The third industrial revolution

Jeremy Rifkin

The global financial crisis has shaken the very foundations of our economic systems.  It has demonstrated that our models of economic growth, based on high-consumption and heavy use of scarce resources, are no longer sustainable. Now is the time to move towards new modes of production. The way out of the crisis is to kick-start the third industrial revolution, which will also lead to a more sustainable economy for the future.

This revolution will be achieved through creating systems for decentralised renewable energy-use. The same design principles and smart technologies that made the internet possible are starting to be used to reconfigure the world’s power grids so that people can produce and share renewable energy, just like they now produce and share information. The four pillars of the third industrial revolution will be:

The first pillar: renewable energy
Renewable forms of energy – solar, wind, hydro, geothermal, ocean waves, and biomass will be key in the new economics. Progressive leaders need to establish targets for renewable energy and set in motion the process of vastly enlarging the renewable energy proportion of the energy mix of their economies.

The second pillar: buildings as positive power plants
While renewable energy is available and new technologies are allowing us to harness it more cheaply and efficiently, we need infrastructure to load it. Progressive leaders need to ensure that millions of buildings – homes, offices, and other buildings– are renovated or constructed to serve as both power plants and habitats. These buildings will collect and generate energy locally from the sun, wind, garbage, agricultural and forestry waste, ocean waves and tides, hydro and geothermal – enough energy to provide for their own power needs as well as surplus energy that can be shared.

The third pillar: hydrogen storage
In order to maximise usage and minimise costs, it will be necessary to develop storage methods that facilitate the conversion of intermittent supplies of these energy sources into reliable assets.  While batteries, differentiated water pumping mechanisms and other media provide limited storage capacity, hydrogen is the universal medium that can “store” all forms of renewable energy to ensure a stable supply. Leaders need to institute research and technology initiatives to speed the process of commercial introduction of hydrogen technology.

The fourth pillar: smartgrids and plug-in vehicles
Power grids need to be reconfigured, along the lines of the internet, allowing businesses and homeowners to produce their own energy and share it with each other. The new smart grids or intergrids will revolutionise the way electricity is produced and delivered. The electricity produced could also be used to power electric plug-in cars or fuel cell vehicles. The electric plug in vehicles, in turn, will also serve as portable power plants that can sell electricity back to the main grid.

Just as second generation information systems grid technologies allow businesses to connect thousands of desktop computers, creating far more distributed computing power than even the most powerful centralised computers that exist, millions of local producers of renewable energy, with access to intelligent utility networks, can potentially produce and share far more distributed power.

The shift to a Third Industrial Revolution infrastructure will require a massive public-private financial commitment. Laying out the new infrastructure will cost hundreds of billions of dollars. This may seem difficult at a time of crisis, but is even more essential to get our economies back on track.  Those that argue that we can not afford it need to explain how they expect to re-grow a debt-ridden global economy dependent on a failing energy regime.

The Third Industrial Revolution will bring with it a new era of “distributed capitalism” in which millions of existing and new businesses and homeowners become energy players. In the process, we will create millions of green jobs and dramatically increase productivity, while also mitigating climate change.

Jeremy Rifkin is president of the Foundation on Economic Trends in the US