Jeremy Rifkin is one of the most well-known thought leaders in the world. The American advises various governments, especially on energy issues. He was one of the first to recognize that electricity from renewable energies will be very cheap – if you do it cleverly.
A wall of books – what else could be in the background of Jeremy Rifkin’s office in the heart of Washington. The best-selling author, who has just published his latest book, The Age of Resilience, is Chair of the Foundation on Economic Trends and will be setting aside two hours for the video conference. He appreciates Germany and raves about the meetings with Angela Merkel. The future is made for small and medium-sized companies, as there are so many in Germany. For more than 20 years, Rifkin has advised the EU, as well as the governments of China and the USA – currently primarily on the topics of energy and resilience. Because Corona and climate change have shown that things cannot go on like this.
In your new book, you criticize the fact that people and companies have been oriented towards efficiency since the Industrial Revolution. What’s wrong with that?
Jeremy Rifkin: Companies have to be very lean. To give back to investors as much as possible, you don’t want to be managing too much inventory. Because then you spend money. But they don’t want to spend anything or have too many workers. They also don’t want to have redundant supply chains. Well, then the corona pandemic came along and that was a wake-up call. When Covid hit and everyone started yelling at each other: Where the hell are the masks, where are the ventilators? Where’s the toilet paper? And now we know where efficiency has taken us.
The toilet paper is back on the supermarket shelf. Is the situation really that bad?
Rifkin: Efficiency has nothing to do with the world we live in. This is an artificial product of the Enlightenment. As we entered the agricultural age and the industrial age, instead of adapting ourselves to nature, we began to adapt nature to us – and have exhausted it. So now we have to deal with climate change and in turn adapt to nature. And that means we have to change the way we think about business, how we raise our children.
You write: “Achievement becomes a substitute for satisfaction.” Rather, I believe that more and more people, especially young people, want the shortest possible route to success without wanting to take the hard route through performance. That weakens the resilience of a society, doesn’t it?
Rifkin: That’s a big problem and it’s also related to efficiency. Nobody wants to wait anymore. Children often no longer feel that anticipation is the great joy. Many people want more and more at shorter intervals and have less and less satisfaction. They don’t realize that anything valuable in the world means you have to work for it. But the theory of efficiency says to create more in shorter and shorter time intervals and at some point people become absolutely obsessed with their possessions and are not happy. But you can see from Japan that this is reversible.
Why Japan?
Rifkin: Japan was the first 24/7 society. People literally died at their desks. In the 1980s and 90s in particular, people worked around the clock. Some people then got up from their desks and started walking in nature. Others heard about it. Now all the people in the world are doing it, mainly in the Asian countries but also starting in Europe. You orient yourself again to your inner biological clock, which is good for your metabolism and cortisol levels.
Around the world, we are currently talking a lot about energy – one of their biggest topics. You have worked intensively with the EU and many other countries on developing renewable energies. What mistakes has Germany made?
Rifkin: Back then, there was a big incentive to build solar and wind turbines and microgrids. Everyone started doing it and then the price dropped. Then China came into play and continued to push the price down. I also worked there with the state leadership. The electricity suppliers in Germany didn’t see that coming. In 2014, I took part in a public debate at the invitation of the then Eon boss. He asked me what’s the problem? I said that sun and wind will soon be the cheapest forms of energy. A few more years and your business model will be outdated. He wasn’t concerned at the time, although around 92 percent of his electricity still came from nuclear power and fossil fuels. He didn’t really understand exponential curves.
Energy prices are currently rising dramatically. Production is becoming more and more expensive. How do we get into this beautiful world that you describe?
Rifkin: The current increases are a comparatively short-term phenomenon. The levelized cost of electricity from renewable energy actually fell below all others in 2019. They were below nuclear power, well below coal, oil and natural gas. And they keep falling, even exponentially. At some point marginal cost will be close to zero, probably between 2040 and 2050. We haven’t received a single bill from the sun or wind. Coal, oil and gas and uranium are damn expensive to mine. The fossil fuel industry is sitting on its last throne. Eleven trillion dollars in investor money has flown away from fossil fuels, mostly pension funds and insurance companies, because they will never recoup their assets.
But energy companies are currently making extreme profits. How do we bridge the change?
Rifkin: The big fossil fuel companies just keep what they have and raise the price to get more out of what they have left. It’s an endgame. It’s dangerous right now, but solar and wind are not only the cheapest energies, they’re the fastest moving, and in the developing world they’re moving even faster. There’s no need to worry about old agreements, regulations, standards, vested interests and all that. It’s going to be tough and there’s no guarantee that we’ll make that transition. There are all the forces that could prevent this. But the alternative is an extinction event like the last 65 million years ago – keyword dinosaurs.
Where will all the green electricity come from?
Rifkin: The new model is very different because utilities cannot produce all the electricity on their own. You can generate enough electricity from renewable sources, but half of that will be microgrids. Households will be utilities. It needs cooperatives, a structure of small, high-tech companies.
You write: Environmental services will create millions of jobs. Which ones and who pays for them?
Rifkin: In 2010 my team started a project in Texas. While the two newly built nuclear power plants ran out of control financially, we recommended wind and sun to them. And we included in the concept all the ranches that were Republican territory. For the farmers it is an additional source of income – and they can still grow their crops in the same way. It was similar in Michigan or in Kentucky and Tennessee. They all used to have these F-150 trucks, the second most popular product in the US after the iPhone. Today they all drive electrically.
Does that create millions of jobs?
Rifkin: It goes much further: In the USA, a third of the land area has to become overgrown so that the topsoil can regenerate. We have about 60 years of topsoil left because we exhausted it with our efficient chemical and biotech farming. There is no other way but to switch to ecological services. Carbon farming, reforestation – some of these are very technical jobs, but also for unskilled people. Either way: there is a need for millions of jobs – and that requires people with hands, no robot and no big data analysis can do that for us alone.
Mr. Rifkin, thank you for the interview.
The article “Why electricity will be free in 2040” comes from WirtschaftsKurier.
