Jeremy Rifkin, 66, founder and president of the Foundation on Economic Trends (FOET), is an American economist, writer, public speaker and activist, who also seeks to shape public policy both in the United States and globally. He advised the government of France during its presidency of the European Union (July 1st to December 31st, 2008). Rifkin also served as an adviser to Chancellor Angela Merkel of Germany, to Prime Minister José Socrates of Portugal and Prime Minister Janez Jansa of Slovenia, during their respective European Council Presidencies, on issues related to the economy, climate change and energy security. He currently advises the European Commission, the European Parliament and several EU heads of government, including Prime Minister José Luis Rodriguez Zapatero of Spain and Chancellor Angela Merkel of Germany.
Rifkin has testified before numerous congressional committees and has engaged in litigation extensively to ensure “responsible” government policies on a variety of environmental, scientific and technology related issues. Since 1994, Rifkin has been a fellow at the University of Pennsylvania’s Wharton Executive Education Program, lecturing CEOs and senior corporate management from around the world on new trends in science and technology. He has 17 published books –primarily focused on the impact of scientific and technological changes– in which he has predicted changes in: work, property, the American dream, the dangers of biotechnology, and a new hydrogen economy.
Rifkin became one of the first major critics of the nascent biotechnology industry with the 1977 publication of his book Who Should Play God?. His 1995 book, The End Of Work, is credited by some with helping shape the current global debate on technology displacement, corporate downsizing and the future of jobs. His 1998 book, The Biotech Century, addresses the many critical issues accompanying the new era of genetic commerce. His 2004 book, The European Dream, was an international bestseller and winner of the 2005 Corine International Book Prize in Germany for the best economic book of the year.
Rifkin was recently in Athens, invited as guest speaker at the 3rd CEO Summit organized by the Hellenic Association of Management (EEDE). He delivered the following interview to our magazine.
Q: You presented a survey called “Leading the Way to the Third Industrial Revolution”. What does this 3rd industrial revolution mean?
A: 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. If we think of 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 fist 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 mountain ranges like the Pyrenées and Alps. We will snow disappear from Mount Everest 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. Hurricanes Rita and Katrina are cases in point. If we go two or three degrees more in temperature rise, the UN panel says we might see the potential extinction of between a third and over half of the species in life on earth. Now, put that in perspective. We’ve have 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. Human 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. Now the IEA says we could have a supply crunch by 2014. Some of the best geologists in the world have been looking at reserves figures with computer stimulation and they say we could 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; it leaves a very small window.
The problem now in the EU and also in the world is that everybody is frightened and 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 about upholding their obligation that requires 20% increase in energy efficiency, 20% reduction in global warming gasses and 20% increase in usage of renewable by 2020. And everyone is saying “Why me? How about you?”. As long as we see this as a punishment, everyone will continue resist sharing the burden. We have to turn this from an adversity to one of the 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 made the big economic revolutions in history and how to turn this into an opportunity?”, because we have a scientific diagnosis, but we don’t have an economic game plan.
Q: What is the role of Internet in this revolution?
A: New communication revolution organizes 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 civilization. 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 labor force, with division of labor. They had to have a storage and distribution system. It was the first prototype of industrial organization. They required a revolution of communication to organize the new energy regime called agriculture. The Sumerians created writing to organize their new energy revolution. In the modern era, Guttenberg’s print press and mass literacy converged with coal steam power to create the first industrial revolution. We couldn’t have managed and communicated the first industrial revolution with codex. In the 20th century, the creation of the telegraph and telephone in the early 1900s converged with oil and the Internet combustion to create 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 revolution in the last few years: personal computers, the Internet, satellite, etc. Today, a billion people can communicate with each other at the speed of light. We’re all connected to the central nervous system. Now, what I’m suggesting is that this communication revolution has a deeper mission. This distributed communication revolution is just beginning to converge with renewable energy. We’ve seen in terms of increasing IT, productivity, education and globalization. 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 realized. That potential lies in their convergence with renewable energy, partially stored in the form of hydrogen, to create the first “distributed” energy regimes. The 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 in the 21st century, as the first industrial revolution had in the 19th century and the second industrial revolution had in the 20th century. What is “distributed” energy? That’s the key.
Q: According to you, the third industrial revolution relies on three pillars?
A: 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 failing 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 maximize renewable energy and to minimize costs, it will be necessary to develop storage methods that facilitate the conversion on 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.
Q: 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 the cell batteries are still highly expensive. What do you think?
A: Yeah, sure, but it’s like the first cars, the first computers. We have to get to mass distribution. 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 the 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 half. 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 to 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 centralized television networks; if I had said everyone will be able to communicate with each other within 7 seconds and watch the same big television networks, etc; if I had sail 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 distributive energy revolution.
Q: But how and who will control everything?
A: The inter-grid is the next IT revolution. The software was developed in the US. We have software now, which allows you to take 10.000 of the 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 centralized 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 the 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 centralized nuclear power plants, coal or gas. The 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, the 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 her 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, communication in power grids and 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 inter-grid will allow that. A continent-wide, fully integrated intelligent inter-grid 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 EU 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.
Q: How long will it take to ensure all of this?
A: With the objective of 20% by 2020 and the need to construct all infrastructures etc., I would say between 2020 and 2050. The EU Parliament passed a written declaration in 2007, 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 the president of the European Parliament. Thus, the European Parliament became the first legislative body in the world to officially endorse the three pillar strategy to ushering 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 should 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 2009 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.
By: N. Peter Kramer
