Return to Transcripts main page

Fareed Zakaria GPS

U.S. Congress Narrowly Averts Government Shutdown; Interview With Zanny Minton Beddoes And Richard Haass; Interview With Fatih Birol. Aired 10-11a ET

Aired October 01, 2023 - 10:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

[10:00:35]

FAREED ZAKARIA, CNN HOST: This is GPS, the GLOBAL PUBLIC SQUARE. Welcome to all of you in the United States and around the world. I'm Fareed Zakaria coming to you from New York City. Here's my take.

The world that probably best describes the Biden administration's efforts and public policy is ambitious. Most of its initiatives from infrastructure funding to support for green transformation to aiding Ukraine are big and bold. Now the White House is trying to put together another major effort that if successful will be a game changer.

The Saudi-Israeli normalization. There are many complications that could derail the negotiations but if a deal comes together, the Middle East's strongest military and most technically advanced power, Israel, will be allied to the region's strongest economic power, Saudi Arabia, which is still the swing suppliers of the world's oil. All under an American security architecture.

That would be a major win for Washington. For over a decade now, the U.S. has been searching for a role in the Middle East that is not the old quasi-imperial one and yet secures American interests in this crucial region, allowing Washington to focus on the larger challenges posed by Russia and China. By organizing a soft alliance between Israel and Saudi Arabia, Biden can rely on these two countries to anchor the region economically and militarily.

There is a price, of course, and it's substantial. Saudi Arabia wants an American security guarantee and American technology to build a nuclear energy industry. That includes the domestic enrichment of uranium which the U.S. has never facilitated in another country. Of course, many countries with homegrown nuclear industries enrich their own uranium, from India to France.

My understanding based on sources in the U.S. government is that the two sides are close to agreement on the nuclear issue which will likely involve an American controlled enrichment facility in Saudi Arabia.

The security umbrella is reportedly not going to contain a version of NATO's Article 5 guarantee but rather a softer commitment to respond and take action if Saudi Arabia is attacked. This will require careful language to ensure that the clauses not invoked if the Saudis precipitate a crisis as they have in recent years.

It would have to include some assurances that Saudi Arabia would accommodate U.S. interests on the price of oil, exclude Chinese military facilities from its territory, and keep denominating its oils in dollars. Assuming these issues can be overcome, Washington should open up its security umbrella to Saudi Arabia.

The truth is that ever since the Carter doctrine of 1980, which declared that the Persian Gulf was an area of vital interest to the United States, Washington has recognized that intervention in the Gulf by a hostile power would threaten the economic life blood of the industrial world. And when such an attack took place against Kuwait in 1990, directly threatening Saudi Arabia, the U.S. did, in fact, come to the rescue of Riyadh.

The largest challenge is with Israel. This deal would be concluded with the most extreme right-wing government in Israel's history. One that is trying to alter the constitutional makeup of the country and moving to make a Palestinian state an impossibility. But Saudi Arabia and the U.S. have a lot of leverage. Israel needs this deal more than they do. And in particular, Israel's Prime Minister Benjamin Netanyahu who faces mass protests, an ongoing trial and a restless coalition of extremists.

If Washington and Riyadh work together, they might be able to pull off a new U.S.-Saudi-Israel alliance that could also make greater progress on Palestinian rights that has taken place in decades. Both Riyadh and Washington should make clear to Netanyahu that he has to take hard steps to keep open the path for a two-state solution. That means a freeze on the expansion of Jewish settlements in the West Bank, an end to the legalization of illegal outposts, and the opening up of areas currently under Israeli control to allow the Palestinians to expand their towns in the West Bank.

[10:05:09]

This would enrage Bibi's most extreme coalition partners who want to annex all of the West Bank. But there is a way out of the impasse. As Martin Indyk, a former U.S. ambassador to Israel told me, "Biden should present Bibi with a strategic grand bargain that includes action on the Palestinian issue. Let Bibi figure out to manage his coalition or how to break it and form a new one. What Biden is proposing is good for the United States, Saudi Arabia and Israel. Extremists in Netanyahu's government should not be allowed to veto it."

Bibi is banking on the notion that the Saudi Arabia government actually doesn't give a damn about the Palestinians and will sell them out for token rhetorical concessions. But he may be mistaken at this assumption. Crown Prince Mohammed bin Salman has kept his mullahs and religious conservatives at bay while he has opened up the country and implemented major economic and social reforms.

He might not want to anger them by abandoning the Palestinians as well. And if he insists it's possible that Biden will back him up, and some Democratic senators will probably make it clear to Bibi that the price of Senate ratification is a real movement on the two-state solution. In that case Bibi Netanyahu will have to decide what he wants more. A truly historic advance in Israel's security, or keeping afloat his rickety, controversial, extremist coalition.

Go to CNN.com/Fareed for a link to my "Washington Post" column this week.

(COMMERCIAL BREAK)

[10:10:09]

ZAKARIA: With fewer than three hours to go before the federal government shutdown, the Senate passed legislation late last night to keep it funded for only another 45 days. As I've said before, the U.S. is the only nation that I'm aware of where legislators approve spending and then have to approve paying for that spending when the bills come due.

It is nonsense and it points to America's fiscal irresponsibility which is exactly what I want to talk to Catherine Rampell about. She's an opinion columnist at "The Washington Post," a commentator here at CNN, and brilliant.

So one thing I want to start with is, why are the MAGA Republicans, you know, dying on this sword, which is spending cuts? I thought that was the Tea Party Republicans. I thought that was the Paul Ryan wing of the Republican Party. Trump came in saying I don't want to cut Medicare, I don't want to cut Social, I don't want to cut spending. I want to increase spending which he did. So what's going on.

CATHERINE RAMPELL, OPINION COLUMNIST, WASHINGTON POST: I think it's performative. They're not really interested in cutting spending. This performative desire to get fiscal deficits under control is really at odds with the policies on the table. They have ruled out spending cuts to all of the places where spending is actually a major problem, long- term trajectories of that spending anyway.

I'm talking about entitlements, Social Security, Medicare, as well as other parts of the Annual Discretionary Budget Defense. They're not super interested in touching those either. So when you rule out all of the major categories of spending as well as revenue increases, which they've already done, you end up fighting over a very, very tiny share of the budget, each category of which would be very unpopular to cut. So, yes, I don't think they really mean it.

ZAKARIA: So 45 days from now we're back to the same because they're not actually proposing anything real.

RAMPELL: No. I mean they have put on the table some pretty dramatic cuts to specific programs. Things like, for example, rental assistance or food assistance. But none of that is going to get through.

ZAKARIA: That is 0.1 percent of the budget.

RAMPELL: Yes. Yes. Again, the discretionary portion of the budget, which is the share of the budget that they actually fund every year as opposed to being on auto pilot is less than a third of total spending. So if you rule out all of the obvious places to cut, and then you also rule out within that annual discretionary budget things like Border Patrol, or law enforcement, you end up having to propose very deep cuts to a few programs which would devastate those programs and make virtually no difference to our long-term debt trajectory.

ZAKARIA: How did we get here? Because we do have a big -- I mean, they're running deficits now that are in the 8 percent to 10 percent range. How did we get here?

RAMPELL: I think if there is any bipartisan agreement within Washington, it is that we should not cut entitlements and we should not raise revenues on at least 98 percent of the population. So that is a recipe in and of itself for having larger deficits. But then on top of that, you have, as you menged, Trump was very into increasing spending despite the rhetoric about being, you know, a tightfisted businessman.

He was going to bring budgets under control. If you look at not only the tax cuts, which have gotten a lot of attention under Trump and which cost around $2 trillion, if you look at how much he added in new spending before COVID, it was like $3 trillion. And then additional spending of course after COVID hit.

ZAKARIA: Which was about $5.

RAMPELL: And then Biden of course added more spending to the budget in sort of in response to COVID. Some of those spending programs were not specifically about the pandemic, of course. And then you have on top of that, a number of very expensive industrial policies that have been put in place, which you can debate on the merits, but you can't debate the fact that for the most part they do cost quite a bit of money.

All of those things add up. So we already had, in the backlog, these unsustainable deficits coming and then we made them worse essentially because neither party has put forward any realistic approach to undoing those problems and in fact, their exacerbating them. They're adding spending and Biden, for example, has committed to extending the majority of the Trump tax cuts at this point.

ZAKARIA: So it feels to me like what you began by saying is that the core of the issue, which is ever since Ronald Reagan comes in and he decides that he's going to do these big tax cuts and he's going to increase defense spending, what I think became clear is the American people are very comfortable with Republicans on taxes and Democrats on spending.

[10:15:03]

In other words, they like Republican levels of taxes and Democratic levels of spending, but there is a huge gap between. That means you have a huge amount of -- and you make that up by borrowing.

RAMPELL: Yes. Absolutely. And for a while, interest rates were very low. So it was relatively costless for us to continue borrowing. Today the 10-year treasury is at 4.5 percent, over 4.5 percent. That starts to get a lot more painful in the years ahead because the amount of money we will be forced to spend on just servicing the debt alone will increasingly crowd out other kinds of priorities.

I mean, to be clear, there are categories of spending that I think we should be devoting more resources to. Things that will pay off. You know, making sure there's no lead in the pipes so that kids can grow up to be productive healthy adults and workers. Universal pre-K, things like that that would pay off.

All of those kinds of priorities are getting crowded out by the fact that we have shown so much cowardice in making tough choices about the things that are on auto pilot as well as the other kinds of policy measures that seem popular. But that we're not funding. You know, even if their popular, we need to find a way to pay for them.

ZAKARIA: Now as you say, we were able to do all this because interest rates were low. But now they're -- you know, the 10-year treasury is at 4.5 percent. Ruchir Sharma had an interesting piece in the "FT" saying, you know, we used to run deficits that were like every other industrialized country, around 3 percent of GDP. We're now running 8 percent of GDP. At some point does this -- is this unsustainable?

RAMPELL: Well, you know that expression, if something can't go on forever it won't? That's sort of where we are. We're not facing a crisis today, obviously. Markets do seem to be responding to some extent to these long-term fiscal challenges in the United States, at least that's one way to interpret why the long-term treasury rates have gone up, but so far the world is continuing to lend to us.

They have shrugged off, you know, other investors around the world, other governments around the world have shrugged off these challenges that we face. But as we continue to see more political dysfunction, including in this shutdown threat, including in the threat to, in fact, needlessly default on our debt when we could have paid it off, I wonder how sustainable that will be.

And again, it will start to become more painful to continue to run these deficits when the world seems a little bit less willing, markets seem a little bit less willing to lend to us essentially for free.

ZAKARIA: Catherine, always a pleasure. Thank you so much.

Next on GPS, one the ways Kevin McCarthy avoided a government shutdown was keeping Ukraine funding out of the legislation. We'll talk about the West's apparent waning interest in Ukraine when we come back.

(COMMERCIAL BREAK)

[10:22:08]

ZAKARIA: Let's get right to the rest of the world with today's terrific panel, Zanny Minton Beddoes is the editor-in-chief of "The Economist" and Richard Haass is the president emeritus of the Council on Foreign Relations.

Welcome both. Zanny, you were in Kyiv about the same time I was. You interviewed

Zelenskyy as I did. There was an interesting thing that came across in your interview which I thought was Zelensky saying I hear all these Western leaders telling me they're with me but I look in their eyes and I wonder.

ZANNY MINTON BEDDOES, EDITOR-IN-CHIEF, THE ECONOMIST: That's right.

ZAKARIA: That maybe they're not.

MINTON BEDDOES: He said exactly that and he said -- before he said that, he said I have good intuition. And something like my intuition has served me well, and then he made this point. And it was quite a powerful point because I think he really does realize that the support that was there is in certain quarters perhaps not as strong as it was.

And, you know, he came to Washington after you and I saw him and he felt that I think very strongly. It was a very different reception than the one that he had last time he was in Washington.

I'm not sure how dangerous it is right now. I'm particularly worried about the U.S. I think in the U.S., going into an election year, you know, it is going to be difficult to sustain support. In Europe, there are countries which are tiring. We have a tough winter with high energy prices, too. But I think in Europe there is much more recognition of the stakes in this. And there are existential stakes for Ukraine and frankly existential stakes for Europe.

And I think the challenge now, and I think I know you and I spoke about this while we were in Ukraine, I came away from a week there and I saw him, I saw his wife, I saw a bunch of people, most the key players in the government. I think for me the real realization was that this war is not going to be over any time soon. This is a long haul. It is a war of attrition. The front has barely moved.

And so the focus needs to shift to how to ensure that Ukraine can, as a country, as an economy, survive, indeed thrive whilst it is still at war in its eastern front, and that means much more focus on air defense. It means much more focus on Ukrainian capability. So the fact that they're building up their drone capability I think is really important and it means a different kind of approach to assistance to Ukraine and that's the question for me, whether the West can do that.

ZAKARIA: So, Richard, you and Charlie Kupchan put out a very interesting essay in "Foreign Affairs" basically trying to begin the process of thinking about a negotiation, and I talked to people when I was in Ukraine about this and what their response was and particularly this was private, publicly it's all fighting to get everything back.

A couple of people said to me, look, the problem is Richard Haass's proposal is premature because we cannot, to Zanny's point, we cannot function as a nation right now, as an independent economy without being able to have Odessa, without being able to export our grain out of Odessa. Right now because of the way, you know, the Russians control the Sea of Azov, they control the Black Sea.

[10:25:03]

So we at least have to get back enough space in the south that we can control that. But that strikes me as that's going to be hard.

RICHARD HAASS, PRESIDENT EMERITUS, COUNCIL ON FOREIGN RELATIONS: It's going to be hard. And the Ukrainians have made life more difficult for themselves by all the hyping about the counteroffensive. raised expectations it hasn't quite delivered. That's the nature of warfare, something of a letdown. More broadly, they've got a bigger problem. In foreign policy, you always run into difficulty when there is a gap between your ends and your means.

And I would say it's increasingly apparent there's a gap between Ukraine's ends. We've got to get every square inch of territory back, economic reparations, war crimes accountability, and what their means are, what their military means are. At some point, they, the United States, the Europeans, are going to have to recon with that gap and decide what they do. Do they change the ends? Do they change the means?

We're going to get to that point. Yes, maybe we were premature, but this process has to begin. There has -- and I think it actually has begun privately in Ukraine and at some point it's going to have to begin between the United States and Ukraine because it's going to be unsustainable to maximalize the ends if increasingly people come to the conclusion, however desirable it is, it's not feasible.

MINTON BEDDOES: But can I weigh in on that? Because I say this with some trepidation to the great Richard Haass, but I think you're right that in the end the territorial ambitions of going back to the pre -- to the 1991 borders are unlikely to be met, and to be honest I think people in Ukraine realized that. Publicly politicians can't say it right now.

HAASS: Even the 2014 borders are going to be very hard.

MINTON BEDDOES: Absolutely. Absolutely. But what I think -- where I think I disagree with you is the notion that there is any realistic hope of negotiating with Putin. One, Vladimir Putin clearly thinks he can outlast the West, that the West is tiring. He's waiting for '24. He's hoping that Trump is going to win. And even if you did some deal with him, you know, he would not stick to it. So I just think -- I think anything that is predicated on a negotiated settlement right now is just --

HAASS: Let me take issue with the great Zanny. One is I didn't say Putin is ready to negotiate. Indeed he's not. He wants to wait us out. I think he wants to see what happens in '24. There is still, though, potentially an argument for putting a proposal on the table not because Putin will jump at it, but to shape the debate in the West. I believe it becomes less difficult to sustain support for Ukraine if we can put some -- they can put something on the table, the Russians balk at it and then it's easier for the president and for others to say, hey, we put something on the table and by the way, you don't have to compromise your long-term goals. ZAKARIA: And this would be a plan that would not -- because they

currently have a peace plan but it's everything back. We want everything, 1991 borders.

MINTON BEDDOES: I think it's always good to have proposals for peace plan so I'm not against that. But what I think is really important now is to change the mindset particularly in this country that where I think there is a view this war needs to be over and then we'll start rebuilding Ukraine. This is not going to be like this.

This is going to be an extended conflict or an extended frozen conflict and so the kind of right way to think about it, this is much more I think like Israel. It is how do we ensure this country thrives with an aggressive belligerent aggressor on its eastern border.

HAASS: Which involves long-term help potentially NATO, potentially E.U. That's all going to be part of the deal.

ZAKARIA: All right. We've got to stop. When we come back, we're going to talk about something very interesting and very tragic that has happened in the news. The disappearance of the Nagorno-Karabakh, the flight of three quarters of the Armenians from there. Why did it happen and what happened, when we come back.

(COMMERCIAL BREAK)

[10:32:42]

ZAKARIA: And we are back here on GPS with "The Economist's" Zanny Minton Beddoes and Richard Haass of the Council on Foreign Relations.

Richard, what happened? You know, for those who don't understand, Nagorno-Karabakh was this Armenian enclave within Azerbaijan. It had declared itself an independent republic. I think no other country in the world had recognized it, but it had been protected and now Azerbaijan is basically running it over. It's a huge human tragedy. What's the geopolitical angle here?

HAASS: It's essentially disappearing and it is a human tragedy. Geopolitically, I think the most interesting part of this is about Russia. For 30 years this special situation has been maintained and Russia allowed it or in some ways enabled it to be maintained. And now --

ZAKARIA: Russian peace keepers.

HAASS: Hundred percent. Hundred percent. And they've stopped. And they've essentially pulled back and watched this all unfold, the tragedy of it. I don't think it's that cynical. I don't think they wanted this. I think my guess is, Fareed, you know, you and Zanny may disagree with me, that they simply don't have the capacity. They've got a lot on their plate right now in Ukraine and elsewhere, and the plate is pretty small.

They just don't -- we think of Russia as a great power. It's less than that. It has capabilities, yes, but it is not a great power. It can't multi-task in certain ways. So I think this is one of the -- you know, what the French would call (speaking in foreign language), this is one of the consequences of combat and it's just going to be miserable for these innocent people.

ZAKARIA: I totally agree. You can see one sign of that. Russia increasing defense spending by 70 percent. That means they're running out of everything, too.

MINTON BEDDOES: Absolutely. I mean, for me, the striking thing is the length of time this has been going on, the Nagorno-Karabakh war started when I first lived in Ukraine 30 years ago and I went to the Caucasus and that was the big conflict that journalists were going to go and cover. Literally the beginning of my career. Now 30 years on it's over in -- you know, in a matter of hours, practically.

And I agree with you, Richard. I think this is a function actually of Russian weakness and it is a sense that so focused Russia has to be on Ukraine, it is both unable to focus on others and others around the rest of the Russian federation are taking advantage of that. And so I think this is, to me, a sign of Russian weakness, not Russian strength.

[10:35:01]

And to your point, the Russians are mobilizing, shifting huge, huge share of their economy on to a war footing. Now that's not so great for Ukraine because, although obviously the Western partners of Ukraine that collectively have a much bigger GDP than Russia, we're not going to shift that much to increase defense spending that much.

ZAKARIA: Right. Right.

MINTON BEDDOES: But Russia is -- that's why I think this is going to go on for years and years, because Russia is mobilizing for a war economy.

ZAKARIA: Russia's economy is 15 times the size of Ukraine's.

There's so much to talk about so I want to get -- one thing that struck me about in the United States, Dianne Feinstein, you know, dying before she retired. And she is unfortunately not the only person in the U.S. Senate these days who we wonder whether they will die before they retire.

What is it about American politics that is attracting a kind of gerontocracy?

HAASS: Mitch McConnell has had several freezing episodes. I don't know, obviously we got two likely candidates to the presidency. One will be pushing 80, one will be in his early 80s by time of the election. I mean, on one hand, it represents the demographic change in America. We are an aging society and maybe our politics reflect it. Clearly the incumbency gives great advantages. Those who have it don't want to give it up. But it's a problem.

Most of the society is much younger, doesn't identify with these people. You see it when issues like technology come up. They have a real difficulty understanding it. And these are also demanding jobs. I was in government when I was a lot younger. The idea of working those kinds of days, seven days a week now, that to me is a somewhat troubling prospect.

ZAKARIA: You have a very young prime minister in Britain.

MINTON BEDDOES: We do. We have a young prime minister. This is one area where I think most of the rest of the world looks at the U.S. and just kind of rolls their eyes. We just cannot understand that, you know, in a country with, what, 300 million plus people, there is a same group of gerontocrats who are kind of running it and sticking there. And I'm not surprised that younger Americans are, you know, completely disillusioned by this, although I have to tell you that this week's cover of "The Economist" is called "Living to 120." So maybe if we're going to stick with these people, you know --

HAASS: They may be too young, these people. They're only 80.

ZAKARIA: The other thing that I've been tracking is China. It feels to me like the Chinese government, everybody has been waiting, and maybe I should start with you on this, Zanny. Everybody is waiting for China's plan to get out of its economic troubles. They've had economic troubles in the past that people forget but they have many bubbles, real estate. But they always had this technocratic government that figured a way out of it. Right now it seems more frozen than I would have expected.

MINTON BEDDOES: You're absolutely right. They seem to be flailing in a way that we've not ever thought China would. Remember in the great recession of 2008, 2009, the Chinese, you know, did a huge stimulus that essentially supported the world economy. Whereas this time I think it was probably a year ago we were having this conversation and the expectation was the U.S. would have a hard landing and that China once it lifted its COVID restrictions, the economy would come roaring back.

In fact quite the opposite has happened. The U.S. looks remarkably strong still, at least at the moment, and the Chinese economy hasn't. I think it's a function of several things. Firstly, they really do have a big debt problem. They have a serious property bust in (INAUDIBLE), a big, big property --

ZAKARIA: So they can't spend their way out of this.

MINTON BEDDOES: They can't, and they could do a huge stimulus. They could boost consumption. But then you get into what seems to be sort of ideological concerns of Xi Jinping that he doesn't want to kind of give welfare payments so they're reluctant to do that. He's also massively killed off animal spirits by sort of randomly locking up, you know, senior entrepreneurial leaders, by hitting the tech sector very hard.

And then the, you know, fight with the U.S., the economic constraints, the export controls are making a difference to China. So you add all of that up, in the short-term the economy is in trouble. And I think a lot of confidence is really quite profound. For the first time when I talk to Chinese, whether it's, you know, corporate types, anyone I talked to in the last few months from China has been so downbeat about the prospects for the economy there.

ZAKARIA: So what does a China with this kind of economic profile translate into in foreign policy?

HAASS: I think in the short run you see the interest in re-establish something of a more normal diplomatic relationship with the United States particularly in the economic realm. I think that's what the Chinse are most interested in. In the long run, that's the big conversation, Fareed, that you and I and others are having.

Does a Chinese leadership that can't get its legitimacy and public support out of delivering high economic returns, which they've done for decades, do they reform economically, even though it may mean giving up political control, or do they look to foreign policy to nationalism as providing ballast for them? And that's what frightens a lot of people, if the economy continues to encounter headwinds for the next few years, at some point, as he ends his third term or even begins a fourth, does Xi Jinping look to Taiwan and say that's going to be my legacy, that's going to be the source to my legitimacy because the economy can't provide it for me?

[10:40:05]

ZAKARIA: We will have to have both of you back to talk about that because it is a huge, huge subject.

Thank you, Zanny Minton Beddoes and Richard Haass.

Next on GPS, are we reaching a tipping point in the world's use of fossil fuels? I will discuss that with the head of the International Energy Agency who says yes.

(COMMERCIAL BREAK)

ZAKARIA: Oil prices have risen again in recent months. Surging past $90 a barrel. That is partly due to recent supply cuts from countries like Russia and Saudi Arabia. It is also because despite all the money and effort being put into the clean energy transition, global oil consumption is expected to hit record levels this year. But according to new research from the International Energy Agency, oil demand will peak by 2030, which means in just a few years oil consumption will finally start declining.

[10:45:05]

Will that come fast enough to avert catastrophic climate change and what do we need to do to decarbonize faster?

Well, I spoke to Fatih Birol, the executive director of the International Energy Agency.

(BEGIN VIDEOTAPE)

ZAKARIA: Fatih Birol, pleasure to have you on.

FATIH BIROL, EXECUTIVE DIRECTOR, INTERNATIONAL ENERGY AGENCY: Thank you very much.

ZAKARIA: So you have a unique kind of global porch from which to look at energy. Give us the big picture. What is happening over the next decade or two?

BIROL: I see a clean energy economy is emerging. Emerging fast and faster than many people realize. Just let me give you an example. This year, of all the new power plants built in the world, installed in the world, more than 80 percent is renewables. Mainly solar, wind and others, but the renewables are dominating the game, and mainly because they are becoming cheaper.

When we get to the transportation sector, the cars, trucks and others, also we see a major electrification rate. Only two years ago, one out of 25 cars sold in the world was electric, and this year one out of five cars sold is electric. This is growing exponentially. China, Europe, U.S., other parts of the world. So these are changing the picture of energy mix, and in that context, we may expect that the oil, gas and coal use globally can peak before the end of this decade.

ZAKARIA: So that last part of what you said has gotten you into some controversy. You have said, first coal, then oil, then natural gas are all going to peak.

BIROL: Yes.

ZAKARIA: Saudi Arabian government has attacked you for saying this. Others have, OPEC has attacked you. You stand by what you say which is fossil fuels are going to peak 2030.

BIROL: You are right. Some oil producers, they have a different view which I respect. We are looking at the data and this is a result. It doesn't mean that as of 2030 we don't use any more oil or gas or whatever. We will use them. But we will need them less. And if we want to reach our climate targets, we should even use much less than what we have today.

Even at the peak, the use of oil, gas and coal, the temperature increase will still be in line with 2.4 degrees Celsius, which is significantly higher than what scientists tell us that it should be 1.5 degrees Celsius. There is a big difference between 1.5 and 2.4 degrees Celsius which means a lot of extreme weather events as we have seen this summer, more and more of that for the several years to come.

ZAKARIA: What do you think of what President Biden and the Congress have done, the Inflation Reduction Act which has a huge number of green subsidies?

BIROL: In my view, this is part of 2015 agreement. This is a single most important climate action. It is going to give a big push for clean energies, it is extremely important for the United States and for the rest of the world. ZAKARIA: It seems to me the most important transition that could take

place with technology we already have is to move from coal to natural gas. Emits half of the CO2 of coal. Is there a plan? Is that likely to happen?

BIROL: It can reduce the emissions significantly but it will not bring us to 1.5 degrees Celsius. What will be the best is from coal to renewable energies. Solar, wind, hydropower.

ZAKARIA: But don't you need base load capacity? You need a backup because the sun doesn't always shine.

BIROL: You are completely right. If there is no sun, if there's no wind, you may be in trouble if you do not have nuclear power or hydropower or batteries in that case and many countries are building this bedrock, and Chinese, one of them, building nuclear power one after another, hydropower is --

ZAKARIA: But also a lot of coal. They're still doing a lot of coal.

BIROL: They do, a lot of coal, and it is one of issues that China has to deal with. In fact, on one hand, China is the champion of clean energy investment around the world today but on the other hand they are building coal plants but I believe it will be short lived. We are going to see even in China coal use will decline very soon.

ZAKARIA: What are you seeing on nuclear? I know that the Biden administration has, you know, finally made it easier, but it still takes a long time, very expensive. Can we see a real nuclear revival?

[10:50:04]

BIROL: Nuclear is coming back. The invasion of Ukraine by Russia reminded many governments around the world that the electric security is very important. Therefore generating electricity at home is very important and one of the options here, the (INAUDIBLE) is nuclear power. This invasion gave a boost to nuclear power across the world.

ZAKARIA: We have to leave it at that. Fatih Birol, pleasure to have you, sir.

BIROL: Thank you very much, sir. Thank you.

(END VIDEOTAPE)

ZAKARIA: Next on GPS, Canada says India, the Indian government may have killed a Canadian citizen on Canadian soil. How is this story playing out in India? I'll give you a hint. Not the way you think.

(COMMERCIAL BREAK)

[10:55:14]

ZAKARIA: And now for "The Last Look."

Two weeks ago, Prime Minister Justin Trudeau made a startling announcement. Canadian Security Forces he said are investigating a credible allegation linking agents of the Indian government to the murder of a Canadian citizen on Canadian soil. 45-year-old Hardeep Singh Nijjar was a Sikh activist and head of a Sikh temple in British Columbia who was gunned down by unidentified assailants in the temple's parking lot in June.

Perhaps Trudeau thought that by publicly raising these allegations he might shame the Indian government into cooperating with Canada's investigation. In the West, the news that India may have ordered a hit on Canadian soil is shocking. Analysts note gravely that such an act could only hurt India's ambitions on the foreign stage.

Secretary of State Antony Blinken has publicly asked India to cooperate in Canada's investigation. Editorials and outlets like "The Financial Times" and "The Economist" call for consequences should the allegations be proven. But in India, the reaction is very different. And reveals that, in fact, Justin Trudeau blew it.

Just look at the Indian press. The story has released a spasm of (INAUDIBLE), in which television anchors cast Canada not as the multicultural haven and stable democracy you or I may know, but as a rogue state bent on protecting terrorists.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Justin Trudeau, the supporter of terrorism, he opened terror back with sympathies for terrorists. He's at the point of no return.

(END VIDEO CLIP)

ZAKARIA: One commentator on Indian television threatened Canada with a nuclear attack. The Indian scholar, Sushant Sareen, describes the country's reaction well. If we did it, it was right. If we didn't, you were wrong. An analysis piece in "The Hindustan Times" conjures up memories of Western colonial powers ganging up against India, claiming that Nijjar's killing would become a rallying point for the Anglo- Saxon bloc to come together against India.

Indian officials have strenuously denied Canada's claims and in the same breath have accused Canada of providing a safe haven for terrorists. That might sound like a puzzling and absurd allegation but it is a reference to the fact that Nijjar was a Sikh separatist, one of many six abroad who advocate for a separate country for Indian Sikhs. The homeland they want to create is called Khalistan. It is an idea that goes back decades and the effort includes an armed militancy in India in support of it that peaked in the 1980s.

As "The Economists" notes, the movement for Khalistan was responsible for the death of thousands in the 1980s and '90s, but has since become little more than an idle talking point in the Sikh diaspora and has negligible support in India.

Whatever the reality of this one case, tensions between India and Canada over the Sikh activists in the diaspora have been long running and as the "FT" notes, India's accusation that Canada has been too soft on Sikh activists deserved some scrutiny. But it's also true that playing up this kind of threat to India is politically useful for Prime Minister Narendra Modi and his Bharatiya Janata Party.

You see, Justin Trudeau's whole strategy of naming and shaming India fundamentally misunderstands the dynamics of Modi's Hindu nationalism which is rooted in the belief that India's Hindu majority has been passive for too long in the face of threats from minorities and foreigners. When presented with an opportunity Modi knows how to translate it into political gold.

Take one example. In 2019 a suicide bomber carried out the worst attack in Kashmir in decades killing dozens of Indian soldiers. India blamed Pakistan-based militants and sent in the Indian Air Force to carry out strikes on what it said was a militant training facility in Pakistan, though Pakistan denied the strikes hit much of anything. Nonetheless, it was the first time such a cross-border operation had been carried out in almost 50 years.

As Mihir Sharma notes in Bloomberg, Modi then went on a victory lap saying in a campaign speech that he believed in barging into the houses of terrorists and killing them. He implied without any evidence that the opposition party's sympathies lay with the terrorists. Pollsters reported a boost in Modi's approval ratings after the strike.

Now Modi faces another election. Next spring. And he will surely be helped if he can run by standing up to Sikh separatism and the Western bullying, regardless of how real or dangerous either threat actually is.

Thanks to all of you for being part of my program this week. I will see you next week.