A Third Industrial Revolution for Norway
Norway’s wealth and prosperity over the last four decades has been built on oil, but Jeremy Rifkin, a futurist and social and economic thinker, says it’s time for the country to change. The Third Industrial Revolution is coming, and Norway needs to abandon fossil fuels and move towards a greener future that relies on renewable energy, shared transport and ultra-efficient housing.
Jeremy Rifkin, adviser to the European Union and German Chancellor Angela Merkel, has five words of advice for Norway about its petroleum reserves: “Leave it in the ground.”
Rifkin’s advice might not seem that welcome in a country that is celebrating fifty years of an industry that has contributed NOK 11 000 billion to Norway’s GDP, according to the Norwegian Petroleum Directorate.
But on Tuesday Rifkin is the keynote speaker at the 6th annual Lerchendal Conference, where politicians and top-level policymakers from Norway’s industries, government, labour unions and academia meet to learn about and craft potential directions for the country’s future growth.
The theme for this year’s conference is “Change Agents for Green Growth.” The conference is organized by NTNU and SINTEF along with the Research Council of Norway and Tekna, the Norwegian Society of Graduate Technical and Scientific Professionals. Other participants in this year’s two-day conference include Jonas Gahr Støre, leader of Norway’s Labour Party, Anita Krohn Traaseth, CEO of Innovation Norway, Karl Johnny Hersvik, CEO of Det norske oljeselskap ASA, and Gunnar Bovim, NTNU’s rector.
Jeremy Rifkin says the 3rd Industrial Revolution is coming, where microenergy generation and shared transport reduce our carbon footprint and make our lives greener. But will Norway take a leadership role in making this transition? Photo: Nancy Bazilchuk/NTNU
Rifkin says the Internet is allowing societies across the globe to make a transition to a new industrial revolution that will bring changes to our lives that will be as profound as those that resulted from the steam engine, the telephone and the computer. This new revolution, powered by the ability of the Internet to allow us to communicate, share and monitor things, will result in what he calls the “zero marginal cost society,” where the cost to create consumables such as energy and information – the marginal cost – is nearly free after the initial capital investment is made in equipment such as computers, smart phones and solar cells.
The old way of doing business, with big centralized power companies and industries that are totally reliant on fossil fuels, is over, he says. His suggestion for countries like Norway, which are tightly tied to oil, is simple: “Develop an exit strategy.”
The Internet of Things
An important part of this coming revolution is what futurists, including Rifkin, call “the Internet of Things”. The backbone of the Internet of Things are monitors and devices – roughly 11 billion now, growing to an estimated 50 billion in the next five years – that feed information to the Internet, allowing us to monitor everything from the temperatures of our refrigerators to the output of solar panels on our homes, and to run them in the most optimal way possible.
Companies that want to make the transition to this Third Industrial Revolution will need to find a way to make money to help people manage and optimize their use of this information, because once an initial investment is made in a product, the information or energy it produces will be nearly free, and the Internet will enable us to share in an optimal way. It’s happening now, he says, and is disrupting existing businesses – think Airbnb, or car-sharing services found in the USA, like Uber.
Why shouldn’t every house be able to generate its own electricity like this house in Germany, and share what’s left over on the grid? Social theorist Jeremy Rifkin says it’s not only possible but necessary if we are going to avoid the calamity of climate change. Photo: Thinkstock
While this may seem like a pipe dream, Rifkin says it’s already happening in Europe, right around the corner from Norway, in Germany, Denmark and northern France.
100 per cent renewable by 2050
Rifkin’s vision of this new economy was formally endorsed by the European Parliament in 2007. And as an adviser to Germany’s Chancellor Merkel over the last decade, he’s seen renewable energy grow in that country so that now it provides 27 per cent of the country’s electricity. Germany is on track to produce 35 per cent of its electric power from renewable energy by 2020 and 100 per cent by 2050, Rifkin said.
A key development has been the plummeting costs of technologies such as solar cells. The cost of a watt of electricity from a solar panel in 1978 was US $68, he said, but now one watt of electricity from a panel costs US $0.66, “and it is headed to near-zero marginal cost,” meaning the cost of producing energy after paying for the initial investment is essentially negligible.
“There is no nuclear power plant, no coal, no oil-fired power plant that can compete with this,” he said. “The sun does not send a bill to Germany. The wind does not send a bill to Germany… it is all over for fossil fuels.”
A road map for change
Rifkin says what Norway needs now is a national road map with provisions for the country’s major urban areas to make the transition to a new, digital future where communities generate their own power, share their electric vehicles and live in super-insulated efficient buildings.
“This will create lots of business opportunities,” he said. “Telecom, cable, ICT, electric power…there will be a lot of jobs just building out the infrastructure,” from wiring up plugs along the nation’s byways to recharge electric cars to beefing up insulation in houses so that every home is as efficient as possible.
“Norway could be a leader in this,” he said. “It will create a more prosperous Norway, a more ecological society. It will create a more sustainable Norway…. why would you just rely on becoming a one-resource economy with fossil fuels whose days are numbered? There is a lot of entrepreneurship here, and a real sense of community. You have the cultural DNA. (But) when you begin to rely on a one-resource economy, it is a devil’s bargain after a while.”
Conference organizer Hans Kåre Flø, head of development at Tekna, says this is exactly what the Lerchendal Conference is designed to do.
“That’s the significance of this conference,” he said. “We will have people in the room who can change Norway.”
Global warming and the need for change
Rifkin cautioned, however, that there is little time to waste, because a failure to make a transition away from fossil fuels could have catastrophic consequences because of climate change.
“I think climate change is roaring at the door,” he said. “It is terrifying.”
But Rifkin recognizes that moving away from oil will not be easy for Norway.
Farms in Germany are harvesting more than just crops. Photo: Thinkstock.com
“I would not say you would leave oil tomorrow, but you need an exit strategy,” he said. “It will be difficult to wean off the old system. Bring all the industries, bring in Statoil, they know a lot about energy, they know a lot about how to move to new energies…I am hopeful about Norway. Norway can become a flagship for how you make the transition… you have one of the biggest oil companies in the world, what are you going to do with it?”
