Jeremy Rifkin is the author of The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth. He is the President of the Foundation on Economic Trends and TIR Consulting Group LLC, and is an adviser to the European Union, the People’s Republic of China and to heads of state around the world on Green New Deal-style transitions. He will be giving a public lecture at Innis Town Hall at the University of Toronto on November 19.
Our scientists tell us that human-induced climate change brought on by the burning of fossil fuels has taken the human race and our fellow species into the sixth mass extinction of life on Earth. While the Trump administration is at least up-front about its avowed commitment to exploit every possible opportunity to bring fossil fuels online for both domestic consumption and export, the Canadian government uses every public opportunity to flaunt its leadership in decarbonizing Canada and its prominent role in rallying the world to address climate change.
But when it comes to issuing permits and underwriting fossil-fuel projects, the Canadian government has missed no opportunity to be at the head of the pack. On the other hand, more than 460 Canadian municipalities have already called for urgent action to address climate change. The negative economic consequences of those misguided federal policies to keep the fossil-fuel spigot wide open are ominous, for both Canada and the world.
Facing a global climate emergency, younger generations of millennials and Gen Zs are spearheading an unprecedented planetary mobilization in support of a global Green New Deal to save life on Earth, and they are setting the agenda for a bold political movement with the potential to revolutionize society.
Let’s be clear about what is happening. This is the first planetary revolt of the human race in the 200,000-year history of our species on Earth. There have been untold social, political and economic protests throughout human history around religious differences, economic issues, governance and social grievances. Yet, the current uprising is of a different ilk.
Gen Z and millennial protesters have now walked out of classrooms and offices and onto the streets in the millions in approximately 150 countries in planetary strikes, marking the first time in history that a global cohort of human beings has identified itself as an “endangered species.” And this is the first generation that has begun to think of our fellow creatures as part of our evolutionary family and the biosphere as our indivisible community.
While the Green New Deal has become a lightning rod in the political sphere, there is a parallel movement emerging within the business community that will shake the very foundation of the global economy in coming years. Key sectors of the economy – information and communications technology; power and electricity; transportation and logistics; real estate – are fast decoupling from fossil fuels in favour of ever-cheaper solar and wind energies and the accompanying clean technologies, green business practices and processes of circularity and resilience that are the central features of a Green New Deal.
The levelized costs of utility-scale solar and wind installations have plummeted and are now below the cost of nuclear power, coal and natural gas. They are continuing to plunge, and the marginal cost of generating green energy is near zero: The sun and the wind do not send a bill.
New studies from across the financial sector are sounding the alarm that upward of $100-trillion in stranded fossil-fuel assets could create a carbon bubble likely to burst by 2028, causing the collapse of the fossil-fuel civilization. Already, more than $11-trillion has been divested or is in the process of being divested from the fossil-fuel infrastructure and related industries in what has become a stampede unparalleled in economic history.
Canada, currently the fourth largest producer of crude oil in the world, will be caught in the crosshairs, between the plummeting price of solar and wind, the fallout from surpassing peak oil demand and the accumulation of stranded assets in the oil industry. The marketplace is speaking, and Canada needs to establish a bold new economic vision if it is to adapt and prosper.
Every major economic transformation has required three elements, each of which interacts with the others to enable the system to operate as a whole: a new communication medium, a new power source and a new transportation mechanism to manage, power and move economic activity, social life and governance.
In the 19th century, steam-powered printing and the telegraph, abundant coal and locomotives on national rail systems meshed in a common infrastructure, giving birth to the First Industrial Revolution and the rise of urbanization, capitalist economies and national markets overseen by nation-state governance.
In the 20th century, centralized electricity, the telephone, radio and television, cheap oil and internal combustion vehicles on national road systems converged to create an infrastructure for the Second Industrial Revolution and the emergence of suburbanization, globalization and global governing institutions.
We are now on the cusp of a Third Industrial Revolution. The digitized broadband communication internet is converging with a digitized renewable energy internet, powered by solar and wind electricity, and a digitized mobility and logistics internet of autonomous electric and fuel-cell vehicles, also powered by green energy.
These three internets are continuously being fed data from sensors embedded across society that monitor activity of all kinds in real time, from agricultural fields, warehouses, road systems, factory production lines, retail stores and especially from the residential and institutional building stock. This technology is allowing people to more efficiently manage, power and move day-to-day economic activity and social life from where they work and live.
This is the Internet of Things (IoT). Buildings will be retrofitted for energy efficiency and then embedded with IoT infrastructure, allowing the habitats to serve as widely-distributed edge data centres that will increasingly replace today’s giant big-data centres. Smart buildings will also serve as green micropower-generating plants, energy-storage sites and transport and logistics hubs for electric and fuel-cell vehicles, all in a more inclusive zero-emission society.
The Third Industrial Revolution is being accompanied by a shift from globalization to “glocalization” as individuals, businesses and communities connect with each other around the world in digitally-integrated platforms and at very low fixed cost and near-zero marginal cost, allowing them to oftentimes bypass nation-state oversight and global companies that mediated commerce and trade in the 20th century. Glocalization makes possible a vast expansion of social entrepreneurship with the proliferation of smart high-tech small and medium-sized co-operative enterprises operating laterally in global networks. In short, the Third Industrial Revolution brings with it the prospect of a democratization of commerce and trade on a scale unprecedented in history.
Even if we were to upgrade carbon-based Second Industrial Revolution infrastructure, it would be unlikely to have any measurable effect on aggregate efficiency. Fossil-fuel energies have matured. And the technologies designed and engineered to run on these energies, such as the internal combustion engine and centralized electricity grids, have exhausted their efficiencies, with little potential left to exploit.
New studies, however, show that with the shift to an IoT platform and a Third Industrial Revolution, it is conceivable to dramatically increase aggregate energy efficiency over the next 20 years. This would enable a qualitative leap in generativity while we transition to a nearly 100-per-cent postcarbon renewable-energy society and a highly resilient circular economy.
The build-out of the Green New Deal smart infrastructure will involve every industry. The new smart sustainable infrastructure, in turn, makes possible the new business models and new kinds of mass employment that characterize the shift to a green economy.
Of course, the digital economy also raises risks and challenges, not the least of which is guaranteeing network neutrality to ensure everyone has equal access to the networks, protecting privacy, ensuring data security and thwarting cybercrime and cyberterrorism. How do we prevent nation-states from hacking into other countries’ social media and spreading misinformation to influence the outcome of their elections? How do we push back against giant internet companies becoming monopolies and commodifying our personal online data for sale to third parties for commercial uses? The dark side of the internet will require vigilant regulatory oversight at the local, provincial and federal levels.
The construction of a national smart grid across Canada – think of it as an energy internet – will serve as the backbone of the Green New Deal transformation. The electricity grid is moving from a fossil-fuel-based centralized system to a distributed electricity system, with potentially millions of solar- and wind-generation sites feeding in and off a smart, digitized, high-voltage nationwide power grid.
In the new system, every business, neighbourhood and homeowner becomes a potential producer of electricity, sharing surpluses with others on a smart continental energy internet using the same digital-driven analytics and algorithms we use to share information, news, knowledge and entertainment on the communication internet. The federal government of Canada should take the primary responsibility for financing the 10- to 20-year build-out of the smart national power grid – the energy internet – with the provinces and territories funding the remainder.
In addition to overseeing that build-out, the federal government will have to establish the codes, regulations and standards that will have to be legislated and aligned throughout the country. It must set targets for the provinces, and prioritize both federal incentives and penalties to push the transformation along.
Still, even though the federal government will need to oversee the deployment of the national smart grid, it should be made clear that the provinces and territories are primarily responsible for financing most of Canada’s infrastructure and will have to do much of the heavy lifting in the build-out of a Green New Deal zero-emission economy. The federal government, the provinces and municipalities will need to work in concert in adopting measures to speed the transition to smart green Third Industrial Revolution infrastructure and a postcarbon era.
Although some of the financing of the Green New Deal will come from tax revenue and the reprioritization of government budgets, much of the investment will come from institutional funds and, in particular, public and private pension funds – the largest pool of capital in the world, worth more than $40-trillion as of 2018.
The world’s largest pension funds are worried over climate change and the prospect of their investments remaining in a fossil-fuel industry beset by stranded assets, which could wipe out retirement savings of millions of workers. Funds of the world’s most populous cities are beginning to divest from the fossil-fuel sector and related industries that service or depend on it, such as the petrochemical industry. They would like to reinvest in government-issued “green bonds” and the opportunities that constitute the smart Third Industrial Revolution economy.
But the managers complain that the real problem is a lack of camera-ready large-scale Third Industrial Revolution infrastructure projects in which these freed-up funds might invest. Unfortunately, cities, regions and countries are still tinkering with thousands of small, unconnected pilot projects, with little initiative to scale a massive economic transformation.
Missing is the Third Industrial Revolution narrative that describes the “nervous system” that would connect all of these isolated projects. Infrastructure, at the deepest level, is not just an incidental appendage to commerce and social life. It is always new infrastructure that is the indispensable “extended prosthesis” that binds society together as a collective whole.
While the “invisible hand” of the marketplace is upending the 200-year dominance of the fossil-fuel civilization, it alone will not steer us into the Age of Resilience. Erecting a new ecological civilization from the ashes of a collapsed fossil-fuel economy will also require a collective response by Canada’s provincial governments and municipalities, which will have to take much of the responsibility for engineering, deploying and managing the Green New Deal infrastructure as a public trust.
Notwithstanding the fact that the Third Industrial Revolution infrastructure requires a smart national power grid – a digitally managed renewable energy internet – that can mediate and manage the flow of green electricity coming and going between millions of players in their homes, automobiles, offices, factories and communities, many of the actual infrastructure components that feed into and off that grid are highly distributed in nature. They are paid for and belong to millions of individuals and families, and hundreds of thousands of small businesses and local communities.
Every solar roof, wind turbine, nodal IoT building, edge data centre, storage battery, charging station, electric vehicle, etc., is an infrastructure component. The distributed and laterally scaled infrastructure of the Third Industrial Revolution is, by its very nature, fluid and open. This will allow literally millions of players to share data, energy, electric mobility, surveillance, news, knowledge and entertainment in an emerging zero-carbon “sharing economy." All will use component parts of the infrastructure where they live, work and commute, on continuously evolving digital platforms, overseen by Canadian cities, provinces and territories.
My firm’s experience over the past two decades in the European Union in crafting a Green New Deal-style transition might be helpful in understanding how best to ensure a quick deployment of a distributed Third Industrial Revolution zero emission economy in the provinces and municipalities of Canada. The global team from TIR Consulting Group LLC has worked with the EU in three regions to scale a wholesale infrastructure transition – Hauts-de-France, the Metropolitan Region of Rotterdam and The Hague, and the Grand Duchy of Luxembourg.
In each of those regions, the entire population was engaged in a public conversation leading to the establishment of a Green New Deal “peer assembly." Each assembly was made up of elected officials and approximately 300 representatives from local chambers of commerce, labour unions, economic development agencies, public and private universities, and civic organizations. These peer assemblies have been tasked with establishing Green New Deal roadmaps to transform their economies and communities into a postcarbon era.
Peer assemblies are not focus groups or stakeholder groups but, rather, a cross-section of the public, with peers rotating in and out of the assemblies, ensuring that the citizenry at large will be involved in the continuing deliberations of proposals and the deployment of large-scale Third Industrial Revolution infrastructure over decades.
It’s important to stress the timetable for ushering in a Green New Deal and the transition into a smart Third Industrial Revolution to address climate change. The juvenile infrastructure for the First Industrial Revolution was laid down across the United States in 30 years, between 1860 and 1890. The juvenile infrastructure for the Second Industrial Revolution was built out in 25 years, between 1908 and 1933. (Canada’s first and second Industrial Revolution infrastructure transition timetable roughly paralleled that of the United States.)
The Third Industrial Revolution infrastructure can likely be built out in Canada in less than 20 years – a single generation – by building off the two industrial revolution infrastructures that preceded it and that are still partially in place to facilitate the transition. By the late 2030s, Canada should be fully transitioned into a zero-emission postcarbon economy.
The Age of Resilience is now before us. How we adapt to the new planetary reality that faces humanity will determine our future destiny as a species. We are fast approaching a biosphere consciousness. We need to be hopeful that we can get there in time.