How might current EU and Chinese initiatives anticipate an American Green New Deal? How might a federalized 21st-century Green New Deal most closely resemble and most conspicuously depart from 20th-century federal government New Deal interventions? When I want to ask such questions, I pose them to Jeremy Rifkin. This present conversation focuses on Rifkin’s book The Green New Deal: Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth. Rifkin is an economic and social theorist, writer, public speaker, political advisor, and activist. His 20 books, translated into more than 35 languages, address the impact of scientific and technological changes on the economy, the workforce, society, and the environment. His most recent publications include: The Zero Marginal Cost Society (2014), The Third Industrial Revolution (2011), The Empathic Civilization (2010), The European Dream (2004), The Hydrogen Economy (2002), The Age of Access (2000), The Biotech Century (1998), and The End of Work (1995). He is an advisor to the European Union, the People’s Republic of China, and heads of state around the world.
ANDY FITCH: Instead of first speculating on what an American Green New Deal might look like, could we start with your work on Green New Deal-transitions already getting implemented in other countries? We could introduce an EU approach coalescing, in its first decade, around binding targets for significantly enhanced efficiency, expanded renewable-energy supplies, ever-increasing emissions reductions — all facilitated through a provisional tariff regime designed to foster green economic sectors and make them competitive. We could discuss China scaling up efforts to secure the well-being not only of its own vast population but of a broader human population. But most broadly, which aspects of these two respective models for conceiving, implementing, and refining a Green New Deal seem the most and the least exportable to our own context, the most worth emulating and the most telling cautionary tales on what to avoid?
JEREMY RIFKIN: I consider the Green New Deal-style transitions currently underway in the European Union and the People’s Republic of China to be applicable anywhere around the world. In terms of my work with Europe, I started advising the leadership of the European Union back in 2000. I’ve advised the past three European Commission presidents: Romano Prodi, José Manuel-Barroso, and Jean-Claude Juncker. In 2005, Chancellor Angela Merkel invited me to Berlin during the first few weeks of her new government to help her address questions of how to move the German economy forward and stimulate new employment opportunities. The first question I asked was: “Madame Chancellor, how can you move the German economy forward when your businesses are plugged into an old Second Industrial Revolution infrastructure made up of centralized telecommunications, fossil fuels and nuclear power, and internal-combustion road, rail, water, and air transport — and when the aggregate efficiency (the ratio of useful to potential work) of that infrastructure peaked a decade earlier in Germany and industrial countries around the world?” I told the Chancellor at that first meeting: “You can have market reform, labor reform, fiscal reform, and create all sorts of start-ups, but it won’t make a bit of difference as long as those businesses remain plugged into a dying Second Industrial Revolution infrastructure.”
But I also said to the Chancellor: “We also have a second problem. After two centuries of fossil-fuel-based industrial activity, we now face unprecedented real-time climate change.” Chancellor Merkel, of course, was very aware of this, very cognizant of the fact that we are at a turning point for the survival of the human species and for our fellow creatures as we face the disruption of the Earth’s ecosystems and a human-induced mass-extinction event. So on that first day, the Chancellor and I discussed a zero-emission Third Industrial Revolution: a convergence of digital communication, renewable energy, and autonomous mobility and logistics that could manage, power, and move the German economy in the 21st century. At the end of that day, Chancellor Merkel said: “We will have this for Germany, Jeremy, and we will also have this for the European Union.”
My office was then exploring how to create mandates for increased energy efficiency and reduced global-warming emissions, as well as how to accelerate the use of renewable energy across Europe. We worked with the European Commission to develop a European Parliament resolution calling for the 20/20/20 formula. This formula required all EU member states to increase their energy efficiency by 20 percent, reduce their global-warming emissions by 20 percent (based on 1990 levels), and increase their generation of renewable energies by 20 percent by the year 2020. Once this formula was passed, all the EU member states had to set up feed-in tariffs, with a pricing premium to help establish solar and wind operations — which encouraged literally millions of players to form renewable-energy cooperatives. Small businesses, local neighborhoods, and farmers associations all over Europe started forming cooperatives. They received bank loans, which would be repaid through the energy they generated and could then sell back to the electricity grid at above-market price. This encouraged technological and business innovations that reduced the fixed and marginal costs of solar and wind technologies. Today, Germany gets 40 percent of its energy from renewables. This percentage is projected to jump to 65 percent by 2030, and hopefully one hundred percent before 2040.
In terms of my work with the People’s Republic of China, Li Keqiang, the Premier, mentioned in his biography that he had read my book The Third Industrial Revolution, and had instructed the Chinese government to follow up on both the narrative and the central themes in the book for deploying an historic paradigm transformation. I’ve had four official visits to China over the past several years to meet government leadership. I’ve engaged especially with Vice Premier Wang Yang, who currently holds the fourth most powerful position in the Chinese government’s Standing Committee. We’ve helped develop a similar Third Industrial Revolution plan for China. The Chinese have quickly reduced the cost of solar and wind energies, and now they’ve become the world’s top producer of solar and wind.
Here we start approaching what your book’s subtitle describes as the imminent collapse of “the fossil fuel civilization,” and what your introduction repeatedly characterizes as a “climatic showdown” soon to come with the fossil-fuel industry. The Green New Deal points to a scenario in which trillions of dollars (perhaps one hundred trillion) of carbon assets, related infrastructure investments, and supporting enterprises will emerge as the greatest bubble in market history (and with the US currently the leading oil-producing nation). Could you flesh out a few concrete examples of what it might look like for corporations, for whole countries, for shareholders and citizen stakeholders (and for all of the industry’s advocates and enablers in government and across our culture) as this “Great Disruption” gets triggered — perhaps less due to any moral crusade than to “the marketplace speaking,” with a renewables-driven economic model simply starting to outperform a carbon-driven model?
A broader historical narrative about infrastructure transitions might provide helpful context. When a country with an older, outdated infrastructure transitions toward a new paradigm, it has to grasp how infrastructure creates both the opportunities and the constraints that determine new business models, new employment, new patterns of governance, and new temporal-spatial orientations. There have been at least seven major historical shifts in economic paradigms as a result of infrastructure transformations. Each shift involves three technology innovations that fundamentally change how a society manages, powers, and moves its economic activity, its social life, and its governance: a new communications medium, a new power source, and a new form of transportation. This particular combination of innovations transforms the nature of business, governance, the built environment, and even a society’s narrative and worldview.
Let me cite two examples, the First Industrial Revolution in 19th-century Britain, and the Second Industrial Revolution in the 20th-century US. In both cases, a convergence of communications, energy, and mobility fundamentally reshaped society. For the British, steam-powered printing provided a big leap forward from the old German manual printing presses, allowing for the mass production of textbooks for the public-school systems just beginning to be established. Cheap newspapers, magazines, journals, and brochures also appeared around this time. The Brits then laid out a telegraph system that transformed the way people communicated across the British Isles. At the same time, the Brits began to use coal as their primary energy for powering steam engines, and then used the same steam engine to power a revolutionary new type of transportation in the form of locomotives and railroads, quickly transforming Britain from a localized agrarian economy to a big national market. This technological revolution also changed the built environment. The modern era’s first major industrial cities emerged, again changing spatial-temporal orientations as horses and carriages were replaced by locomotives. National markets gave rise to nation-state governments.
A Second Industrial Revolution emerged in America in the 20th century. It began with the introduction of the telephone. I like to remind people who think of the Internet as so revolutionary that the telephone truly came out of nowhere. After two hundred thousand years, homo sapiens suddenly started talking into this device to someone thousands of miles away. Do you know the word “phony”?
I think of Holden Caulfield.
The term actually comes from people at first not believing that the voice on the other end of the line was a real person. They thought: This has to be a magic trick. But soon after, the US became the first nation to really start moving telephone communication across the country.
The US was also the first major nation to roll out widespread electricity. The discovery of an abundant new source of energy (cheap Texas oil) allowed Henry Ford to put Americans into Model T automobiles. National communications started taking place not just through the telephone, but also through radio and then television — with all of the new marketing potential that accompanied these new media. The Second Industrial Revolution then took the US from dense urban life to more spread-out suburban environments with interstate highways, shopping malls, travel and tourism, and entertainment.
The tipping point that began the Great Disruption of this Second Industrial Revolution came in July 2008, when oil reached $147 a barrel on world markets and the global economy shut down. This was the great economic earthquake of our fossil-fuel civilization. The collapse of the financial market 60 days later was more of an aftershock. People have to remember that today fossil fuels are used in the production of almost everything, including fertilizers, pesticides, food additives and preservatives, construction materials, packaging, synthetic fiber, pharmaceutical products, power, transport, heating, lighting, and the like. Track oil, and you track our whole civilization.
But as of this year, we see that the levelized utility-scale costs of solar and wind energies have dropped far below nuclear energy, far below oil, far below coal, and even below natural gas. That last point really signals the acceleration of this Great Disruption. As countries moved off dirty energies like coal, and off of nuclear because of the higher cost, they turned to cheaper natural gas as a slightly cleaner fossil fuel. But with solar and wind energies now being cost-competitive with gas, and even cheaper in many parts of the world, and as we move toward a digitized Energy Internet using big-data analytics to manage the output of millions of players producing their own solar and wind power, even gas-fired power plants are no longer competitive and will be increasingly abandoned. With improved sharing capabilities, distribution channels, and storage to deal with the intermittency of solar and wind, natural-gas plants, coal plants, and even some nuclear plants will be stranded. They’ll never be able to pay back their 30-year to 40-year amortizations. The European electricity utilities have already lost several hundred billion dollars. And we’ll see the same magnitude of loss in transport and other industries as electric vehicles become cheaper than internal-combustion vehicles by the mid-2020s.
Many fossil-fuel deposits, for which corporations have purchased long-term exploration rights, will never be extracted out of the ground or from the ocean bed. The pipelines designed to move these assets will be stranded. The refineries used to transform petrochemical products will be abandoned. The gasoline stations will go out of business or need to change their business model. The list of disrupted industries and stranded assets just goes on and on, extending far beyond the fossil-fuel industry. In 2015, Citigroup reported that we could see a hundred trillion dollars in stranded fossil-fuel assets across virtually all industries, the largest bubble in history. The Economist Intelligence Unit more recently projected as much as 40 trillion in stranded assets. Whatever the final dollar amount, it will mean a massive disruption like we’ve never before seen.
So here and elsewhere you isolate a basic market mechanism through which marginal costs (and corresponding profits) for producing certain goods will become so low that norms of capitalist production-consumption will yield to new paradigms of sharing (or at least licensing): with ownership giving way to access, with sellers and buyers giving way to providers and users (as we see, say, with today’s ride-hailing services replacing 20th-century car ownership), and with this sharing revolution becoming “the cornerstone of an emerging circular economy, allowing the human race to use far less of the resources of the Earth while passing on what they no longer use to others and…dramatically reducing carbon emissions.”
I began to see this shift back in 2000, just before the Dot Com bust. In economics, we teach that in optimum market conditions, you sell at the marginal cost. In other words, you find ways to put out goods and services at the lowest possible price, to win over consumers and build market share, in order to send back profits to investors. But we just never anticipated a technology revolution (in this case, the digital revolution) in which efficiencies could actually reduce the marginal cost to near zero. When you get that low, profit margins begin to shrink, which requires a shift away from more traditional capitalist behavior.
We tend to think of markets as transactional, with a seller and a buyer coming together at a moment in time to transfer a good or service. Then the seller starts over again, which brings new expenses in advertising, marketing, logistics, warehouse downtime, etcetera. This type of pacing fits a 20th-century Second Industrial Revolution, but doesn’t fit the speed of today’s Third Industrial Revolution bringing together a digitized Communication Internet, a digitized Renewable Energy Internet, and a digitized Mobility and Logistics Internet. And when the margins get exceptionally low, we have to move from transactions in seller-buyer markets to flows in provider-user networks, from ownership to access, from productivity to regenerativity, from externalities to circularity, and from GDP to quality-of-life indicators.
In provider-user smart networks, industries and sectors are replaced by “specialized competencies” that come together on platforms to manage the uninterrupted flow of goods and services — returning sufficient profit, even at low margins, through the 24/7 continuous traffic across the system. Margins for some goods and services, however, shrink so close toward zero that profits are no longer viable even in capitalist networks, because the goods and services produced and distributed are nearly free. This is already occurring and giving rise to a new phenomenon, the sharing economy.
We now see on any given day hundreds of millions of people producing and sharing their own music, their own social blogs, and their own news media. They take college courses taught by the best professors through MOOCs. They contribute to the world’s knowledge base on Wikipedia, one of the world’s most trafficked websites. All of this happens for free, without any direct financial transaction. None of this shows up in the GDP. Of course the Ubers and Airbnbs of the world operating at near-zero marginal cost can make you pay to get on their site. But we also see movements toward a sharing economy with the proliferation of digitally driven high-tech cooperatives, benefit corporations, and nonprofit organizations — all emerging in a fast-growing sharing economy that exists beyond conventional capitalist networks.
What will it look like for even energy production to enter this sharing economy?
Already with the Energy Internet, millions of people produce their own solar and wind power, while the fixed costs plummet. We hear the market speaking, and it really makes little difference what the fossil-fuel and nuclear industries (and their lobbyists) do at this point. Unless you outlaw these new technologies, you can’t stop the fixed cost and marginal cost of solar and wind energies across Europe and China from soon approaching near zero. The sun and wind have never sent us a bill [Laughter]. Coal, oil, gas, and uranium, by contrast, are quite expensive to extract, to ship, and to refine. And how will US firms ever compete with German firms plugging in to this Third Industrial Revolution infrastructure that provides energy at a diminishing fixed cost that keeps dropping lower, and a marginal cost that is near zero?
What possibilities still exist for sharing-economy cartels to monopolize, instrumentalize, and / or degrade biospheric resources in self-interested fashion? Or what other significant snags could you see potentially interrupting a quite fortuitous convergence of the Third Industrial Revolution and the Green New Deal?
Well I actually see Third Industrial Revolution infrastructure as distributed by design. Networks made up of high-tech SMEs (small to mid-size enterprises) engaged in cooperatives will operate across virtual and physical platforms. Capitalist societies engineered the First and Second Industrial Revolution infrastructures to be centralized, top-down, and proprietary (enclosed in intellectual property). With fossil-fuel energy being so expensive to produce and assimilate, vertical integration was needed to return sufficient revenue to investors. Likewise, all of the other industries that rely on expensive fossil fuels in their product lines and services had to vertically integrate their operations into giant centralized companies to return sufficient profits. So we ended up with 500 global companies (many of whom my office works with today) accounting for around a third of the world’s GDP, even though they only employ about 67 million workers out of a workforce of 3.5 billion people. That gives some idea of how our Second Industrial Revolution infrastructure shapes today’s inequalities.
I also see this sharing economy as hybrid. It is the first new economic system to emerge on the world stage since capitalism in the 18th century and socialism in the 19th century. Everyone under the age of 40 knows that the Third Industrial Revolution infrastructure is optimized when you keep it open and transparent (without intellectual-property protections), and scale it laterally in order to get the network effect. The more people who freely join these virtual and physical networks, the more everyone benefits. This creates a different frame of reference not just for economic models, but also for governance models.
Could we pause then on your most expansive definitional conception of all that “infrastructure” might mean in this present context, as “the indispensable ‘extended body’ of a new body politic”? If we hope for lived Third Industrial Revolution temporality to focus less on instantaneous / discontinuous economic transactions than on durable, sustainable partnerships and commitments and mutual responsibilities towards one another, what various types of innovative infrastructure initiatives will help take us there? And how might the laterally directed, ever-democratizing, both hard and soft infrastructure of a Green New Deal help to break us out of siloed ecological endeavors, disciplines, communities — and to bring broadly cohesive civilizational change to scale?
First, let’s talk about governance. For example, in the First Industrial Revolution, national markets brought about nation states. The Second Industrial Revolution, with its container ships and air travel, brought us global markets and accompanying global institutions — with the United Nations, the OECD, the IMF, the World Bank, and WTO playing key roles in mediating commerce and trade between nations. Today, we are witnessing the shift from a Second Industrial Revolution centered on globalization to a Third Industrial Revolution centered on “glocalization.”
From almost any locality, smart SMEs can engage with potential business partners virtually and physically, all over the world, at very low fixed costs and near-zero marginal costs. SME cooperatives often don’t require big global corporations as mediators, and soon glocal connectivity will include distributed power grids and smart mobility networks that can stretch across whole continents. This Third Industrial Revolution infrastructure results in a massive shift in political power. It doesn’t mean the end of the nation state, but it does mean that nation states become more like intermediaries between localities, regions, and emerging continental collectivities. Glocal engagements tend to democratize economic activity. Any Millennial or Gen Z now possesses the inexpensive technological capacity to establish their social-entrepreneurial enterprise on a glocal scale.
However, there is the nagging question of how to deal with the looming Dark Net. I often wonder about how we will maintain network neutrality as the world becomes increasingly connected. I worry about governments’ enhanced capabilities to dominate their own citizens and to interfere with other governments’ elections and operations. We must ensure that Internet, ICT, and telecom companies cannot monopolize these fields and commodify our data and make us subject to algorithmic governance that undermines our agency. We must protect individual privacy while also preventing cyber-terrorist attacks. Across the European Union (often first on a local or regional level), we’ve moved on all these questions, and we’ve put a considerable amount of money, time, and resources into collectively establishing codes, regulations, and standards to reign in the Dark Net.
Let’s pivot back then to a US context for a minute, particularly on questions of federal governance, and of federalism more generally. Your book makes clear that this latest “New Deal” does not simply echo 20th-century calls for big-government (specifically federal-government) intervention. So let’s say you needed to present to skeptical conservatives (turned off not only by the FDR-resonant phrasing, but by suspicions that Democrats seek to exploit acute climate-change concerns to push a much more comprehensive left-leaning political agenda) the most persuasive possible rationale for supporting, in both all of its immediacy and all of its breadth, some form of a Green New Deal. How closely would your own policy agenda overlap with visions that might circulate, say, in this fall’s Democratic presidential primary debates? And what innovative physical and political infrastructure might you recommend as one next step towards getting this Green New Deal scaled up in the US — again perhaps less as some top-down federal-government initiative than as a federalized initiative: conceived and customized by localities to fit their distinct circumstances, then digitally connected with other regions across the country and ideally even across national borders?
We see a number of proposals at the federal level that align with this book. If you take Alexandria Ocasio-Cortez, or 350.org, or Sunrise, or Bernie Sanders and Elizabeth Warren, I don’t think they’d have a problem with the book’s basic proposals. However, I’d start from the fact that in the US, the states themselves own 93 percent of the infrastructure. No one ever discusses this in the typical Green New Deal conversations. 75 percent of our Third Industrial Revolution infrastructure transformation will be deployed by the states and localities. Again, none of our presidential candidates talk much about this — let alone President Trump.
Of course the federal government will play a primary role in establishing regulations and standards, and in ensuring operability and overall alignment of this new smart infrastructure across the country. When necessary, the federal government will have to provide its own generous “carrots” and onerous “sticks.” The federal government will also play a major role in constructing a new high-voltage national power grid (the Energy Internet), just as it did with the interstate highway system in the latter half of the 20th century.
As we continue discussing decentralized and localized conditions, what proactive steps would you recommend taking to support the countless Second Industrial Revolution communities soon to find themselves feeling even further left behind? What best models can you point to — for instance with Germany’s thoroughly conceived “just transition” compensation initiatives for whole regions, as it phases out coal? And how to bring those particularly personalized engagements likewise up to scale?
Every community will need to move from a geopolitical frame of reference to a biospheric frame of reference. We still have this post-Westphalian political and corporate model, with every nation as sovereign, and every sovereign citizen of each nation competing with every other citizen for scarce resources in a zero-sum game. Likewise, governments compete with other governments for scarce resources in the marketplace and often on the battlefield. But today, we need every single community to take responsibility for its 19 kilometers of the biosphere stretching from the stratosphere to the ground. That’s where the Earth’s spheres (the atmosphere, lithosphere, hydrosphere, magnetosphere, and biosphere) interact, creating the conditions for life on Earth. Every region has to be responsible for the stewardship of those 19 kilometers, and for adapting to climate change. We need to connect vertically with the biosphere (in all of its complexity) where we live and work, and then need to connect laterally with everybody else across landmasses to share resources in a distributed, regenerative, and circular global economy.
This also means that every locality has to figure out how to address its own vulnerabilities. Today, we see the fires in the Amazon and watch the lungs of the planet burning. Today, we see floods from the Missouri and the Mississippi rivers for three months every year, leaving whole towns evacuated and without the proper conditions to rebuild. Today, the floods, droughts, wildfires, and hurricanes are becoming the “new abnormal,” no matter where you live. Humans have never experienced a convergence of climate catastrophes like this. The Earth is rewilding in ways we can barely comprehend.
As a result, humans have never faced a greater need to build resilience into every aspect of community life, including in our institutions and our social relationships. We’ll have to be in a disaster mode at all times. During disasters, governments lateralize, and citizens reach out through their churches, their local neighborhood organizations, their NGOs, and the business community — with individuals voluntarily helping each other. Everybody gets involved during climate emergencies. Now we see cities around the world starting to institutionalize all of this, so that even between emergencies we can keep learning and adapting and engage the entire citizenry.
By extension, The Green New Deal describes your consulting team’s on-the-ground realization that Green New Deal decision-making should be “compatible with the distributed, open, and laterally scaled infrastructure being deployed.” And more generally, The Green New Deal articulates an urgent prioritization on speeding up (scaling up: better coordinating broader technological, economic, and cultural shifts), even while reinforcing glocal, federalized, peer-to-peer engagement. So when do these drives towards all-encompassing civilizational change and towards sustainable subsidiarity produce significant tensions, and what to do about those tensions?
We talk about establishing lateral governance that is quite different from stakeholder groups or focus groups. TIR Consulting Group LLC operates in several European regions right now. We are currently on the ground in Hauts-de-France, in northern France. This is the country’s coal-mining region, its Rust Belt, and its industrial base, with 10 percent of the national population. We are also working in the 23 cities from Rotterdam to The Hague (the petrochemical complex of Europe), and in Luxembourg (one of Europe’s financial capitals). In each of these regions, we’ve started at a granular level. When the leadership in Hauts-de-France first came to our consulting group, they asked: “Can you do a grand plan for us?” I said: “No, we can’t, because it will sit on a shelf or maybe produce a couple of pilot projects.” Municipal and regional leaders always proudly display their bike paths, their hydrogen buses, and LEED buildings, but nothing really changes at a higher level.
I told the president at the time of Hauts-de-France: “If you can line up every political party, every mayor across all local jurisdictions, all the Chambers of Commerce, all the labor unions, all the NGOs, all the universities, and they all agree to work together on this 30-year infrastructural initiative, then come back to us.” I didn’t think he would, but he did! So we brought in some of the world’s best minds in the fields of energy efficiency, renewable-energy technologies, construction, advanced fabrication manufacturing, engineering, economic modeling, urban planning, architecture, real estate, information-and-communication technologies, power and utilities, and transport and logistics. We spent 10 months collectively preparing a road map, with broad participation from the community. TIR Consulting Group provided a Third Industrial Revolution infrastructure blueprint, but local citizens had to fill this in and customize it to their region’s particular needs.
Several thousand people took part (at least indirectly), with 300 individuals in “peer assemblies” that met with our team. These peer assemblies crossed social boundaries, bridging the business community, civil society, and academia. Members of the peer assemblies served as sort of an informal extension of government, conceiving this comprehensive infrastructure deployment for themselves and their children and grandchildren. Six years later in Hauts-de-France, we have over 1200 projects providing new businesses and employment in the erection of a Third Industrial Revolution infrastructure, the centerpiece of a Green New Deal transformation.
And you know how this happened? The people themselves have taken the lead. Think of the rural electric cooperatives during the Great Depression. The federal government said: “We’ll give you the TVA’s energy, but you’ll need to build out the electricity lines.” And the rural communities did it on their own.
Here we also broach questions of how much this Green New Deal will cost, who will pay for it, how it will get financed, how the money will get spent. First, in terms of financing these federalized initiatives, could you point to the role to be played by the largest pool of concentrated capital in world history — today’s pension funds? Could you flesh out some fortuitous possibilities at present as funds divesting from carbon seek to move their investments elsewhere (not just to risky small-scale pilot projects, but to precisely the types of sturdy long-term infrastructure investments that state and local governments will most need)? Could you touch on a few pivotal conceptual adjustments prompted (hopefully) by this age of escalating climate change: with fund managers reconfiguring what fiduciary responsibility and appropriate private / public stewardship might look like, and with tens of millions of individual stakeholders more self-consciously investing their savings “in their countries’ future…protecting the rights of workers to organize, securing reliable returns… and spurring… the transformation of their nations’ infrastructure in the emerging green era”?
As you suggested, as of 2017, global pension funds were worth over 41 trillion dollars, and had become the world’s largest source of capital. Hundreds of millions of workers have had a part of their wages set aside for investment for their retirement. But when coal-mining corporations started going bankrupt because of competition with cheaper natural gas (and even cheaper renewable energies), the coal companies left their workers’ pension funds penniless. The miners suddenly had no money for their retirement. And now, more broadly, 41 trillion dollars in retirement holdings face the biggest disruption in world economic history, potentially leaving millions of workers without their earned retirement savings. So what will happen to these trillions of dollars invested in what are quickly becoming stranded assets? The big public pension funds, and other investment funds, have started divesting very quickly. Currently, more than 11 trillion dollars have either been divested or are in the process of being divested.
Pension funds and other investment funds are begging localities to green light large-scale Third Industrial Revolution sustainable-infrastructure projects (in which these funds can invest their workers’ earnings, and can ensure a steady return based on the aggregate efficiencies that will result from this deployment and scale-up). That puts the onus on states, cities, and counties to step up to the plate and develop Third Industrial Revolution roadmaps — to identify and prioritize large-scale infrastructure projects in which these trillions of dollars of pension funds can invest via green bonds issued by green banks.
Let me be very clear about the timetable for ushering in a glocal Green New Deal and the transition into a smart Third Industrial Revolution. 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. The Third Industrial Revolution infrastructure can likely be built out in less than 20 years — a single generation. Please do not let anyone tell you this can’t be done.
Photo of Jeremy Rifkin by Michael Krees.