What Varro thinks matters. As Chief Economist of the International Energy Agency (IEA) since the start of 2016, the 44-year old holds one of the most influential roles in the energy industry. He provides strategic advice to governments across the world. The IEA is funded by 29 countries and acts as an energy adviser, compiling high-profile reports on the direction of the future energy system.
For Varro, if the world is to reduce CO2 emissions in line with the Paris agreement, the most important action governments and the energy industry must take is to maintain investment in low-carbon and renewable sources of energy – from biofuels to solar – and the technologies to support them.
The growth of natural gas will also play a key role. Varro debated the place of gas in the global energy mix with Maarten Wetselaar, Shell’s Integrated Gas and New Energies Director, at Delft University in the Netherlands on September 22, 2016.
Varro calls for continued investment in the cleanest-burning hydrocarbon. “One big advantage of gas is that it can be used in different sectors, from power to transport to industry,” he says.
“It would be extremely difficult to imagine feeding everyone in the world without fertiliser, in which gas is a core component. The same goes for plastics.”
Rising through the ranks
Varro, a Hungarian who cuts a professorial figure with his beard and spectacles, grew up in a solid family home in Budapest: his father was an engineer and his mother a secondary school teacher. But as a teenager listening to the Rolling Stones and Queen, he was unclear what direction his life should take.
Then, in the late 1980s, the so-called Iron Curtain that had divided eastern and western Europe for more than 40 years began to crumble. Hungary was in the forefront of sweeping political, economic and social change.
Varro immediately understood the significance of such change. “From that moment, I knew I wanted to be a part of the exciting transition Hungary was about to go through,” he says.
He completed his master’s degree in economics at Cambridge University in the UK and then gained experience as an economist at the National Bank of Hungary. A top government job as head of price regulation during the liberalisation of the electricity sector placed him at the heart of a pivotal moment in Hungary’s energy industry.
“Laszlo was so passionate,” recalls Peter Kaderjak, Varro’s boss at the Hungarian Energy Office, who is now an energy expert at the Corvinus University of Budapest. “He had a strong commitment to what we were doing. So much so that whenever I saw him after the weekend, he’d only allow a few seconds of chit-chat before we got down to business.”
Varro went on to join MOL Group, an energy company based in Budapest, before heading for Paris and the IEA in 2011. “This move proved that one country was not enough for him. To satisfy his insatiable dedication, drive and love of energy, he needs to focus on the world,” says Kaderjak.
Today, Varro’s job is all about understanding the global picture.
He sees a big role for companies both in and out of the energy sector, pointing to the likes of Apple and Google as large investors in wind and solar power.
And given new policies will mostly drive investment momentum in renewables, he places a large share of responsibility with national and local governments.
He offers Mexico, a country the IEA has advised, as an example of a government that has “demonstrated great courage” in its effort to reform the energy sector. Steps include a renewable energy policy that efficiently integrates solar and wind production in the country’s power system, while maintaining a secure supply of energy.
But Varro strongly believes individuals also have a responsibility to drive investments in cleaner energy.
“The world’s citizens are consumers, who decide what they want to buy,” he says. “They’re investors, who own publicly-listed companies. And they’re participants in political systems, making their views known at the ballot box.” As such, they influence decisions made by politicians and business leaders.
Varro spends much of his time travelling the globe, speaking with senior government officials and business executives about the future energy system. He constantly reviews old presentations, asking himself what he missed and got wrong. “This exercise teaches me modesty,” he quips.
But there is one argument in his presentations that Varro is certain will remain true – the continuous need for greater investment in low-carbon and renewable energy.
Without such investment, he fears the concern which crept up on him on as he walked his dogs might just be realised; and the Paris climate summit, for all its ambition, may not prove to be the turning point the world needs. Maintaining momentum, he says, is vital for the future of the planet.
By Tom Baird