00:00A look at the oil price. It shows that Brent crude is trading currently just under $110 a barrel.
00:06Now, a new report says the Hormuz crisis makes the case for clean energy.
00:11The Energy Transitions Commission says renewables can prevent the energy price shocks
00:15that we've seen since the conflict began at the end of February.
00:18And I'm joined now by Adair Turner, who's the co-chair of the ETC that produced that report.
00:24Thank you so much for your time.
00:25Essentially, the Iran Energy Security Report sets out the business case for why clean energy makes sense.
00:32Talk us through the main points of that.
00:36Well, if you look at this crisis, Mr. Fatih Birol of the International Energy Agency
00:42has pointed out that in volume terms, it is actually a much bigger hit to global oil and gas supplies
00:51than, for instance, the Arab oil embargo of 1973.
00:55But we are not yet seeing anything like the economic impact that we saw at that time.
01:03And that partly reflects the fact that we now have alternatives.
01:08We don't need to drive petrol cars. We can drive electric vehicles.
01:12Now, let's be clear. There is a big hit economically going on.
01:17There are very big increases in gasoline prices in the U.S.
01:21And there is a very, very big hit on vulnerable low-income countries in Asia are feeling very, very affected
01:29by it.
01:30But the good news is that we now have an alternative.
01:34It will take us time to develop.
01:36But the incentive to develop the alternative, which is a deeply electrified economy,
01:42getting its electricity almost entirely from renewables and nuclear, that is available.
01:48And what is really interesting is that we are already seeing market developments which are taking us in that direction
01:55as markets respond to the realization that relying on fossil fuels creates a vulnerability.
02:03We are, for instance, seeing very big increases over the last few months in Chinese solar PV exports
02:10imports, exports and imports by countries as varied as India, Ethiopia, Kenya.
02:17We are seeing in India the government encouraging the development of electrification
02:23and Prime Minister Modi saying we have got to head in the direction of electrification
02:29to escape from this reliance on fossil fuel imports, which creates a vulnerability for our economy.
02:37OK, so how do we accelerate the transition to clean energy, given currently three-quarters of the world's population
02:43still relies heavily on oil and gas imports?
02:48Well, three-quarters of the world's population relies on oil and gas imports because oil and gas is not equally
02:55distributed
02:56across the world.
02:58It's incredibly unequally distributed, it's located in particular environments.
03:03So an oil and gas economy will always be one where we need huge international trade
03:08and then that international trade is vulnerable to geopolitical events.
03:12And now in four years we've seen two huge ones.
03:15We saw the Russia invasion of Ukraine in 2022 and the huge impact that that had on gas prices in
03:23Europe
03:24and around the world.
03:26And now we've seen the closure of the Straits of Hormuz.
03:29So just in four years we've had two very, very big shocks, which reflect the fact that if you have
03:35a system
03:36which is dependent on trade in fossil fuels, it is just vulnerable to geopolitical events and volatility.
03:45Renewable energy is not equally distributed across the world, but almost everybody has renewable resources.
03:52And so it's much easier for people, and it will take us, you know, several decades for people to be
03:58much more energy independent.
04:00I think it also requires bold leadership and courage to take the opportunity.
04:06I'm thinking of President Trump, who is proudly pro-oil.
04:09I wonder if his trip to China this week, seeing clean energy in action, has perhaps persuaded him
04:16in how you persuade someone who's committed to oil.
04:20Well, it's a very good question, because I tell you every time I go to Shanghai and Beijing,
04:24I come back and I say, why aren't you going faster in London towards the benefits of electrification of our
04:32road transport,
04:33getting the noise and the pollution off our streets?
04:36So I don't know whether President Xi Jinping managed to, you know, show President Trump enough of what, you know,
04:45Beijing traffic looks like to have that effect.
04:47But you are absolutely right.
04:48We do need bold leadership.
04:51We have had it in China.
04:54China has still a lot to do.
04:56You've got to move beyond coal in the electricity generating system,
05:00but on the side of electrification, you're ahead of the world.
05:04But other countries, and in particular countries in Asia, and I will be down in Singapore next week,
05:10I think should see what's happened in this crisis as a wake-up call to really go faster on electrifying
05:19cooking,
05:20electrifying road transport, electrifying heating in those places where there is a heating need.
05:27And all of that is now technologically possible.
05:29Thank you so much.
05:30Really great chatting to you, Lord Adair Turner.
05:32He's co-chair of the Energy Transitions Commission.
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