The great transformation: the Green New Deal for Spain, part II

This is the second part of an article from Jeremy Rifkin about the “green new deal.” Click here to read the first part in English.

We need to realize that there is a gaping difference between FDR’s New Deal of the 1930s and the present Green New Deal movement spreading across the world. The original New Deal was financed and managed largely by massive centralized federal government programs. It isn’t going to happen the same way this time. The build-out of a Third Industrial Revolution infrastructure requires a very different political approach.

The transition to a green Third Industrial Revolution infrastructure requires a very different business model than the typical public-private partnerships

We traditionally think of infrastructure as overarching centralized platforms, financed at considerable expense by governments, and laid down for use by the public at large – road systems, electricity and telephone lines, power plants, water and sewage systems, airports, port facilities, etc. All well and good. While the Third Industrial Revolution infrastructure requires a smart national power grid – a digitally managed Renewable Energy Internet – that can mediate and manage the flow of green electricity coming and going between millions of players in their homes, automobiles, offices, factories, and communities, many of the actual infrastructure components that feed into and off that grid are highly distributed in nature and are paid for and belong to literally millions of individuals, families, and hundreds of thousands of small businesses.

Every solar roof, wind turbine, nodal Internet of Things building, edge data center, storage battery, charging station, electric vehicle, etc., is likewise an infrastructure component. Unlike the bulky, top-down, and static one-way infrastructures of the First and Second Industrial Revolutions, the distributed and laterally scaled infrastructure of the Third Industrial Revolution is, by its very nature, fluid and open, allowing literally millions of players to share data, energy, electric mobility, surveillance, news, knowledge, and entertainment, in an emerging “sharing economy” et al., using their own component parts of the infrastructure where they live and work and while they commute, in continuously evolving digital platforms.

Much of the smart infrastructure, then, is going to come online because of the generous national, regional, and municipal tax credits, grants, low-interest loans, and other incentives made available to millions of homeowners and apartment-dwellers as well as hundreds of thousands of businesses, combined with increasingly aggressive penalties for non-compliance of carbon-reduction targets, coupled with the exponentially falling cost curve of the green infrastructure components and processes.

The transition to a green Third Industrial Revolution infrastructure requires a very different business model than the typical public-private partnerships in which public infrastructure is handed over to giant global companies to own and manage. Horror stories abound of governments entering into agreements with private companies to privatize infrastructure – substandard performance and management, cost overruns, asset stripping to maintain profits, and bankruptcies. The overriding interest of corporations that are privatizing the public infrastructure is to look out for their bottom line first, which invariably means making cuts wherever and whenever they can in the name of reducing costs, but ultimately at the expense of the efficient operation of the infrastructure they are charged with building and managing.

There is, however, an alternative course that would allow Green New Deal public-private partnerships to flourish, and it has a twenty-five-year track record of success. The business model is the “energy service company” (ESCO). It’s a radical approach to conducting business that relies on what’s called “performance contracting” to secure profits and is a counterintuitive business method that upends the very foundation of seller/ buyer markets – a key underlying principle of capitalism.

The Third Industrial Revolution brings with it the prospect of a democratization of commerce and trade on a scale unprecedented in history

Performance contracts do away entirely with seller/buyer markets, replacing them with provider/user networks in which the ESCO takes 100% of the responsibility for financing all of the work and secures a return on its capital investment based strictly on its success in generating the new green energies and energy efficiencies being contracted.

This is a new breed of capitalism that blends a social commitment into its very business plan. The ESCO is continuously in pursuit of new technologies and management practices that will return its investment, and the community benefits from this in a number of ways: cheaper utility bills for their homes and businesses; clean renewable energy to power their homes and businesses at near-zero marginal cost; green electricity to power electric and fuel-cell vehicles; a less-polluted environment to advance public health; and new business opportunities and employment, with the revenue and benefits recirculating back into the community to enhance its economic and social wellbeing.

The new performance-contracting model is a hybrid affair, in which both the control over the build-out of the new infrastructure and its ownership remain in the hands of municipal, county, and state governments as public commons serving the general welfare of communities, while shifting responsibility to private ESCOs to shoulder the financial responsibility to ensure the success of the erection and management of the infrastructure. The “buyer beware” in seller/ buyer markets gives way to the provider “doing well by doing good” in provider/user networks.

This more inclusive and participatory engagement in commerce, trade, and social life, made possible by a distributed and smart post-carbon Third Industrial Revolution platform, is being accompanied by a shift from globalization to “glocalization” as individuals, businesses, and communities connect with each other all over the country and around the world in digitally integrated platforms and at very low fixed cost and near-zero marginal cost, allowing them to oftentimes bypass nation-state oversight and global companies that mediated commerce and trade in the 20th century. Glocalization makes possible a vast expansion of social entrepreneurship with the proliferation of smart high-tech small and medium-sized enterprises blockchained into laterally extended cooperatives operating in networks circling the world. In short, the Third Industrial Revolution brings with it the prospect of a democratization of commerce and trade on a scale unprecedented in history.

The shift from globalization to glocalization is partially reversing the locus of responsibility for the workings of the economy and the affairs of governance from the nation-state to the regions. In the glocal era, “regional empowerment” will be the battle cry. Every region and municipality in Spain, and indeed every locality around the world, can be relatively self-sufficient in its green-power generation and resilience. The sun shines everywhere, and the wind blows everywhere. While some regions will be more blessed with ample amounts of solar and wind at any given time of the day, week, month, or season of the year, the surplus electricity can be stored and later shared with other regions experiencing lulls, guaranteeing more than enough energy to power society across continental landmasses.

The fear of climate change is very real, and the conditions for living on Earth are going to deteriorate far into the future and beyond our current imagination

Glocalization also comes with a paradigm shift from “Geopolitics” and the massive weaponization that went hand-in-hand with nation states securing and protecting fossil fuel assets in a world divided by national borders, to “Biosphere Politics” and the sharing of solar and wind energy in an increasingly borderless “Ecological Civilization.” The point that needs to be emphasized is that climate events and the rewilding of the planet are not bound by national borders. In the new era, we have come to understand that everything each of us does in our own neighborhoods and communities spills over national borders and affects everyone else in the world, our fellow creatures, and the ecosystems that we inhabit. That said, in the Age of Resilience, every community will be responsible for stewarding life in its nineteen kilometers of the Biosphere.

The fear of climate change is very real, and the conditions for living on Earth are going to deteriorate far into the future and beyond our current imagination. Municipalities, regions, and the national government will all have to be engaged in a political process without a closure date. Climate change is going to require the ongoing engagement of the entire body politic. No single elected official or head of a government agency is going to be able to go it alone. The model that comes to mind is disaster response and relief during emergencies. The entire community comes together in these dire moments and often for extended periods of times – local organizations, NGOs, religious bodies, schools, neighborhood associations, and the business sector – to address the crisis. Between disasters, civil society organizations and the business community are in continuous collaboration with public authorities, learning from past emergencies, sharing best practices, and introducing new response mechanisms into the planning for future climate disruptions.

Climate change now puts every community in the world in harm’s way in a continuous disaster mode. This means that in the Age of Resilience, everyone is engaged in a new kind of lateral “peer governance” and will need to take a collective responsibility for stewarding their portion of the biosphere and securing their community’s well-being.

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 shorter time is due, in part, to the fact that the Second Industrial Revolution infrastructure was able to build on a First Industrial Revolution infrastructure already in place. The Third Industrial Revolution infrastructure can likely be built out in less than 20 years – a single generation – by building off the two industrial revolution infrastructures that preceded it and that are still partially in place to facilitate the transition.

Living off the fossil fuel deposits of the carboniferous era for more than two centuries gave us a false sense of an open-ended and unlimited future

Please do not let anyone tell you this can’t be done. By the late 2030s, we should be there if each and every one of us pulls our own weight and carries our own load, with grit and determination, as part of a community, nationwide, and global commitment.

The Green New Deal is not just about mobilizing the public to pressure governments to loosen the purse strings, pass legislation, and incentivize green initiatives. Rather, it’s the first call for a new kind of peer political movement and commons governance that can empower entire communities to take direct charge of their futures at a very dark moment in the history of life on Earth.

Living off the fossil fuel deposits of the carboniferous era for more than two centuries gave us a false sense of an open-ended and unlimited future where everything was possible and with little price to pay. We came to believe that we are the masters of our fate and that a passive Earth is here for our taking. We failed to see that there is always an entropy bill for whatever takes place on this planet. We called this era the Age of Progress. Climate change is now the bill come due. We are entering a new epoch and a new journey. The Age of Resilience is now before us. How we adapt to the new planetary reality that faces us will determine our future destiny as a species. We are fast approaching a biosphere consciousness. We need to be hopeful that we can get there in time. This is the Green New Deal I believe in.

Jeremy Rifkin is the author of 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 advisor to the European Union, the People’s Republic of China, and heads of state around the world.