BOOK REVIEW: A clean green industrial revolution

The Third Industrial Revolution: How Lateral Power Is Transforming Energy, the Economy, and the World by Jeremy Rifkin

“OUR industrial civilization is at a crossroads. Oil and the other fossil fuel energies that make up the industrial way of life are sunsetting, and the technologies made from and propelled by these energies are antiquated,” explains author Jeremy Rifkin.

He is a lecturer at Wharton business school on new trends in science, technology, the economy and society, but more impressively is also a consultant to the European Union and the Chinese government on these issues.

This book is a description of the convergence of new communication technologies with new energy systems to create the Third Industrial Revolution. The first two industrial revolutions profoundly changed history, but came at a huge social and environmental cost.

The First and Second Industrial Revolutions forged the course of the 19th and 20th centuries. These revolutions were based on fossil fuels - coal, oil and natural gas, which are found only in specific places. As such, these places require geopolitical management, and often significant military investment to secure access to them. This necessitated a centralised energy infrastructure which set the tone for the rest of the economy and social life for two centuries.

The First Industrial Revolution had as its centrepiece coal-powered, steam-driven machines. The railroad was one of its most important achievements, with profound consequences. Building a railroad required more capital than even the wealthiest families of the day could afford single-handedly. This led to the need to concentrate the capital of investors, which resulted in the separation of ownership from the management of the business.  

The challenges of running a railroad were unique. Hundreds of miles of track had to be laid, rail beds had to be maintained, engines and carriages repaired, and systems developed to prevent accidents and extensive up-to-the-minute records. This required layers of management and a gargantuan workforce with output optimised through top-down command and control, and tasks broken down into fixed, repeatable stages.

The railroads led to other necessary businesses like the telegraph industry, which also had to be huge. Other mass-producing giants appeared with centralised factories to reduce the cost of production. For example, small farms gave way to agri-businesses that transformed food production into a factory system.

An army of people who could write reports and write critical management documents was needed. The school system was organised along the same lines as businesses, with top-down management, fixed tasks and outcomes to best prepare a literate workforce for life in large, centralised, authoritarian businesses.

“The centralized and rationalized business model established during the First Industrial Revolution, carried over to the Second Industrial Revolution (the Oil Age.)” Rifkin explains.

Enf of the Oil Age

The character of the oil industry has been gigantism and centralisation, because it too required large amounts of capital, economies of scale, and a top-down command and control structure. The Oil Age required the most expensive organisation ever conceived to collect, process, and distribute its energy.

Gigantism and centralisation affected other industries too: modern finance, automotive, power and utilities, telecommunications and commercial construction.

“In the coming half century, the conventional, centralized business operations of the First and Second Industrial Revolutions will increasingly be subsumed by the distributed business practices of the Third Industrial Revolution.” This is the core message of this book.

“We have the science, the technology, and the game plan to make it happen,” says Rifkin and, working at the highest levels of the world’s largest economies, he is in a position to know.

Hundreds of millions of human beings can now generate their own green energy in their homes, offices, and factories. They can share it with others across intelligent, distributed, electricity networks - ‘an intergrid’ - just as they do with the information they create and share on the internet.

Here are some facts Rifkin presents: the cost of photovoltaic electricity is expected to decline at a rate of 8% a year, halving the cost of generation every eight years. The commercial growth in solar and wind technology is as dramatic as the growth in personal computers and internet use, with installations doubling every two years.

One hour of sunlight provides enough power to run a global economy for a full year. Forty percent of the roofs and 15% of all the building facades in the EU are suitable for photovoltaic applications.

The United States has enough wind resources to power the entire nation several times over. A Stanford University study of global wind capacity estimates that harnessing 20% of the available wind on the planet would provide seven times more electricity than the world now uses.

Hydropower currently makes up the largest portion of green-generated electricity in the world, but the untapped potential is in small distributed hydropower installations.

The geothermal energy beneath the Earth’s surface reaches 4 000 degrees Celsius, and that energy is continuously flowing to the surface. In the United States, the geothermal energy within two miles of the Earth’s surface produces enough energy to provide for America’s needs for 30 000 years.

Biomass includes fuel crops, forestry waste, and municipal garbage. The World Bioenergy Association claims that “the world’s bioenergy potential is large enough to meet the global energy demand in 2050”.

Conventional energy (coal, oil, gas, and uranium) employed 260 000 in Germany in 2003, whereas renewable energy by 2007 accounted for 249 300 jobs. Put differently, less than 10% of the energy produced by renewable sources created nearly as many jobs as all other energy sources combined.

The Spanish economy, which supports over 188 000 renewable energy jobs and 1 027 renewable energy companies, has produced five times the employment of the conventional energy industry.

We have the ability to change from a carbon-based fossil fuel energy regime to a renewable energy regime. We can reconfigure the buildings of the world, and transform every house into a mini power plant that can collect renewable energies on site. We are able to store the renewable energy so that we can ensure a continuous, reliable supply of green electricity to meet demand. Using internet communication technology, we can convert the electricity grid into an intelligent utility network.

Millions of people will be able to send the green electricity they generate on their buildings to the grid to share with others, just as information is generated and shared on the internet.

We are seeing the movement of cars, buses, trucks and trains to electric plug-in and fuel cell vehicles powered by renewable energies. We are seeing charging stations across countries where people can buy and sell electricity on the distributed electricity grid.

The emerging Third Industrial Revolution is a function of distributed renewable energies that will be collected at millions of local sites and then aggregated and shared with others. These renewable energies are found everywhere and are partially free - sun, wind, hydro, geothermal heat, biomass, and ocean waves and tides. 

We are now able to achieve optimum energy levels and at the same time maintain a high-performing, sustainable economy.

These are exciting times and they have already begun.

Readability:     Light ----+ Serious
Insights:        High +---- Low
Practical:        High ----+ Low

* Ian Mann of Gateways consults internationally on leadership and strategy and is the author of Strategy that Works. Views expressed are his own.

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