Jeremy Rifkin: 'Europe can lead the third industrial revolution'
Climate change and the depletion of oil reserves are taking place faster than expected and the policies we are putting in place will be insufficient to keep up, leading economist Jeremy Rifkin told EurActiv.fr in an interview, where he pleads for the EU to lead the way towards a “Third Industrial Revolution”.
Leading US economist Jeremy Rifkin is president of the Foundation on Economic Trends.
You presented a survey called "Leading the Way to the Third Industrial Revolution". What does this third industrial revolution mean?
We are now in the twilight, in the sunset of an energy regime. Sunsets take a long time and we're going to still have this energy regime for some time in the 21st century, but the externalities are building up quickly. Climate change increases rapidly in developing countries because of the price of oil and gas going up on the markets. If we think we're taking a hit, with prices going up to $90-100, imagine what's going on in developing countries today. That's the untold story actually - added to political instability in all the regimes of the countries producing oil and gas.
The first thing that hits you about the third climate report of the United Nations (UN) is the speed and acceleration of this climate change. What is clear is that it is happening faster than the models can keep up. The second report said that we'd probably see the snow disappearing in the Everglades by the 22nd century. The third report shows that it will now disappear in the first 30 years of the 21st century. The second report said we'll see more intense hurricanes in the Caribbean and the Gulf Stream in the 22nd century. The new report says we are doubling the intensity of hurricanes already now in the 21st century, giving the example of Katrina.
If we go two to three degrees more in (terms of) temperature rise, the UN panel says we might see the potential extinction of between a third and over half of the species of life on earth. Now, put that in perspective. We've had five waves of biological extinction in 450 million years. Every time we had a massive extinction of life, it took 10 million years. We don't grasp this. Humans haven't been on this planet for long, about 175,000 years. We have to understand the enormity of what is happening here. We are talking about the potential extinction of our species.
The other thing of course is peak oil. The peak should be about 2% of growth rate of energy by 2035. Now we had people saying in December that could have a supply breach by 2014. Some of the best geologists in the world have been looking at reserves figures with computer simulation and they say we'd peak between 2010 and 2020. Mexico peaks in two years, Russia peaks in two years [… ] So, I don't know who's right, the optimists or the pessimists. But anyway, it will happen between 2010 and 2030, and it leaves a very small window.
The problem now in the EU and also in the world (and that was obvious in Bali) is that everybody is frightened and is trying to hold on at the last stage of an energy era, saying "Not me, why should I sacrifice?". In the EU, everybody is fighting with each other to know if they could reach the 20% by 2020. And everyone is saying "Why me? How about you? As long as we see this as a punishment, everyone will continue to fight and call names and not want to share the burden. We have to turn this from an adversity to one of the – probably - greatest economic opportunities in history. Even if we do that, it may not be enough. We don't know. But then the question is: "How are the big economic revolutions in history made?", how to turn this into an opportunity? Because we have a scientific diagnosis, but we don't have an economic game plan.
What is the role of Internet in this revolution?
Next communication levels organise new energy regimes. The great pivotal economic changes in world history have occurred when new energy regimes converge with new communication regimes. For example, you probably heard of the Sumerian civilisation. It's important because the Sumerians were the first to create hydraulic agriculture. They captured the sun in the cereal and plants, and the cereal became energy. They had to build canals and dikes, and had a huge labour force, with division of labour. They had to have a storage and distribution system. It was the first prototype of industrial organisation. They required a revolution of communication to organise the new energy regime called agriculture.
And that is right for two things. I have studied hydraulic agriculture; it's been kind of a hobby. When you study every hydraulic civilisation, in the Middle East, China, India, Mexico, with the exception of Peru, written communication converged with stored energy in the form of surplus grain. Guttenberg's print press and mass literacy converged with coal steam and became the communications level that landed the energy revolution. We couldn't have managed and communicated the first industrial revolution with codex.
In the 20th century, the creation of the telephone in the early 1900s converged with the internal combustion and oil for the second industrial revolution. We got 100 years out of it. Now we should start the third industrial revolution.
We had a very powerful communication level in the last few years: personal computers, the internet, satellite, etc. One to one, one to a million, everyone communicates with each other at the speed of light. We're all connected to the central nervous system.
Now what I'm suggesting is that we have yet to see what this communication revolution will do down in history. We've seen in terms of increasing IT, productivity, education, and globalisation. Right now though, it's about to answer a deeper mission, what its deep historical mission will be. And, although the new software and communication revolutions have begun to increase productivity in every industry, their true potential is yet to be fully realised. That potential lies in their convergence with renewable energy, partially stored in the form of hydrogen, to create the first "distributed" energy regimes.
This distributed communication revolution, just now in the business community, would converge with a new energy regime, distributing energy, to start the third industrial revolution. It should have as much impact as did the first and second industrial revolution.
What is "distributing" energy? That's the key.
According to you, the third industrial revolution relies on three pillars?
Yes. The first one is renewable forms of energy—solar, wind, hydro, geothermal, ocean waves and biomass. While these sunrise energies still account for a small percentage of the global energy mix, they are growing rapidly as governments mandate targets and benchmarks for their widespread introduction into the market and their falling costs make them increasingly competitive. Billions of euros of public and private capital are pouring into research, development and market penetration, as businesses and homeowners seek to reduce their carbon footprint and become more energy efficient and independent.
The second one is storage capacity. The EU is investing in the renewable energies, 20%. Now when we're dealing with renewable energy, we have to find a way to store it. The introduction of the renewable energy pillar of the Third Industrial Revolution requires the simultaneous introduction of a second pillar. To maximise renewable energy and to minimise costs, it will be necessary to develop storage methods that facilitate the conversion of intermittent supplies of these energy sources into reliable assets. Batteries, differentiated water pumping and other media can provide limited storage capacity. There is, however, one storage medium that is widely available and can be relatively efficient. Hydrogen is the universal medium that 'stores' all forms of renewable energy to ensure that a stable and reliable supply is available for power generation and, equally important, for transport.
But some people say that it is very expensive. The network of fuelling stations will cost vast sums of money, trillions of dollars will be needed to develop infrastructure according to a recent study, fuel cell batteries that convert hydrogen into electricity have limited efficiency and storage capacity etc., and fuel cell batteries are still highly expensive. What do you think?
Yeah sure, but it's like the first cars, the first computers. We have to get the mass distributed. Hydrogen will become the universal carrier for storing renewable energy, but there will be mixed carriers like water pumping, batteries etc.
The most important thing is that a renewable energy society becomes viable to the extent that part of that energy can be stored in the form of hydrogen. That's because renewable energy is intermittent. The sun isn't always shining, the wind isn't always blowing, water isn't always flowing when there's a drought, and agricultural yields vary. When renewable energy isn't available, electricity can't be generated and economic activity grinds to a halt. But if some of the electricity being generated, when renewable energy is abundant, can be used to extract hydrogen from water, which can then be stored for later use, society will have a continuous supply of power. Other storage technologies, including flow batteries, pump hydro, flywheels, ultra-capacitors and the like provide niche storage capacity along the intelligent utility network and complement hydrogen in maintaining a secure supply of available energy. Hydrogen can also be extracted from biomass and similarly stored.
So pillar one is renewable energy. Pillar two is hydrogen and other storage technology to store that renewable energy. But then the question is "how do you distribute it?". That's pillar three: the distributive communication revolution converges with the distributive energy revolution to create the third industrial revolution.
If I had said 20 years ago that there would be big centralised television networks; if I had said everyone will be able to communicate with each other within seven seconds, and watch the same big television networks, etc - if I had said all these things, people would have thought I was mad. You have to imagine the EU in 25 years, every home, every factory, every technology plant, every shop, every building would have become a power plant producing local energy.
The idea is to generate renewable energy locally. Then we store them with hydrogen and other technologies. And what do we do with the surplus we don't need? This is where the distributive communication revolution connects with the distributive energy revolution.
But how and who will control everything?
The intergrid is the next IT revolution. The software was developed in the US.
We have software now, which allows you to take 10,000 little tiny desktop computers, if you connect them, you will make much more distributive power. The magnitude, you could bring it to the most expensive centralised computer that exists on this planet. That same technology can be used for the power grid now, and you have to imagine that everyone becomes a powerful player, just like an information producer.
When we begin to factor renewable energy wherever we are in our infrastructures, in our homes, in our offices, in our vehicles, then if we can store the hydrogen and begin to share it and convert it back to electricity with distributive power, there isn't a magnitude greater for any kind of power you'll ever get from centralised nuclear power plants, coal or gas.
This industrial revolution should have a great impact in the 21st century, just like other revolutions in their time. It's going to change everything, the power of the people, our business model, our policies. And the question is: "Can we get on the page, with the whole human race, in enough time to make a difference?"
We have to think of everything possible, there is no limit to our imagination in order to answer that question. So what I've laid out here is this third industrial revolution. I think the developing countries have the most to gain.
The EU should begin to move this technology within Europe and then exploit it beyond its territory, in the rest of the world, with public/private partnerships, capital leveraging, economic development, etc.
Now the EU preoccupation for the next 50 years is energy security. I am often asked by Commissioners "How do you reach the Lisbon objectives? How do we have economic growth?" The EU has the biggest internal market in the world with 500 million consumers. And if you add your association of partnerships with the Mediterranean countries, etc., you have a billion people. But the problem is that the internal market is not fully integrated. So your 500 million European consumers and your 500 million others are not able to engage in social economics and social/cultural commerce. So you need completely integrated transport, communications and power grids. The new energy regime is based on distributive communication and will come together with distributive energy. With concerns about Persian oil, Middle East oil, etc., the EU needs to develop energy security. And hydrogen and the intergrid will allow that.
A continent-wide, fully integrated intelligent intergrid allows each EU member state to both produce its own energy and share any surpluses with the rest of Europe in a "network" approach to ensure EU energy security. Italy can share its surplus solar energy with the United Kingdom, the United Kingdom can share its excess wind power with Portugal, Portugal can share its abundant hydropower with Slovenia, Slovenia can share its culled forestry waste with Poland, Poland can share its agricultural biomass with Norway, etc. When any given region of the European Union enjoys a temporary surge or surplus in its renewable energy, that energy can be shared with regions that are facing a temporary lull or deficit. Hydrogen - buttressed by other niche storage media – provides a universal carrier for all forms of renewable energy, for use in transport, or for conversion back to electricity when needed to feed the power grid.
How long will it take to ensure all of this?
With the objective of 20% by 2020, and the need to construct all infrastructures etc., I would say between 2020 and 2050.
In 2007, the EU Parliament passed a written declaration calling for a transition to renewable energies, hydrogen economy, and intelligent power grid generation - the three fundamental pillars of the Third Industrial Revolution. An overwhelming majority of EU parliamentarians signed the measure, along with the titular leaders of all seven of Europe's leading political parties, and Hans-Gert Pöttering, the president of the European Parliament. The EP thus became the first legislative body in the world to officially endorse the three pillar strategy to usher in the Third Industrial Revolution.
So now the Parliament has stated its position. President Barroso has been very aggressive on moving towards the third industrial revolution. And the meeting between Barroso and hydrogen, construction, scientific and industry leaders, as well as political leaders, last December was another step forward. I spent a long time with each of them to explain that we have to turn this from a punishment into an opportunity. People are willing to make sacrifices and benchmarks if we add to that an economic plan. But why would anybody accept all these restrictions with no hope of anything better in the end? Why would they sacrifice the end of an energy era if we don't have a new energy era on the horizon? So the EU can potentially self-destruct after a while if there is no plan after 2020. Don't expect the US or India to come save the world. What I said to the ministers in June is you can't stop, you have to continue, you have to keep the bar up high, because the human race is really potentially lost.
France is fighting for nuclear energy.
You don't think that it is the energy of the future?
This is politics. But in order for it to work this is what you have to do: You have to put under construction a new nuclear power plant every 30 days for the next 50 years. That's 2,500 new power plants. This is not realistic. It's keeping us from getting the third industrial revolution. I think they might build 200 new power plants in the next 25 years but not if we're going to replace those 400 at-risk power plants. It's part of the myth, that second industrial revolution, we're going to try to clean up those fossil fuel plants as well but we can't just say that nuclear is the answer, because we're not going to build 2,500 power plants, it is too expensive. Secondly, we could take the uranium and turn it into plutonium, but do we want 25 countries with plutonium or uranium?
We need the second industrial revolution's energies and industries in the transition, so give them what they need to be really efficient and reduce them progressively because they're going to be here for another 40 or 50 years.
And what is the attitude of the United States?
For now, nothing has been done with the administration. But locally yes, and there are politicians who takes this at heart. So my belief is that if we can manage something in the EU, if something happens, because of the benchmarking done in the US, it will be able to go back to the USA within 12 months, with the new administration. Europe should not panic or deconstruct. It is time to address the energy crisis and turn it from adversity to an economic opportunity. Europe created the first industrial revolution. We (USA) created the second revolution, Europe can make the third one. We can all work together with politicians, companies and NGOs. But we have to believe in it because we can make a change.