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Business Officer Magazine

The EU’s Five-Pillar Sustainability Plan

Jeremy Rifkin, president of the Foundation on Economic Trends, has been an adviser to the European Union for the past decade and is the principle architect of the EU’s long-term economic sustainability plan to address what Rifkin calls “the third industrial revolution.” In a recent interview with Business Officer, Rifkin provided the following overview of that commitment.

By Matt Hamill

He calls it the third industrial revolution. In his book on the topic—The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World (Palgrave Macmillan, 2011)—Jeremy Rifkin points out that throughout history new energy regimes make possible more complex civilization, increased energy, and integration of more people into bigger units with more differentiated labor skills. That's happening now, with the rise of clean energy, and Rifkin wants to make sure the world gets the transition right. (See a detailed discussion of Rifkin's energy and economic theories in "The World Is Lateral," in the July-August issue of Business Officer.) 

But, he says, "The complexities of new energy regimes require new communication evolutions that are agile enough to coordinate and manage those regimes." Fortunately, the Internet has evolved to become that communication tool.

Summary of Third Revolution Retrofits

  • Achieve 20 percent renewable energy by 2020.
  • Collect energy everywhere there's human infrastructure.
  • Focus on hydrogen as a means of storage.
  • Create the energy Internet.
  • Establish transportation logistics, because electric vehicles are here to stay.

Another plus: "The energy sources are evenly distributed; they're everywhere," says Rifkin. "In terms of solar, 45 minutes of sunlight powers the global economy for a year. If we use 20 percent of the wind, we've got 7 times more power than the economy uses. Underneath the planet, we've got a hot geothermal core that can be converted to energy overnight. We've got rural agricultural and forest waste that can be converted to energy. We have ocean tides and waves on the coasts. So, we have enough distributed energy in every square inch of this planet to provide for our little species until the end of time."

But, how do we tap it? And what will result?

Multiple-Point Model

With Rifkin's guidance, the EU has made a formal commitment to a five-pillar third industrial revolution infrastructure, endorsed in 2007 and working its way through the commission. Germany and Denmark are far ahead, and the Scandinavian countries are moving in this direction.

What Rifkin and the EU have started is based on earlier work Rifkin did at Wharton and elsewhere, looking back at the sociology of the human journey. In this case, it's about understanding how economic revolutions occur, when two phenomena merge: communication and energy revolutions.

What's interesting about the third revolution (with green power and the Internet) is the distribution of power. Whereas fossil fuels were elite in terms of being located in only a few places, green power is collaborative and peer-to-peer—so it becomes lateral. Whereas elite resources (the most capital-intensive in history) require big military and geopolitical investments—and massive capital—what is converging now in Europe, says Rifkin, is a collection of energies that are distributed and organized collaboratively and scaled laterally. "We have to be able to finance both the communication and the energy regimes. And, then we have to vertically scale the factories, logistics, and transport to fit that vertical scale."

The EU's five-pillar infrastructure is designed to get there from here. The action points include the following:  

  • Achieve 20 percent renewable energy by 2020. Every region has to make it, although some are currently falling behind and some are way ahead.
  • Collect energy everywhere there's human infrastructure. "That means buildings," says Rifkin. "For example, we've got 191 million buildings in the EU. We're going to take every single existing building and convert it to its own personal power plant, with solar from the roof, wind from the side, geothermal heat from underneath. For new buildings, there's a beautiful positive-power office complex in the Paris suburbs, and many more are going up this year. Zero emissions, positive power. They soak up so much sun that they have all their needs met and can send a little bit back to the grid."

Pillar 2 jumpstarts the economy everywhere, because, to convert the infrastructure to micropower, that's millions of jobs for a 30-year buildout. Rifkin likes the scope to that of the interstate highway system. "Convert the existing ones; create the new ones."

The other analogy Rifkin points to is Steve Jobs and the computer whiz kids. In 1970, we had a few big, expensive mainframe computers, managed centrally from the top down. "These kids come along with the personal computer," says Rifkin, and now, with near-zero marginal costs, the cheap computers cost $40—and everyone is communicating.

"Similarly, we have a few power utility companies in every region of the world. They generate the power, we buy it. But, already in Europe, we've got several million buildings producing a little bit of green electricity on-site. Twenty years from now, we'll have several hundred million buildings around the world. Economists say it's an exponential curve, doubling the knowledge and halving the cost every few years, with solar and wind heading to parity. The next up will be geothermal. And, then biomass conversion."

And, just as the information Internet became cheaper and cheaper, within a 20-year span, renewables will have a similar cost curve. "After all," says Rifkin, "the sun is free, which is what scares the energy companies. The wind is free; geothermal heat is free; garbage-converting energy-it's all free."

  • Focus on hydrogen as a means of storage. "Without storage of intermittent energies, we lose three out of four kilowatts," admits Rifkin. "While we like all storage-batteries, capacitors, water pumping, air compressing, and so on-we put most of our focus at the center of all the storage: hydrogen. Our group is testing hydrogen storage right now, across the utility complex."
  • Create the energy Internet. "We're using off-the-shelf Internet technologies and transferring the power in transmission lines to a distributed smart grid," explains Rifkin. "Then, if you don't need some of the green electricity, your software can program so you sell it across that distributed energy Internet from Ireland to Russia. Just like distributing information: Store in digital mode, share online."
  • Establish transportation logistics, because electric vehicles are here to stay. "The five major auto companies will all be in production in 2015 and 2116 with fuel cell-powered vehicles," predicts Rifkin. "You will be able to plug in anywhere, get green electricity anywhere you park-a plug in every space. If the price is right, your computer will—even when it's not on—simply shift its green electricity or take its hydrogen fuel cell and transform it to electricity."

Slow and Steady Sustainability

Right now, these five pillars are mere components, admits Rifkin. It's only when you connect them and start to phase in the synergies that you have a general-purpose technology platform. "You have to put the whole infrastructure together, and right now that's difficult," he says. "For example, in Europe, Pillar 1 is going great, but we have regions that are at 30, 40, or 50 percent green electricity where we're losing three out of four kilowatts, because we have no storage. But, we haven't moved other pillars fast enough, so car manufacturers are panicked, because they're spending a lot to produce electric-powered vehicles."

So, we have to do all of it together-as we did during the second industrial revolution-with the pipelines, the highways, the automobiles, the electricity. "Then," says Rifkin, "you have an economic revolution. One that truly gives power to the people, literally and figuratively. It completely changes when you shift from vertically-scaled communication, energy, and infrastructure to a laterally-scaled approach. It changes the entire gestalt, culturally, politically, and socially. It's something the music companies didn't understand quickly enough about file sharing and newspapers did not understand about the blogosphere."

 MATT HAMILL is senior vice president, advocacy and issue analysis, at NACUBO.

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