Jeremy Rifkin: “The Third “
(AP Photo/Thanassis Stavrakis)
U.S. economist Jeremy Rifkin speaks during the 23rd congress of the Socialist International at the Lagonissi Grand Resort, about 40 kilometers (25miles) south of Athens on Monday, June 30, 2008.
I found this article on National Public Radio, on the web page of the Diane Rehm Show. It was originally broadcast on Tuesday, September 27, 2011 at 11:06 a.m on WAMU 88.5 American University Radio. I really liked what Mr. Rifkin had to say, and hope you enjoy reading my take on it.
Jeremy Rifkin the internationally renowned U.S. economist, founder and president of the Foundation on Economic Trends (FOET), is a social critic and author who advises the European Union on climate change, and energy security. He has authored “The Hydrogen Economy,” “The Biotech Century”, “The End of Work”, and his latest “The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World”
In this insightful interview Diane Rehm speaks with guest speaker Jeremy Rifkin about the five pillars of the 3rd Industrial Revolution and “Lateral power … side-to-side power” and how this could suggest some solution to revive the ailing US and Global economy. Rifkin explains how internet technology and renewable energy are merging to change the way we live and work. The full transcript of this show can be read at the The Diane Rehm Show website at –
So here is my summary of the article and the interview folks. I hope you Enjoy this! Also, please let me know your Pointaview on the economy, green energy and the future.
- Listen to the full Audio Broadcast of the original show
- Read the comments (41) on the original article
- Read the full Transcript of this broadcast
- Order a CD of this show on the NPR website
In his new book titled “The Third Industrial Revolution,” Rifkin says the global economy will face more meltdowns followed by shorter and weaker recoveries as long as it relies on fossil fuels. He contends that the solution to this problem lies in “the democratization of energy.”
Rifkin explains that modern civilization is the result of the two prior industrial revolutions, the first in the 19th century, and the second in the 20th century. All the greatest socioeconomic changes in history have occurred because new energy revolutions have converged with new communication revolutions. When these come together, it changes the way society lives.
- In the 19th century, print technology became very cheap; public schools were introduced, and we created a mass workforce with the literacy skills to organize the complexities of a coal and steam-powered revolution.
- In the 20th century, the telephone, and later radio and TV, was absolutely essential to organize a very complex auto-oil and suburban age.
- These two prior industrial revolutions – and particularly the oil revolution – provide us with a framework to understand the global economic problems we face now.
The most recent world economic crisis occurred in July 2008. When oil hit $147 a barrel, prices for every other product imaginable went through the roof simply because our whole civilization is either made out of and/or moved by fossil fuels.
When the price of oil went over $80 a barrel all other prices on the supply chain went up as well and with oil at $147 a barrel, people stopped buying. The net result was that the engine of the global economy slowed and near shut down.
That was the economic earthquake – hitting the oil peak-price; the collapse of the financial market 60 days later constituted the aftershock of that “oil-quake”.
Because of the July 2008 crisis Rifkin recons we now know the outer limits of the global fossil fuels economy. The economic oil peak-price growth threshold is at about $150 a barrel after which point markets hit the wall. The reason for this threshold is something called “peak oil per capita“, which is related to “global peak oil production”, but a little bit different.
Peak oil per capita occurred in 1979, and there’s no controversy about this. Ever since 1979 that figure has been in sharp decline. “Peak oil per capita” is the amount of oil everyone would get if all the global oil reserves were distributed evenly amongst everyone on earth. More resources have been found since 1979, but the global population has increased at a greater proportion.
When China, India and the other BRIKS countries made a bid in the 1990s to bring half of the human race into the economic game, the upward demand pressure on oil supplies was overwhelming, and subsequently oil peaked at $150 a barrel. After the crisis, when the world economy virtually stopped, oil prices went back down to $30 a barrel simply because there was very limited economic activity.
In 2010, the world started to replenish inventories; economies started growing again, and markets tried to crank back up to the boom levels prior to 2008. The net result is that oil prices immediately shot back up from $30 to $100 a barrel. Crude oil today is at around $106 per barrel and again all commodity prices are increasing, purchasing power is plummeting, and the financial engine is slowly grinding to a halt.
Rifkin believes every attempt to regrow the economy at the same rate as before July 2008 will cause oil prices to flare up, which will cause all other prices to increase, which will then cause purchasing power to decline, and that will inevitably cause a new economic collapse-cycle to begin.
He says the global economy faces a very dangerous and unstable period over the next 30 years, with the possibility of markets seeing repeated cycles of growth and collapse, growth and collapse. The solution to this threat lies in figuring out how to move to a new energy regime and a new economic paradigm that frees us from dependance on volatile fossil fuels.
In his book, “The Third Industrial Revolution,” Rifkin talks about the five pillars of the restructuring plan of the Third Industrial Revolution. “Here are the five pillars as we’ve laid them out,” Mr. Rifkin said. “This is the formal plan of the European Union. I was privileged to develop the plan, it was endorsed by the European Parliament in 2007, Germany is leading by far in this plan, the leading exporting power in the world, and here are the five pillars.”
- Pillar one, lies in exploiting all possible renewable energy forms – in a decentralized fashion – wherever they are found;
- Pillar two, buildings and structures become their own independent power plants;
- Pillar three, energy is stored with hydrogen;
- Pillar four, merging internet technologies with new distributed energy generation to create a nervous system infrastructure for the new energy economic paradigm;
- Pillar five is electric plug-in transport.
These pillars are based on the premise that great revolutions occur when communication revolutions emerge to actually organize the complexity of new energy regimes.
Over the past two decades we’ve seen this very powerful Internet communication revolution. What’s interesting about the Internet is that it’s distributed and collaborative by nature, and that the power of the internet is lateral. This sounds like an oxymoron, lateral power, because we generally think of power as top-down like a pyramid. But lateral power suggests side by side power which is more powerful because of synergy by collaboration.
Rifkin contends that in this respect, as distributed Internet communications start to organize distributed energies, we will have a very powerful third industrial revolution that could change the future of the human race.
Pillar one: – The EU is committed to 20% renewable energy by 2020. That’s a mandate. Every one of the 27 states has to fulfill that. That’s one fifth of the electricity of Europe has to be green by 2020.
Pillar two: – The challenge is how to collect these distributed renewable energies, because the sun and the wind and the geothermal heat and the garbage and the ocean tides and forestry waste, etc. one can find some renewable energy in every square inch of the world.
First ideas on energy collection focused on large centralized energy production projects that could be linked by high voltage power lines. That stemmed from the old 20th century energy generation paradigm which centralized around resource deposits like coal, oil, gas, and uranium; old ways of thinking.
As renewable energies are found in every square inch of the world in some frequency or proportion, why only collect that energy in a few central points? PARADIGM SHIFT!
The #1 user of energy in the world is buildings; the number one cause of climate change is buildings. The second pillar paradigm switch suggests converting building into suppliers of energy instead of users of energy.
In the EU, there are an estimated 191 million buildings, and the goal is to convert every single building into its own micro power plant over the next 30 years; To collect the sun on the roof, the wind off the side walls, the heat under the ground, etc.
Germany is way ahead of the game in that they achieved EU pillar one goals of 20% renewable energy in May 2011, ten years ahead of time, and they’re heading to 35% renewable electricity in just nine more years.
Germany has an interesting plan; they put a “feed-in tariff” in place. Customers, who convert to renewable energy, get a premium price if they sell energy back to the grid – they get a higher price than the normal energy price. Electricity bills are raised just slightly, so small it’s negligible, but the funds raised are used to install solar or wind generators for early adopters
In this way all over Germany, and now across Europe, buildings are being converted. Many of the new buildings are actually energy neutral and energy positive, being 100% self-sustaining and even over producing and selling energy back onto the power grid.
With pillar two it is hoped to jump-start the European economy; Millions and millions of jobs as thousands of small and medium-sized enterprises have to convert those 190 million buildings to micro-power plants over the next 40 years. These micro-power plants are like the difference between main frame computing and desktop computing; the 20th century paradigm was centralized power, now in the 21st we have smaller scale micro-power generation on every building on every street.
Pillar three: – Power energy storage has traditionally been cost prohibitive and inefficient. The sun isn’t always shining in Germany, or in Europe, or here, and the wind isn’t always blowing when you need the electricity. These are intermittent energies, so we have to store them. The EU has committed to invest into all the viable storage technologies – batteries, flywheels, capacitors, water pumping, etc. However, the big Euros are being put into hydrogen; an eight billion Euro commitment of public/private funds in the next few years, because hydrogen is the basic element of the universe. It carries other energy. It’s modular so one can use it for small homes and big factories.
How it works is that extra electricity not need at the moment is put into water. Due to electrochemical interaction Hydrogen is released and captured. When needed, the collected Hydrogen is then used as fuel to generate electricity at a very small thermodynamic loss.
Pillar four: – This is the most interesting pillar where the internet communication revolution completely merges with new distributing energies to create a nervous system, an infrastructure for a new economic paradigm. Using off-the-shelf internet technology, the power transmission lines of the US, Europe and the world, are converted into an “energy internet” that acts exactly like the other internet. Hereby, when millions of buildings are collecting green energy on site, and storing the excess in hydrogen, the software can interconnect users to share power resources across entire continents. Just like we now produce digital information, store it in the cloud, and share it online over social media networks.
In Germany, six test sites have been set up by the federal government; Scientists have connected appliances – like washers and dryers — to the distributed transmission grid so they may know what every washing machine, every thermostat, every air conditioner is doing across an entire region. In this way supply and demand can be managed on a larger and smaller scale level. Scientists are also testing weather conditions on the software so each customer will know the change in weather conditions and how that could affect the use and cost of energy. Consumers will also have moment by moment information on energy prices so as to help manage when to get off the grid, or when to sell energy back to the grid.
Pillar five: – Electric plug-in transport and the electric vehicles came out last year. Fuel cell hydrogen vehicles are coming out — this is a done deal — in mass production by Daimler, General Motors and the other car companies in 2014. Soon consumers will be able to plug vehicles in anywhere on the grid, to either top-up or if the price is right, to sell generated energy back onto the grid.
These five pillars together represent the new technology platform. These are the keys to Rifkin’s new economic infrastructure and The Third Industrial Revolution.
In America we keep saying we need infrastructure, we keep talking about new infrastructure. The key however is to NOT ONLY focus on mending the old 20th century infrastructure paradigms; those old energies and technologies are pretty well exhausted. The challenge is to use the five pillars to create the new infrastructure for a 21st century third industrial revolution.
Will we rise to the challenge…