'm not saying that at all because economies change because conditions change so this is probably going to be you know like like the temperature that it goes up and down and out but there is a very clear tendency okay there's a very clear tendency here toward increasing the carbon efficiency of the economy it is not going to be straight in any country specifically and it is not going to be straight globally but the tendency it's a little bit you know like the difference between not being able to differentiate between ebb and flow and the undertow the other the current let's look at the current I'm absolutely clear that there's going to be ebb and flow minister you wanted to respond to this question I absolutely agree that we're not going to be able to do renewable energies as the main energy provision for our energy mix and that is why we have carefully agree with you that we need an energy mix we are one of the countries which also decided that part of the energy mix will be nuclear energy particularly because of our water scarcity you've seen that we've as we are having a serious drought in our country we need gas and nuclear for desalination not just for energy but we know that right up to 2020 even to 2030 our dependence and reliance on hydrocarbon is going to increase and we will only be able to plateau out after about 2030 round about this our time frames are more or less the same but for us it's about access to energy access to electrification not only in South Africa but in the rest of the African continent our agenda 2063 where the AU is about integration and ensuring that there is industrialization in the African continent and we cannot do that without renewables the Sun is a resource which we have it's a resource which is and they of course we don't have the storage capacity but we do believe that that technology will be available shortly and yes absolutely Mexico will definitely accomplish its compromises to reduce CO2 emissions and we have been working for that even before Paris was signed and we started working for that with President Peña neto's energy reform by substituting fuel that is highly pollutant like fuel oil which is 68% more pollutant than natural gas when you transform it into electricity and by doing so I was mentioning before that we have reduced 45% our use of fuel oil in three years that has been equal to reducing 42% of our CO2 emissions in the app in the power sector so we're moving towards that goal in the energy sector all together my colleague Emilio Losoya from Pemex is doing the same thing in its refineries and petrochemicals he's drifting from fuel oil to natural gas now that's a contribution in the other end of our contribution and commitment is to increase our renewables and by renewables it's not only wind and solar it's also hydropower plants and your terminal plants one part of the energy reform is to increase our production of your terminal energy by establishing 13 new fields and on the other hand we will continue increasing our capacity to produce hydropower through hydropower plants we discussed about storage and one of the important elements of storage is not only batteries but it's also the way we use our hydropower plants in Spain elsewhere in Europe you have reversible hydropower plants you use them when the prices of electricity are low to bring water up back to the dam and then when the prices of electricity are back up you use it again so you establish different mechanisms to promote and use better your natural resources so I believe that the mix is there nuclear energy obviously there are countries like France that have 50% of their power mix with nuclear other countries like Mexico have only 2% so they're different solutions and they're different technical solutions to different problems and I believe that a fair mix of energy shall include nuclear and it shall be established with the highest standards of security and efficiency. Can I just follow one question with you and then I know you want to make a comment I mean what I'm hearing here if one takes sort of optimistic view that we're going to get somewhere with this with the results of Paris is that there is going to be a fossil fuel future and indeed it's consistent with your own argument but it's increasingly a natural gas future so that raises the question that Ken raised which is the economics of gases against other fuels and what we do to indicate to bring about this shift is do you see your company is essentially a gas company by 2040 do you think that's what the fossil fuel industry will really be by that time and we'll call have largely gone we'll have more gas than oil I think you know just because the market of gas market will grow and because your market will diminish so it's just a market story but there are conditions and I fully agree with what was said and by you answer let me clear if we do nothing in terms of carbon pricing we will have plenty of coal that's the reality that the economical reality India will develop coal South Africa if you have don't have the right signal in the market but you put in the price of energy the cost of the climate pollution if I can see you too there is no way and this is a real question for the global economy because it has a cost and the energy is one of the key factor for the future growth of the world so this where you are right is a question of all that is a question of one of the world we use is affordable and people want affordable energy and we are designing a world where the energy could be more costly which raises a lot of questions enough of energy growth and in particular vis-à-vis emerging countries by the way you know if I answered you as CEO and chairman of total to your question nuclear as citizen I think if we are all serious about it for India the solution if you want India not to develop its coal resource is nuclear but who will pay the nuclear for India where is it it's not so long I praise I write I admire my minister Modi with solar plan but it's not enough because you have a 1.5 billion people who don't have access to energy solar could be done and we have we have a program we develop a program of local solar lamp that we distribute in Africa in particular because we have it but all that of all that is linked is totally linked these energy are linked we cannot become disconnect so we will have fossil fuels and we will have renewables we cannot play once against the other this clear that we need to get through we is a fossil fuels which has a low highest emission is cool it's a fact but we need to find a solution to step by step exit that carbon pricing is one of them I'm going to go to the floor now I'm going to take three or four comments about questions if you have possible questions you have a burning comment which you can do in two sentences you don't need to justify you just make your point and then I'll see if we should go back to the panel so we have an interaction between the others to send you I've got this is a strange position I mean with people behind me so and I don't haven't yet evolved eyes in the back of my head so I'll do my best so is there a microphone or so we'll start here question and or incredibly brief comment say who you are large users on I'm the chair of the forums council on decarbonizing energy and you're the guilty party well have the party with the solution so and but I will make a brief comment on that I believe truly believe that the route to our solution of this problem is electricity we need to decarbonize electricity as soon as possible and in order to do that we need decarbonized base load power and nuclear was mentioned before I totally agree with Patrick if you address it to the generation three the present generation or even the generation three plus but the next generation the generation four is a totally different I would say that has the potential to be a real game changer and that can be available commercially in 10 years from now if we want it to be and that we put in our in our in in our work in the council I would also like like to say the other alternatives I think you've exhausted your yeah I the other alternatives is actually using cc us or you can I also use sustainable biomass to get base load power I have of course a lot of other things I'm sure you do but unfortunately for some reason they didn't put you on the panel gentlemen here please could you bring the microphone please to this gentleman and please say who you are Khaled al-Raza from Saudi Arabia I just would like to remind everybody the objective is to reduce carbon emission and we have not addressed the biggest issue behind carbon emission which is deforestation deforestation accounts for more carbon print than car airplanes boats train everything you can think of in the transportation so I'd like to thank you very good point I'll take one more comment or question lady here please yes ideal suited students right next to the microphone please go ahead thank you very much and I'm James Burst and I run the climate and environment department at the national physics lab and I just wanted to build on the comments around carbon pricing and specifically asked Mr Hirsh here does your model that you use for investments include any carbon price if not how would you justify that given that there's emissions trading schemes in countries representing more than 50 percent of global emissions and carbon taxes in many other countries as well and at what point do you think the carbon price would need to be reached in order to change the IRR for your projects that's it I'll take one final question the gentleman behind there then I'll go to some other quadrant of the room please thank you my name is John Mark I'm chair of the future electricity I have a specific question I also am a regulator by background and training and the specific question relates to how much the present low prices of oil will affect the growth of renewable energy in the immediate future and potentially depending on the state of the oil market in the future so we've got some very good comments questions there's a question directly to you Ken so I'll start with that um do you allow for a carbon price a possible carbon price in your projects and what would it what would it have to be to really shift what you do so it's a very good question and one of the one of the the investment markets are responsive so today one of the biggest problems globally is that carbon is treated unevenly around the world and inefficiently around the world and in some places it's not and so as as takers that would be a tax and so we we look at tax rates wherever we're investing and so that would be a tax and if it's there we factored in if it's not there we don't we make what if it might be if it might be there we actually in a 10-year horizon we would look at some sorts of some sort of sensitivity on it but in the present value equation something that happens in year 10 really gets drowned out in this time frame I I want to emphasize something it's really that I view is sort of a little bit of an inconsistency in the way we approach things I totally agree that natural gas is the single bridge that can take market share from coal okay we're talking about electricity so it's not about oil okay so today's low price of oil doesn't really matter because electricity is what generates the co2 primarily and the big the big base load power is coal and so the only real viable thing we could do today would be natural gas and one of the principles coming out of Paris was we need to peak emissions as soon as possible okay so I would go for the low hanging fruit immediately so my question is the IEA estimates Paris to get the INDCs approved or through would cost 13 trillion dollars and as you wrote about martin this week the emerging market capital flight is going to make a lot of this money unavailable okay for one trillion dollars in about 10 years we could we could replace all of chinese coal with natural gas fired power plants and it would cost a trillion dollars okay it'd be the biggest trade finance deal done between the Siemens and GE and whoever else wanted to get involved okay and for one trillion dollars we could do it and then we could leapfrog once that's taken care of and you could eliminate 20% of co2 emissions right there and china would love it they'd be the biggest trade deal for that we could announce now that would that is a that is actual math now but getting 196 countries together is important I think for the next 50 years or 75 years but right now about seven countries matter okay and those seven countries produce 70% of the emissions and and the lowest hanging fruit is chinese coal american coal is already going down significantly because of natural gas natural gas and from texas is fueling mexico's gas development so we like the market I get the point and I wanted does anybody want to come back on nuclear at all or just wanted to maybe transfer to you we made a lot of studies on that at 30 to 40 dollar per ton you change the picture very efficiently you don't need more than that at 30 40 dollar per ton you you have a lot of mechanism first of all gas become competitive against coal in many scenarios and it's a level where you begin to really have an influence on innovation because it costs and people today when they speak about 100 dollar per ton they're wrong it's just a static view of technology of the capacity if we mobilize innovation 30 40 dollar per ton it's largely enough so it's not a huge amount when you impact of cost of energy we people are afraid by carbon price in this place immediately we see if we want to store carbon we need 100 dollar per ton it's wrong it's a static view and in this world we are creative we have innovation and we demonstrated that in the energy field with shallow with shell gas shell gas was not existing mr. earth tells you we have a solution in the u.s. today but 10 years ago we have no solution so technology is a key and again don't afraid people about carbon pricing by raising big figures it it will be dynamic and it will solve the problem can I go to deforestation which I do think is an important issue christiana would you like to comment on well there that there is a huge challenge which we're really not addressing at all there's two comments to that first that it is 20 percent of the emissions and so it needs to to be managed and paris covers it the other piece that is very often underlooked overlooked is that the way paris is looking at climate neutrality is it is looking at both sides of the ledger it is looking at re-establishing an ecological balance between the emissions that we will have to to put out and the absorptive capacity of the planet so we have actually two levers in our hands right we can bring down emissions and we absolutely must increase the natural capacity of the earth in addition to cc us technologies that is not the natural capacities the man-made capacity but the natural capacity is also at our hand and can also be used does anybody want to come in further on what the current low prices of oil are likely to do and the way people are responding how serious because it's obvious it's going to be okay go ahead the answer is obvious it's very detrimental for any policy let's be clear i i hear since last six months but they will no impact it has an impact you know people are rationally economically it's they're acting the investors are people were economically rational so today at $30 per bowl sorry but i am a big investor in solar and i was advocating that there are 20 countries in the world where we could make solar profitable today it's not true today at $30 per bowl there is not a single one sorry and and so this has an influence including on energy efficiency you mean we made huge efforts in the last 10 years in energy efficiency because the energy was expensive at $100 per bowl so this is connected you cannot avoid it can i come in on a counterpoint with that because is it not true patrick however that at the same time this low price is actually taking out very very expensive and difficult to reach oil and gas off the table so you're taking off you know arctic drilling you're taking off deep water you're taking out sour gas you're taking out all of the very much more expensive categories of you're taking them off the table or at least delaying them so i think it's working on both sides is it not i think it's it's not the price we take off it's just what my remark about merit merit curve cost merit curve for me total has never a thing that it was a good idea to drill in arctic because it cannot be profitable whatever it's the cost is so high but it is stranded but it's not linked to be $30 a bowl it's just that when you need to spend 500 million dollars to do it one well let it it's better to leave it in the ground leave it in the ground and use your money more efficiently we are there to be efficient economically but we're whatever else low oil prices are reducing wasting and efficiency we seem to agree on that and if all your prices are going down well natural prices are going down and if you compare it with carbon then you have two sources of electricity that are low priced one is highly contaminated one is less contaminated so then you have a choice to switch from carbon to natural gas or from fuel oil to natural gas so it affects the switching but it also affects the energy intensity overall exactly and on the other hand direction if we see renewables only a solar and wind we're missing i think other elements of renewable energy that are very helpful for different countries hydro power plants in norway brasil colombia or mexico are very relevant and they are still very competitive even with low prices of oil or natural gas in other hand geothermal resources are also very important and they're affordable okay i'm going to unless you want to come in do you want to come in now i'd like to take it just two or three more questions but if you wanted to respond i'm welcome to the light i think that for us in developing countries on the entire african low fuel prices have unintended consequences but they also have a positive impact on our economies so countries like nigeria um gana they're facing huge problems with the the fiscus and whereas it worked the low fuel prices work for us not if you're in nigeria no for south africa of course i'll take three more questions if i can if you're unbelievably short about the questions does anybody else or comment i sorry i couldn't see in stark neck yes please stand up so the mic yeah the mic mic will get to you and please be very brief because you're running out my name is paul right i'm a director of the climate institute an energy institute of the university of california berkeley every day i work on battery storage technology with a very large group of people my colleagues nearby work on the catalysts for carbon capture utilization of storage i know these technologies well the ramping of those technologies measured over time is much less than we would prefer as scientists we try and do our best but it's a very complicated technology i would just like to get the panel's comments on that comment and urge them not to clutch at those two things like carbon capture and storage and battery storage is the big opportunity in the future they're there in the future but the ramping is slower and i'd like the committee to comment on that thank you very much another comment or question anybody exhausted yet the gentleman at the back there please stand up so they can find you and say who you are hi i'm marco dunand from acura a very simple question since the paris agreements are you are you the panel aware of what happened to carbon prices okay if you don't it went from eight dollars to six dollars so obviously the market doesn't believe in the agreement that that we have to try to work on that to make sure that the correct pricing of carbon sort of comes into the equation okay um i think i'll have to one more perhaps one more um i'm going to be very it's anybody else no you no no you i don't think that's fair uh anybody else is there anybody else who wants to ask a question okay then i will give you one more but it really brief we know who you are now so you don't need to say thank you um so assuming that we're going to do this vote again at the end i just wanted to give patrick the opportunity to change people's minds about that second question and talk a little bit about the work that the weft oil and gas climate initiative is doing on future of methane i did not understand the second future is a methane the question the question i did not understand it the decarbonizing possible carbon there and i hate the word decarbonizing i never use it first first time it's a wrong world i feel it's a wrong way i cannot use that no i'm a carbon industry so i cannot use that word you force me to use it uh methane methane yes it's uh it's one of the big topic on which we need to work i think we can work on that by technology so it's very high on the agenda i can tell you we have created a club by the way we had a lunch in davos today with 10 CEOs of rolling gas companies dedicated to climate change and this story about methane technologies of can methane technology methane is very high on top of the agenda is even the first topic to tackle because there we think but it's on our hand it's our technology that we manage so we need to address it and we need to target and in total we are thinking to have a target of emission less than 0.5 percent so very very minimum and we think it's quite not far from being reachable can i 10 seconds to anybody who wants to reply depressing comments on the future of carbon capture and storage and battery storage anybody wants to respond to that very quickly the 13 trillion dollars to do all of the things that paris laid out in my opinion is so excessive for countries and companies that don't have that kind of capital take the low-hanging fruit do it for less money and invest the extra money in the leapfrog technologies that can take big market share at a moment's notice the small little changes i would say to the countries in sub-saharan africa they could whatever is convenient whatever is cheapest go do that because millions of people are dying because they're heating and cooking with dung and they need to electrify okay whatever it is go do it it won't matter to the climate let's tackle the u.s. coal business the chinese coal business the big big movers christiana and your price of carbon has fallen from eight dollars to six dollars i don't know which emissions system that is but that doesn't matter to me uh so the market doesn't believe in your agreement well i i think you know the last word yeah carbon marks have been sort of an up and down and and very much still a work in progress i i don't think that that the price in carbon was actually reflection of paris it's been a very much of a seesaw and i think again you have to take the the long-term view and it's not the price that kind of a price on carbon out of those few jurisdictions that are currently putting out of public it's actually the much deeper price on carbon that that is we will be seeing soon for example coming out of china and then out of all of the other jurisdictions okay we're now going to vote again uh thinking very carefully about what's been said and what it implies so the first question is given regulatory and market changes should energy companies of vistas be planning given think about planning horizons for a post fossil fuel future that's the first question and the second question which we have just been told is not a question is but i thought carbon capture and storage is supposed to do this but we're not going to get into that debate uh now uh is deep decarbonization of the fossil fuel industry possible obviously one answer is it's inconceivable so you those are your questions and let's see what where we are now i think we were 80 80 20 and 57 43 and the 42 42 42 48 we lost one okay well that's i still think that you're ludicrously over optimistic i'm sorry but that's okay so uh so they there has been a modest shift in the direction of maybe this isn't going to happen but the general view still remains overwhelmingly that the fossil fuel industry uh in the longer term doesn't have a future uh that's uh i thought think quite amazing in in davos i think if we had did this 10 years ago the results will have been very very different it may be because we're all collectively mad but it's a very interesting result i'm not going to summarize the discussion except i think the lesson today is this is all going to be very economically technologically commercially and politically difficult and anybody who doesn't haven't got that really in their minds hasn't been thinking about the problem that's all i want to say and thank you very much for attending thank you very much