Jeremy Rifkin: “A Global Green New Deal”

Roberto Palea
Member and Former President of the Centre for Studies on Federalism

Jeremy Rifkin

“The Green New Deal. Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth”

St. Martin's Press, 2019

The latest book by Jeremy Rifkin, the renowned economist and futurologist from Cornell University in New York, President of the Foundation on Economic Trends in Washington, and adviser on environmental and climate matters to the European Union, China and other public authorities, whose work focuses on the relationship between the evolution of science and technology and economic development, the environment and culture, is entitled “A Global Green New Deal”.

As our readers will know, Rifkin has worked with the Federalists – also through his close Assistants, such as Angelo Consoli, based in Brussels – in numerous debates and public seminars on the effects of global warming

In the subtitle of his most recent book, Rifkin says he will look at “Why the Fossil Fuel Civilization Will Collapse by 2028, and the Bold Economic Plan to Save Life on Earth”.

This book is also very interesting because it provides a description of the proposal made by a large group of representatives of the US Democratic Party (among them Bernie Sanders and Alexandra Ocasio Cortez, who are running for the democratic candidacy in the next US presidential election) for the launch of a global Green New Deal in the US, accompanied by impressive documentation supporting their arguments.

Rifkin bases his assertions on the certified opinions of the world's leading research institutes and independent investment banks, such as Lazard, according to which the levelized production costs (depreciation, useful life, zero marginal cost) for industrial-scale solar installations have plummeted to 36 US dollars/megawatt hour, while wind has fallen to 29 US dollars/megawatt hour, making them cheaper than gas, coal and oil plants, and nuclear reactors.

And this decline in the production costs for solar and wind installations is set to become so steep that within eight years solar and wind will be far cheaper than fossil fuel energies, and this will be clear for all to see.

As a result, the free market and free competition will drive entrepreneurs and investors out of the fossil-fuel-based sector of the economy into the alternative energy sector.

This will lead to the risk of the bursting of a massive carbon bubble, because institutional and non-institutional investors, led by pension funds (with 25,400 billion US dollars managed by US pension funds), will rapidly abandon the traditional energy sector to enter the green economy.

Anyone who remains invested in the fossil fuel industry when the carbon bubble bursts will suffer incalculable financial losses.

Fossil fuel power plants will become stranded assets. We can already see the signs of this (consider the change in attitude to alternative energy sources by the big “oil companies” such as ENI, ENEL, and TOTAL; the proposed merger between FCA and PSA aimed at the production of electric vehicles; the stock exchange listing of Saudi Aramco and the sale on the market of 1% of its capital to be invested in solar power installations).

This is why governments need to immediately promote a Green New Deal by investing, over the next 20 years, in infrastructure for the green revolution and the organization of a just transition for this transformation (which will involve massive employment of semi-skilled, skilled and professional labour and will affect every sector, from mobility, to the upgrading of buildings, to urban restructuring for the creation of smart cities).

The Green Revolution will need to involve all the countries of the world, which means that the Green New Deal will need to be Global.

Civil society movements around the world are mobilizing, and among them Rifkin cites the European Federalist Movement, with which he has built up a successful partnership since the year 2000.

The EU will be the institution that will need to guide the industrial transition to the use of renewable energy, because it has shown its willingness to do so since the adoption of the 20-20-20 Directive of 2007, whose goals have, overall, been fully met.

According to Rifkin, the Green Revolution will require radical changes in the infrastructure sector.

The entire nuclear energy and fossil fuel infrastructure will need to be dismantled and transformed, adapting it to the needs of solar, wind and other renewable energy.

The outdated centralised electricity grid will need to be reconfigured and become an internet of renewable, digital, distributed, smart energy.

The transportation and logistics sector will need to be digitized and transformed into a GPS-guided and autonomous Mobility Internet, made up of smart electric and hydrogen vehicles powered by renewable energy and running on intelligent road, rail, and water systems.

Buildings will need to be retrofitted to increase their energy efficiency and be equipped with renewable-energy-harvesting installations to become micro power-generating plants, which also incorporate energy-storage technologies.

An Internet of Things platform will be created on top of these internet networks that will connect the human and natural environment in a global distributed intelligent network, through trillions of sensors.

Ownership of the physical infrastructure will be mixed: public/private at every level of government, starting with the cities, held by public entities and private and social capital.

This public-private sharing will prevent social inequalities, rent seeking, and the accumulation of wealth in the hands of the few, promoting a fairer distribution of wealth.

Finally, Rifkin draws up a Plan for the United States, consisting of twenty-three key themes and initiatives that need to be enjoined simultaneously to begin the ecological transition.

These include the imposition of an across-the-board aggressive rising carbon tax; the elimination of fossil fuel subsidies; a series of incentives in the form of tax credits and/or long-term financing by the federal, state, municipal, and county governments to support the transition to the use of renewable energy, through market mechanisms; and finally, in the 23rd point, the proposal that the US government join the European Union, the People's Republic of China and all other nations willing to work together to agree on a set of universal codes, regulations, standards, and incentives and penalties to enable global interconnectivity and transparency in the joint creation of the local and global green economy.

Rifkin's book is certainly interesting, although it also contains a number of overly futuristic proposals, which do not take into account the inevitable resistance from the extremely powerful “oil company” lobbies and from the countries' governments, which tend to have a “short-term” outlook that favours the interests of their respective national communities over the general interest of the citizens and of future generations.

Indeed, the fate of any ecological transformation of the economy will be determined by the countries of the world.

Is Rifkin optimistic about the future?

I leave to the readers to make their own judgement, bearing in mind that, in concluding his 23-point Plan, Rifkin states that the new President and US Congress elected in 2021 should enact the laws to implement that Plan (clearly counting on the fact that Trump will be defeated and the democratic candidates will be victorious in the next presidential elections).