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To Carol, for suggesting that I write this book.
As usual, you were ahead of me.
 INTRODUCTION

We are facing a global emergency. Our scientists tell us that human-induced

climate change brought on by the burning of fossil fuels has taken the human
race and our fellow species into the sixth mass extinction event of life on Earth.
Yet few people alive today are even aware of this emerging reality. The
Intergovernmental Panel on Climate Change (IPCC), a scientific body of the
United Nations, issued a dire warning in October 2018 that global warming
emissions are accelerating and that we are on the verge of a series of escalating
climatic events, imperiling life on the planet. The IPCC estimated that human
activity has caused the temperature to rise 1°C (Celsius) above preindustrial
levels and predicted that if it crosses a threshold beyond 1.5°C, it will unleash
runaway feedback loops and a cascade of climate-change events that would
decimate the Earth’s ecosystems.1 There would be no return to the kind of life
we know today.
According to the famed Harvard biologist Edward O. Wilson, “the extinction
of species by human activity continues to accelerate, fast enough to eliminate
more than half of all species by the end of this century”—by the time today’s
toddlers are senior citizens.2 The last time the Earth experienced an extinction
event of this magnitude was 65 million years ago.3 The IPCC concluded that to
avoid the environmental abyss we would have to cut the emission of global
warming gases 45 percent from 2010 levels—and we only have twelve years left
to make this happen.4 This will require a transformation of our global economy,
our society, and our very way of life without precedent in human history. In
other words, the human race faces a razor-thin timeline for a radical reorientation
of civilization.
The wakeup call came in the November 2018 national elections in the United
States. A younger generation of congresspersons came to Washington and the
House of Representatives passionately committed to a radical redirection of the
American economy to address climate change while simultaneously creating
new green businesses and employment that will ensure a more equitable
distribution of the fruits of life. In November, young protesters from the Sunrise
Movement stormed the halls of Congress and staged sit-ins in the offices of
Nancy Pelosi, soon to become Speaker of the House of Representatives, and
Steny Hoyer, the incoming majority leader of the House. The protesters were
joined by Congresswoman-elect Alexandria Ocasio-Cortez.
Ocasio-Cortez called for the creation of a select committee in the incoming
House tasked with the mission of creating a “Green New Deal” for America. The
committee would set a one-year deadline to create an industrial plan to address
climate change, decarbonize the economic infrastructure within ten years, create
new business opportunities, and employ millions of disadvantaged workers in an
emerging green economy—a bold “aspirational” proposal far beyond anything
yet put forward by America’s cities, counties, and states.5 In the new term,
congressional leadership equivocated on the proposal and ultimately established
a Select Committee on the Climate Crisis with little power to act.
Meanwhile, on February 7, 2019, Ocasio-Cortez in the House and Ed
Markey in the Senate introduced a Green New Deal resolution. One hundred and
three members of Congress have already cosponsored it, including several of the
major presidential contenders within the Democratic Party: Bernie Sanders,
Kamala Harris, Cory Booker, Elizabeth Warren, and Kirsten Gillibrand.6
Democratic presidential hopefuls Julián Castro and Beto O’Rourke have also
lent their support to a Green New Deal. So have former vice president Al Gore
and three hundred state and local government officials from across the country,
including South Bend mayor Pete Buttigieg, another Democratic presidential
aspirant. There is no doubt that the Green New Deal has energized both
progressive politicians and a younger generation of voters and will be a central
theme of the 2020 national electoral campaigns.
Elected officials are sensing a sea change in public opinion that is quickly
moving the issue of climate change from near obscurity to make it the central
issue facing the American people. In blue and red states across America,
individuals, families, workers, and businesses are becoming frightened about the
violent changes in the weather and the deteriorating impact that climate change
is having on ecosystems, causing widespread property damage, disruption of the
business cycle, and loss of human life.
A December 2018 public opinion poll conducted by the Yale Program on
Climate Change Communication and the George Mason University Center for
Climate Change Communication found that 73 percent of respondents think
global warming is happening—an increase of 10 percentage points since 2015—
and nearly half (46 percent) say they have experienced the effects of global
warming—an increase of 15 percentage points since 2015. Moreover, 48 percent
of Americans agree that people across the United States “are being harmed by
global warming ‘right now,’” an increase of 16 percentage points since 2015.
Most disquieting of all, an overwhelming majority of Americans believe that
global warming is harming the world’s poor (67 percent), plant and animal
species (74 percent), and future generations (75 percent).7
The turnaround in the national mood comes in the aftermath of an escalating
number of catastrophic climate events over the past decade. What makes climate
change so terrifying is that it disrupts the Earth’s hydrosphere, which is essential
to maintaining life. Earth is the watery planet. Our ecosystems have evolved
over eons in consort with the water cycles that traverse the planet via the clouds.
Here’s the rub. For each one-degree rise in the temperature on Earth attributed to
the increase of global warming emissions, the water-holding capacity of air
increases by approximately 7 percent, leading to more concentrated precipitation
in the clouds and the generation of more extreme water events: frigid winter
temperatures and blockbuster snows; devastating spring floods; prolonged
summer droughts and horrifying wildfires; and deadly category 3, 4, and 5
hurricanes, with untold loss of life and property and destruction of ecosystems.8
The Earth’s biomes, which developed in tandem with a fairly predictable
hydrological cycle over the 11,700 years since the end of the last ice age, cannot
catch up with the runaway exponential curve currently driving the Earth’s
hydrological cycle, and they are collapsing in real time.9
It’s no wonder, then, that a survey of American voters conducted just after
the 2018 national elections asking their opinion on launching a Green New Deal
plan for addressing climate change, akin to the New Deal mobilization in the
1930s that helped lift America out of the Great Depression, found widespread
support across all political affiliations. The Green New Deal “would generate
100% of the nation’s electricity from clean, renewable sources within the next 10
years; upgrade the nation’s energy grid, buildings, and transportation
infrastructure; increase energy efficiency; invest in green technology research
and development; and provide training for jobs in the new green economy.”
Ninety-two percent of Democrats supported the idea, including 93 percent of
liberal Democrats and 90 percent of moderate-to-conservative Democrats. But
64 percent of Republicans—including 75 percent of moderate-to-liberal
Republicans and 57 percent of conservative Republicans—also backed the
policy goals outlined in the Green New Deal. Eighty-eight percent of
independents endorsed the policies as well.10
 The widespread support for a Green New Deal among Democrats,
Republicans, and independent voters suggests a potential watershed in American
politics with far-reaching implications for the 2020 presidential elections and
beyond. Climate change is no longer only an academic issue and long-term
policy concern but, rather, a frightening reality for millions of Americans who
sense that the country and the world are facing a new and harrowing future
unlike any previous period in human history.
The American public is not the only constituency that is running scared and
motivated to act. The global elite of heads of state, CEOs of Fortune 500
companies, and billionaires meeting in Davos, Switzerland, at the annual get-
together of the World Economic Forum in January 2019 were abuzz about the
dire warnings from scientists. Conversation about the impacts that climate
change is having on economies, businesses, and the financial community
dominated the public sessions and private huddles. In a survey of attendees,
climate issues accounted for four of the top five risks that could cause the most
damage to the economy.11 Gillian Tett of the Financial Times reported that even
though “Davosians apparently fear that extreme weather events are becoming
more common,” they agreed that “the world has no effective mechanism to
respond.”12
At the same time that the World Economic Forum was meeting in Davos, a
group of twenty-seven Nobel laureates, fifteen former chairs of the Council of
Economic Advisers to the President, four former chairpersons of the Federal
Reserve, and two former US secretaries of the treasury joined together in an
urgent appeal to the US government to enact a carbon emission tax as the best
and quickest means to help cut carbon dioxide emissions and encourage
businesses to transition into the new green energies, technologies, and
infrastructure of a zero-carbon era. Larry Summers, a former treasury secretary
and president emeritus of Harvard University, spoke for the group, saying, “The
gravity of the climate change problem concentrates minds and leads people to
put aside differences. People who agree on little seem to agree on this. And
that’s striking.”13
The signers said that the proposed carbon tax would send “a powerful price
signal that harnesses the invisible hand of the marketplace to steer economic
actors towards a low-carbon future” and “promote economic growth.” They
recommended that the tax “should increase every year until emissions reductions
goals are met and be revenue neutral to avoid debates over the size of the
government,” because “a consistently rising carbon price will encourage
technological innovation and large-scale infrastructure development and
accelerate the shift to low and zero carbon goods and services.” The proposal
includes an additional feature designed “to maximize the fairness and political
viability of a rising carbon tax.” All of the revenue generated from the tax will
be “returned directly to US citizens through equal lump-sum rebates” so that
“the majority of American families, including the most vulnerable, will benefit
financially by receiving more in ‘carbon dividends’ than they pay in increased
energy prices.”14
Americans are not alone in clamoring for a Green New Deal. More than a
decade ago, a comparable movement to address climate change swept across the
European Union. It, too, was called the “Green New Deal,” and it inspired a
growing legion of activists. The name stuck and remains a powerful rallying cry
among political parties across the member states of the EU to this day, providing
a central theme in the 2019 elections to select the new president of the European
Commission and the members of the European Parliament.
On March 15, 2019, more than a million students of the Gen Z cohort joined
ranks with their millennial elders and walked out of their classrooms and onto
the streets in an unprecedented one-day strike, taking part in over two thousand
demonstrations across 128 countries protesting their governments’ inaction on
climate change and demanding a global transformation into a postcarbon green
era.15
Although there’s widespread agreement across the political spectrum that
transitioning to a zero-carbon society is daunting, a path does exist that might
stave off the additional half-a-degree rise in temperature that would doom life on
Earth and give us a chance to reorder our relationship to the planet. Here is the
possibility: Solar, wind, and other renewable energies are quickly coming online.
According to a November 2018 study by Lazard—one of the world’s largest
independent investment banks—the levelized cost of energy (LCOE) of large
solar installations has plummeted to 36 dollars/megawatt hour, while wind has
fallen to 29 dollars/megawatt hour, making them “cheaper than the most efficient
gas plants, coal plants, and nuclear reactors.”16 “LCOE is an economic
assessment of the average total cost to build and operate a power-generating
asset over its lifetime divided by the total energy output of the asset over that
lifetime.”17 Within the next eight years, solar and wind will be far cheaper than
fossil fuel energies, forcing a showdown with the fossil fuel industry.18
The Carbon Tracker Initiative, a London-based think tank serving the energy
industry, reports that the steep decline in the price of generating solar and wind
energy “will inevitably lead to trillions of dollars of stranded assets across the
corporate sector and hit petro-states that fail to reinvent themselves,” while
“putting trillions at risk for unsavvy investors oblivious to the speed of the
unfolding energy transition.”19 “Stranded assets” are all the fossil fuels that will
remain in the ground because of falling demand as well as the abandonment of
pipelines, ocean platforms, storage facilities, energy generation plants, backup
power plants, petrochemical processing facilities, and industries tightly coupled
to the fossil fuel culture.
Behind the scenes, a seismic struggle is taking place as four of the principal
sectors responsible for global warming—the Information and Communications
Technology (ICT)/telecommunications sector, the power and electric utility
sector, the mobility and logistics sector, and the buildings sector—are beginning
to decouple from the fossil fuel industry in favor of adopting the cheaper new
green energies. The result is that within the fossil fuel industry, “around $100
trillion of assets could be ‘carbon stranded.’”20
The carbon bubble is the largest economic bubble in history. And studies and
reports over the past twenty-four months—from within the global financial
community, the insurance sector, global trade organizations, national
governments, and many of the leading consulting agencies in the energy
industry, the transportation sector, and the real estate sector—suggest that the
imminent collapse of the fossil fuel industrial civilization could occur sometime
between 2023 and 2030, as key sectors decouple from fossil fuels and rely on
ever-cheaper solar, wind, and other renewable energies and accompanying zero-
carbon technologies.21 The United States, currently the leading oil-producing
nation, will be caught in the crosshairs between the plummeting price of solar
and wind and the fallout from peak oil demand and accumulating stranded assets
in the oil industry.22
Let’s be clear that this Great Disruption is occurring, in large part, because
the marketplace is speaking. Every government will have to follow the market or
face the consequences. Governments that lead in the scale-up of a new zero-
carbon Third Industrial Revolution will stay ahead of the curve. Governments
that fail to move with market forces and instead remain in a collapsing
twentieth-century fossil fuel culture will falter.
Not surprisingly, a worldwide movement to divest from the oil industry and
invest in renewable energies is rapidly gaining strength. The wild card is likely
to be the over $40 trillion in global pension funds, of which $25.4 trillion is in
the hands of the American workforce.23 Pension funds were the largest pool of
capital in the world by 2017. If pension funds were to remain invested in the
fossil fuel industry, the financial losses to millions of American workers would
be incalculable at the juncture where the carbon bubble bursts.
A deep conversation has just begun within the financial community around
whether to stay the course and continue to support the fossil fuel industry with
trillions of dollars of investment or abandon ship and invest in the new green
energies and the new business and employment opportunities that would come
with the build-out and scale-up of the new green infrastructure in America and
around the world. Many institutional investors, led by global pension funds, have
begun cashing out of fossil fuels and investing in renewable energies in what is
becoming the biggest divest/invest campaign in capitalist history. More than a
thousand institutional investors in thirty-seven nations, including some of the
biggest cities and labor unions, have thus far committed to divesting $8 trillion
in funds from the fossil fuel industry and reinvesting in the green energies, clean
technologies, and business models that will take us to a zero-carbon future.24
The emergence of the carbon bubble and stranded fossil fuel assets
concurrent with a popular movement for a global Green New Deal opens a
window to the possibility of an infrastructure shift into a near-zero-carbon
ecological era over the coming twenty years.
While the call for a Green New Deal is quickly gathering momentum, there
is a realization among its proponents and supporters that there is as yet no clear
path to an “Industrial Revolution” that could accomplish the mission. This book
will share my experience over the past two decades in the European Union and,
more recently, in the People’s Republic of China, helping both governments
prepare their Green New Deal–style transitions into a zero-carbon Third
Industrial Revolution (TIR). I hope and expect that the grassroots movement for
a Green New Deal now spreading across America will find it useful as the
United States crafts its green, postcarbon Third Industrial Revolution
infrastructure to mitigate climate change and create a more just and humane
economy and society.
On a more personal note, I’d like to address those who have voiced their
skepticism about a Green New Deal and the likelihood of making an economic
transition of this magnitude in the short span of twenty years. The global
companies and industries that I work with—the telecoms, electric utilities,
transportation and logistics, construction and real estate, advanced
manufacturing, smart agriculture and life sciences, and the financial community
—know this can be accomplished. We’re already on the ground doing it in
regions around the world.
And to those elected officials across the United States who argue that a
Green New Deal is impractical, I would like to say that the governments of the
European Union and the People’s Republic of China know that a transformation
on this scale can be accomplished in a generation. They are both doing it in real
time. Here in the United States we are late and past due. It’s time to take off the
blinders and show the world what we can do when we set our mind to a new
vision—this time a Green New Deal for America, humanity, our fellow
creatures, and our shared planet. It is my hope that the United States will join
with the European Union and China and lead the world into a zero-carbon
ecological age.
America’s signature, from its earliest beginnings, has been its can-do, roll-
up-the sleeves optimism that has seen it through more than two hundred years of
trials, tribulations, challenges, and opportunities. This is in our cultural DNA.
Now, a new generation of Americans is stepping onto the national and global
stage to take up a mission that is without parallel in human history. It is very
likely that the Green New Deal will have long legs and continue to pick up
widespread popular support, especially among the under-forty generation, the
cohort of digital natives who are ready and eager to imprint their stamp on the
body politic in the coming decades.
 PART I

THE GREAT DISRUPTION

The Decoupling Stampede and Stranded Fossil Fuel Assets
 1

IT’S THE INFRASTRUCTURE, STUPID!

We need a Green New Deal economic vision for America and the world. It
must be compelling and executable in big cities, small towns, and rural
communities. And it will have to be deployed quickly and scaled within twenty
years or so if we are to meet the deadline of decarbonizing the global economy
and reenergizing it with green electricity and accompanying sustainable services.
We should step back, then, and ask the question, “How do the great economic
paradigm shifts in history emerge?” If we know how they occur, governments
everywhere can draw up roadmaps to deliver the Green New Deal.

The Third Industrial Revolution Paradigm

The major economic transformations in history share a common denominator.

They all require three elements, each of which interacts with the others to enable
the system to operate as a whole: a communication medium, a power source, and
a transportation mechanism. Without communication, we can’t manage
economic activity and social life. Without energy, we can’t power economic
activity and social life. Without transport and logistics, we can’t move economic
activity and social life. Together, these three operating systems make up what
economists call a general-purpose technology platform (a society-wide
infrastructure). New communication, energy, and mobility infrastructures also
change society’s temporal/spatial orientation, business models, governing
patterns, built environments, habitats, and narrative identity.

In the nineteenth century, steam-powered printing and the telegraph, abundant

coal, and locomotives on national rail systems meshed in a common general-
purpose technology platform to manage, power, and move society, giving rise to
the First Industrial Revolution. In the twentieth century, centralized electricity,
the telephone, radio and television, cheap oil, and internal combustion vehicles
on national road systems converged to create an infrastructure for the Second
Industrial Revolution.
Now, we are in the midst of a Third Industrial Revolution. The digitalized
Communication Internet is converging with a digitized Renewable Energy
Internet, powered by solar and wind electricity, and a digitized Mobility and
Logistics Internet of autonomous electric and fuel-cell vehicles, powered by
green energy, atop an Internet of Things (IoT) platform, embedded in the
commercial, residential, and industrial building stock, that will transform society
and the economy in the twenty-first century.
Sensors are being attached to every device, appliance, machine, and
contrivance, connecting every “thing” with every human being in a digital neural
network that extends across the entire global economy. Already, billions of
sensors are attached to resource flows, warehouses, road systems, factory
production lines, the electricity transmission grid, offices, homes, stores, and
vehicles, continually monitoring their status and performance and feeding Big
Data back to the emerging Communication Internet, Renewable Energy Internet,
and Mobility and Logistics Internet. By 2030, there could be trillions of sensors
connecting the human and natural environment in a global distributed intelligent
network.1
Connecting everything and everyone via the Internet of Things offers
enormous economic benefits. In this expanded digital economy, individuals,
families, and enterprises will be able to connect in their homes and workplaces
to the IoT and access Big Data flowing across the World Wide Web that affects
their supply chains, production and services, and every aspect of their social
lives. They can then mine that Big Data with their own analytics and create their
own algorithms and apps to increase their aggregate efficiency and productivity,
reduce their carbon footprint, and lower the marginal cost of producing,
distributing, and consuming goods and services and recycling waste, making
their businesses and homes greener and more efficient in an emerging
postcarbon global economy. (Marginal cost is the cost of producing an additional
unit of a good or service after fixed costs have been absorbed.)
The marginal cost of some goods and services in this green digital economy
will even approach zero, forcing a fundamental change in the capitalist system.
In economic theory, we are taught that the optimum market is one in which
businesses sell at marginal cost. Businesses are encouraged to introduce new
technologies and other efficiencies that can reduce the marginal cost of
producing and distributing their goods and services, enabling them to sell at a
cheaper price, win over market share, and bring back sufficient profit to their
investors.
However, it never occurred to economists that one day there might exist a
general-purpose technology platform so hyperefficient in the production and
delivery of goods and services that it plunges the marginal cost of economic
activity so low that profit margins shrink dramatically, undermining the capitalist
business model. At extremely low marginal costs, markets become too slow and
eventually irrelevant as business mechanisms. This is what the green digital
Third Industrial Revolution does.
Markets are transactional and start/stop mechanisms. Sellers and buyers
come together at a moment in time and fix on a transaction price, the good is
delivered or the service rendered, and the two parties walk away. The downtime
between transactions is lost time against fixed overhead and other expenses,
where the seller is in limbo. Aside from lost production costs, consider the time
and expense in bringing the seller and buyer together again—think advertising
costs, marketing, the cost of storing goods, downtime across the logistics and
supply chain, and other overhead expenses that still have to be paid out. This
phenomenon of shrinking marginal cost and shrinking profits playing out against
the slow transaction of one-off sales of goods and services between sellers and
buyers makes traditional markets all but useless in a digitally enhanced high-
speed infrastructure. In the Third Industrial Revolution, the “transaction” of
goods gives way to a continuous “flow” of 24/7 services.
In the new economic system now emerging, ownership gives way to access,
and sellers and buyers in markets are replaced, in part, by providers and users in
networks.
In provider/user networks, industries and sectors are replaced by “specialized
competencies” that come together on platforms to manage the uninterrupted flow
of goods and services in smart networks, returning sufficient profit, even at low
margins, by the 24/7 continuous traffic across the system.
Margins for some goods and services, however, shrink so low “toward zero”
that profits are no longer viable even in capitalist networks because the goods
and services produced and distributed are nearly free. This is already occurring
and giving rise to a new phenomenon—the Sharing Economy. At any given time
of the day, hundreds of millions of people around the world are producing and
sharing their own music, YouTube videos, social media, and research. Some are
taking massive open online courses (MOOCs), taught by professors at the best
universities, and often receiving college credit, for free. All one needs is a
smartphone, a service provider, and an electrical outlet to power up.
More and more people around the world are also generating their own solar
and wind electricity for use off-grid and/or for sale back to the grid, again at
near-zero marginal cost. The sun and wind have yet to send a bill. Increasing
numbers of millennials are sharing homes, rides, clothes, tools, sporting
equipment, and an array of other goods and services. Some of the sharing
networks like Uber are capitalist provider/user networks where the marginal cost
of connecting riders and drivers is nearly zero, but the providers command a
price for temporary access to the service. Other sharing networks are nonprofits
or cooperatives where members freely share knowledge, goods, and services
with one another. Millions of individuals are constructing the knowledge of the
world and sharing it on Wikipedia, a nonprofit website that is the fifth-most-
trafficked website, all for free.2
The sharing of a range of virtual and physical goods is the cornerstone of an
emerging circular economy, allowing the human race to use far less of the
resources of the Earth while passing on what they no longer use to others and, by
doing so, dramatically reducing carbon emissions. The Sharing Economy is a
core feature of the Green New Deal era.
The Sharing Economy is now in its infancy and is going to evolve in many
directions. But this much is assured: The Sharing Economy is a new economic
phenomenon made possible by the digital infrastructure of communication,
energy, and mobility that is changing economic life. To this extent, the Sharing
Economy is the first new economic system to enter onto the world stage since
capitalism and socialism in the eighteenth and nineteenth centuries.
Already, a younger generation of digital natives—under the age of forty—are
ensconced in this new hybrid economic system. Part of the day, they are sharing
all sorts of goods and services for nearly free in open-source commons around
the world, much of which is not measured in the GDP or standard economic
accounting. The rest of the day, they are increasingly intertwined in capitalist
provider/user networks, paying for access to goods and services. This hybrid
economic system is the playing field on which a Green New Deal will emerge in
the years ahead.
The build-out of the Green New Deal smart infrastructure will involve every
competency: the ICT sector, including telecommunication, cable companies,
internet companies, and the electronics industry; power and electric utilities;
transportation and logistics; the construction and real estate industries; the
manufacturing sector; retail trade; the food, agriculture, and life sciences sectors;
and the travel and tourism industry. The new smart sustainable infrastructure, in
turn, makes possible the new business models and new kinds of mass
employment that characterize the shift to a green economy.
The transition from a Second Industrial Revolution to a Third Industrial
Revolution will be formidable—comparable to the shift from agriculture to an
industrial society—and will require the collective talents and skills of two
generations of Americans. To make this happen, we will need to train millions of
people and put them to work, or back to work.
We will have to decommission and disassemble the entire stranded fossil fuel
and nuclear energy infrastructure—the pipelines, power plants, storage facilities,
etc. Robots and AI won’t do that. It will necessitate a far more agile semiskilled,
skilled, and professional workforce.
The communication network will have to be upgraded, with the inclusion of
universal broadband. Human beings will have to lay the cable and make the
connections.
The energy infrastructure will need to be transformed to accommodate solar,
wind, and other renewable energies. Robots and AI will not install solar panels
and assemble wind turbines. The dumb centralized electricity grid will have to
be reconfigured into a smart distributed digital Renewable Energy Internet to
accommodate the flow of renewable electricity produced by countless green
micro power plants. Again, this is complex work that can only be done by
semiskilled and skilled professionals.
The antiquated twentieth-century nationwide electricity transmission grid
will need to be replaced by a twenty-first-century high-voltage smart national
power grid. This will marshal the employment of a huge workforce over a
twenty-year transformation.
The transportation and logistics sector will have to be digitized and
transformed into a GPS-guided and autonomous Mobility Internet made up of
smart electric and fuel-cell vehicles powered by renewable energy and running
on intelligent road, rail, and water systems. Here, too, low-tech and high-tech
skilled employees will be put to the task. The introduction of electric and fuel-
cell transportation will require millions of charging stations and thousands of
hydrogen fueling stations. Smart roads, equipped with ubiquitous sensors,
feeding real-time information on traffic flows and the movement of freight, will
also have to be installed. Again, more jobs.
Buildings will need to be retrofitted to increase their energy efficiency and be
equipped with renewable-energy-harvesting installations and converted into
micro power-generating plants. Skilled laborers will have to install insulation
and new windows and doors. Energy-storage technologies will have to be built
into every layer of the infrastructure to secure intermittent renewable energy.
Again, this is going to provide ample employment.
The digital economy also raises risks and challenges, not the least of which is
guaranteeing network neutrality to ensure everyone has equal access to the
networks, protecting privacy, ensuring data security, and thwarting cybercrime
and cyberterrorism. How do we prevent nation-states from hacking into other
countries’ social media and spreading misinformation to influence the outcome
of their elections? How do we push back against giant internet companies
becoming monopolies and commodifying our personal online data for sale to
third parties for commercial uses?
The dark side of the internet will require vigilant regulatory oversight at the
local, state, and national levels, backed up by layers of redundancy built into the
system to ensure that any disruption on the smart digital Internet of Things
infrastructure can be counteracted by disaggregating, decentralizing, and
reorganizing into new networks at the neighborhood or community level at a
moment’s notice to absorb the shocks.
The transition to a fully digital economy and the Third Industrial Revolution
results in a leap in aggregate efficiency far beyond the gains achieved by the
Second Industrial Revolution in the twentieth century. During the period from
1900 to 1980 in the United States, aggregate energy efficiency—the ratio of
useful to potential physical work that can be extracted from energy and materials
—steadily rose, along with the development of the nation’s infrastructure, from
2.48 percent to 12.3 percent. Aggregate energy efficiency began to level off in
the late 1990s at around 13 percent and then peaked at 14 percent in 2010 with
the completion of the Second Industrial Revolution infrastructure. Despite a
sizable increase in aggregate efficiency, which gave the United States
unparalleled productivity and growth, 86 percent of the energy the country used
in the Second Industrial Revolution was wasted during transmission.3 Other
industrializing nations experienced similar aggregate efficiency curves.
Even if we were to upgrade the carbon-based Second Industrial Revolution
infrastructure, it would be unlikely to have any measurable effect on aggregate
efficiency and productivity. Fossil fuel energies have matured. And the
technologies designed and engineered to run on these energies, like the internal
combustion engine and centralized electricity grids, have exhausted their
productivity, with little potential left to exploit.
New studies, however, show that with the shift to an Internet of Things
platform and a Third Industrial Revolution, it is conceivable to increase
aggregate energy efficiency to as high as 60 percent over the next twenty years,
amounting to a dramatic increase in productivity while transitioning into a nearly
100 percent postcarbon renewable energy society and a highly resilient circular
economy.4
I regularly meet with heads of state, provincial governors, and mayors
around the world; during our discussions I describe the smart green
infrastructure shift into a zero-carbon Third Industrial Revolution economy that
is the very centerpiece of a Green New Deal, then ask them if they have a better
plan for mitigating climate change and creating the new businesses and
employment opportunities that come with it. The response I often get is silence,
because the only other alternative is to remain trapped in a dying, carbon-based
Second Industrial Revolution economy, whose aggregate efficiencies and
productivity peaked decades ago and which is now taking the world into the
sixth extinction event. What, then, is holding us up?

Connecting the Dots

Over 9,000 cities and local governments have come together in the Global
Covenant of Mayors for Climate & Energy to create sustainable communities
and address climate change.5 These cities can boast of introducing scores of
high-visibility green “pilot projects,” including solar and wind installations,
electric vehicles and hydrogen fuel-cell buses, LEED-certified buildings,
recycling programs, etc. But what communities often end up with is
disconnected siloed initiatives and little else.
Missing is the green Third Industrial Revolution infrastructure, which is the
“nervous system” that would connect all these isolated projects. Infrastructure, at
the deepest level, is not just an incidental appendage to commerce and social
life, as popular lore would have it. It is always new infrastructure that is the
indispensable “extended body” of a new body politic.
Infrastructure, at the deepest level, is a techno-socio bond that brings
together new communications technologies, new energy sources, new modes of
mobility and logistics, and new built environments, enabling communities to
more efficiently manage, power, and move their economic activity, social life,
and governance. Communication technology is the brain that oversees,
coordinates, and manages the economic organism. Energy is the blood that
circulates through the body politic, providing the nourishment to convert
nature’s endowment into goods and services to keep the economy alive and
growing. Mobility and logistics are extensions of our limbs, allowing
communities to interact physically across temporal and spatial domains to
facilitate the movement of goods, services, and people. Buildings are the skin—
the semipermeable membranes that allow our species to survive the elements,
store the energies and other resources we need to maintain our physical well-
being, provide secure and safe places to produce and consume the goods and
services we require to enhance our existence, and serve as a congregating place
to raise our families and conduct social life. Infrastructure is akin to an immense
technological organism that brings large numbers of people together as an
extended figurative family collectively engaging in more complex economic,
social, and political relationships.
For example, think of the Second Industrial Revolution of the twentieth
century as a technological nervous system to manage the affairs of a new
economic paradigm. Urban America was electrified between 1900 and the onset
of the Great Depression in 1929, and rural America followed suit between 1936
and 1949.6 The electrification of factories made way for the era of mass-
produced goods, with the automobile as the kingpin. Without electricity, Henry
Ford would not have had available electric power tools to bring the work to the
workers and manufacture an affordable automobile for millions of Americans.
The mass production of the gasoline-powered Model T car altered the temporal
and spatial orientation of society. Millions of people began to trade in their
horses and buggies for automobiles. To meet the increased demand for fuel, the
nascent oil industry revved up exploration and drilling, built oil pipelines across
the country, and set up thousands of gasoline stations to power the millions of
automobiles coming off the assembly lines. Concrete highways were laid out
over vast stretches of America, culminating in the US Interstate Highway
System—the largest public works project in world history—creating a seamless
coast-to-coast road system. The interstate highways were the impetus for a mass
exodus of millions of families from urban areas to the newly emerging suburbs
popping up off the highway exits. Thousands of miles of telephone lines were
installed, and later radio and television were introduced, recasting social life and
creating a communication grid to manage and market the far-flung activities of
the oil economy and auto age.
That was then, this is now. The United States is the clear outlier today among
the highly developed industrial nations and even among many developing
countries. In the World Economic Forum’s 2017 report ranking the quality of
nations’ infrastructures, the United States ranked a dismal ninth, behind
countries like the Netherlands, Japan, France, Switzerland, and Korea.7 A report
by McKinsey Consulting projected that the United States will have to increase
its current overall infrastructure investment by 0.5 percent of GDP between 2017
and 2035 just to keep pace with the conventional infrastructure needs of the
country.8
Unfortunately, in relation to a key measure of the new digital infrastructure
of the emerging Third Industrial Revolution, the United States ranks even worse,
an abysmal nineteenth among the nations of the world in fixed-broadband
internet subscriptions, with slower internet speeds.9 When it comes to the
formation of a digital Renewable Energy Internet and an autonomous Mobility
Internet, the United States is not even at the table.
It’s sad when we reflect that in the First and Second Industrial Revolutions,
the United States was unmatched by any other country in the world in its
commitment to bring the full force of the national government, states, localities,
and economy to bear on building world-class infrastructure. It is becoming self-
evident that the United States is long past due for a blunt reassessment of its
economic priorities in a world that is fast leaving it behind in the twenty-first
century.
The Third Industrial Revolution is already scaling up in both the European
Union and the People’s Republic of China. My offices in Brussels and
Washington, DC, have worked closely with the EU over the past twenty years on
the conception and deployment of a Third Industrial Revolution infrastructure.
Since 2013, our office in Beijing has also worked alongside the leadership of the
People’s Republic of China on a similar Third Industrial Revolution roadmap
and deployment currently operationalizing in the thirteenth Five-Year Plan.
I’m often asked the question, “Why has the US lagged so far behind the
European Union and China?” To answer, I would like to take you back to
President Barack Obama’s reelection campaign in 2012, and an incident that
captures America’s recalcitrance on the question of infrastructure. President
Obama, speaking to supporters in Roanoke, Virginia, on July 13 of that year,
strayed from conventional campaign rhetoric to reflect on what policies in the
course of American history made the United States a beacon for the rest of the
world. The president mused on how the success of private enterprises in the
nineteenth and twentieth centuries depended, to a great extent, on government
involvement in “big-picture infrastructure shifts.” He told the crowd:

If you were successful, somebody along the line gave you some
help. There was a great teacher somewhere in your life. Somebody
helped to create this unbelievable American system that we have
that allowed you to thrive. Somebody invested in roads and
bridges. If you’ve got a business—you didn’t build that. Somebody
else made that happen. The Internet didn’t get invented on its own.
Government research created the Internet so that all the companies
could make money off the Internet.10

President Obama went on to cite the federal government’s funding of various

infrastructure projects and government research that allowed businesses to
function and flourish. His Republican opponent, Mitt Romney, pounced on the
phrase “you didn’t build that,” claiming that President Obama was undermining
the role that small businesses play in making a strong American economy. But
the president was merely trying to explain the contribution that federal, state, and
local governments make in providing the infrastructure and public services that
every citizen relies on and that are indispensable to both the success of the
business community and the general well-being of the public.
Obama’s “you didn’t build that” moment instantly went viral on social
media, creating a national controversy over the role small businesses play in
America’s economic success story. Within days, Republican talking heads spread
a counternarrative with the phrase “we built it,” suggesting that small businesses,
not government, are primarily responsible for America’s preeminence. “We built
it” became so popular with the Republican base that the Republican National
Convention in Tampa incorporated the theme into the proceedings.11
The “you didn’t build that” remark struck a nerve in a country where small
business owners feel overtaxed, overregulated, underrepresented, and
underappreciated for their contribution to the building of the American economy
on Main Streets across the country. All justified! Still, “you didn’t build that”
speaks to a more unsettling reality—that is, a feeling on the part of many
Americans that Big Government is constantly encroaching on their lives in ways
that undermine their personal freedoms and the workings of the free market.
President Ronald Reagan had popularized this theme in his 1980 run for the
presidency with the one-liner “Get the government off the backs of the people.”12
To be fair, most Americans know that many of the things they depend on day
to day come from taxpayer dollars and local, state, and federal government
programs: the public schools our children attend, the roads we drive on, the air
traffic controllers that guide our flights, the National Weather Service that keeps
us abreast of local conditions, the public hospitals that minister to the sick, the
motor vehicle departments that register our cars, the US Postal Service that
delivers our packages and mail, the fire departments and police departments that
protect our safety, the prisons that guard convicted felons, the systems that flow
water into our businesses and homes, the sanitation departments that recycle our
waste, etc.
Public opinion polls show that, in theory at least, Americans support
spending more federal, state, and local funds to improve infrastructure.13 As to
the particulars of how much, on what, and whether the deployment of that
infrastructure should remain the responsibility of the government or be put in the
hands of the marketplace, the reaction is far more divided and acrimonious.
In the European Union, EU citizens recognize the importance of maintaining
a balanced partnership between government and commerce, and there is a deep
appreciation for the role that the government plays in providing public
infrastructure and services from which both the business community and the
public benefit in their day-to-day lives. For this reason, taxpayers in Europe are
willing to shoulder higher taxes in return for the advantages they secure with
public services, from universal healthcare to high-speed rail systems.
By contrast, everywhere we look across America today, the public
infrastructure is in dire straits and disrepair: roads, bridges, dams, public schools,
hospitals, public transit, etc. Every four years, the American Society of Civil
Engineers (ASCE) issues a report card on the condition of the country’s
infrastructure, including its rail transit, inland waterways, levees, ports, schools,
wastewater and solid waste treatment, hazardous waste disposal, parks, aviation,
and energy. In its 2017 report card, the ASCE gave the nation’s public
infrastructure an embarrassingly low score of D+. Noting that the deteriorating
public infrastructure is becoming a drag on the American economy and a
growing threat to the health, well-being, and security of the nation, the ASCE
report warns that the country is only paying half of America’s infrastructure bill,
leaving an investment funding gap that hurts businesses, workers, and families.14
This means poor roads and more travel time, collapsed bridges, airport
delays, aging electricity grids and power shortages, unreliable water distribution
systems, the breakdown of sewer systems and a host of other public services, all
of which “translate into higher costs for businesses to manufacture and distribute
goods and services.” According to the ASCE, “these higher costs, in turn, get
passed along to workers and families.” The ASCE estimates that the continued
deterioration of the nation’s infrastructure will cost the US GDP $3.9 trillion and
result in $7 trillion in lost sales and a loss of 2.5 million jobs by 2025. Lest there
be any doubt about the magnitude of the losses and the impact they are already
having on American families, the ASCE estimates that because “the cost of
deteriorating infrastructure takes a toll on families’ disposable household income
and impacts the quality and quantity of jobs in the U.S. economy … from 2016
to 2025, each household will lose $3,400 each year in disposable income.”15
The ASCE concludes that the United States will need to invest an additional
$206 billion annually over ten years (2016–2025) on infrastructure just to
achieve a B grade—and overall will need to come up with $4.59 trillion by 2025.
This is $2 trillion more than the United States currently invests in
infrastructure.16
History tells us that the vitality of a nation is measured by the willingness of
its citizens to sacrifice a portion of their income and wealth to secure the public
infrastructure and services that advance the productivity, health, and general
well-being of its people. When that commitment wanes, it’s a clear signal of the
nation’s decline and fall. To a large extent, the rhetorical phrase “Make America
Great Again” rings hollow at a time when a sizable segment of the population is
no longer willing to commit to America’s future by supporting a rebuilding and
transformation of the nation’s infrastructure in anticipation of the needs of not
only the present generation but also generations yet to come.
If there was ever a case to be made for America being “penny-wise and
pound-foolish,” it’s our general disregard for the importance of infrastructure.
And while in the short run this just means bad roads, rickety bridges, unreliable
public transportation, and slow mobile phones, in the long run, if we fail to make
the investment in Third Industrial Revolution infrastructure, it could pose a more
existential threat for us and the planet. Perhaps if we better understood the
payoff of such investments, it would become easier to commit tax revenue to
infrastructure. A comprehensive 2014 study by the University of Maryland for
the National Association of Manufacturers says it all. The study found that
infrastructure improvements add $3 to the country’s GDP for every dollar
invested.17 To add icing on the cake, McKinsey estimates that increasing
infrastructure spending by just 1 percent of GDP would add 1.5 million jobs to
the US economy.18 What more is there to say except “woe is us”?

Who Should Own the Infrastructure?

The Green New Deal is a powerful plea by the younger generations—the

millennials and Gen Z, now the dominant cohorts in the United States—to turn
America around and move forward, this time with a far more important agenda:
not just to improve the social prospects and economic well-being of every
American but also to position America and its people at the forefront in
mitigating climate change and saving life on Earth. The transformation from a
dying fossil-fuel-weighted Second Industrial Revolution infrastructure to a smart
green zero-emission Third Industrial Revolution infrastructure is the very
nucleus of the Green New Deal.
Infrastructure revolutions require a healthy social-market economy that
brings together government, industry, and civil society at every level with the
appropriate mix of public capital, private capital, and social capital. In the
United States, both the First Industrial Revolution of the nineteenth century and
the Second Industrial Revolution of the twentieth century relied on a strong and
robust public-private partnership in the build-out and scale-up of the new
infrastructures that transformed American life.
The American public may be aware of the New Deal that accompanied the
Second Industrial Revolution. They may not know that a New Deal accompanied
the First Industrial Revolution as well, although it wasn’t called that. The federal
government’s Morrill Land-Grant Acts of 1862 and 1890 established land-grant
public colleges and universities across the country, providing the education and
skills necessary to transform American agriculture and industry. Millions of
Americans have attended these schools over the past 150 years. If you went to
Penn State, Ohio State, the University of Georgia, Texas A&M, the University of
Arizona, the University of California, or any of the other land-grant institutions
in every state of the country, you have the federal government’s Morrill Land-
Grant Acts to thank. The federal government financed the first telegraph
installation, which stretched from the Capitol Building to Baltimore.19 The
federal government’s Homestead Acts ceded over 270 million acres of federal
public lands—10 percent of the total US land area—for free to 1.6 million
homesteaders.20 The federal government’s Pacific Railroad Acts authorized the
issuance of government bonds and land grants to railroad companies, hastening
the build-out of a transcontinental rail infrastructure.
President Franklin Delano Roosevelt’s New Deal in the 1930s included not
only new financial reforms but also large-scale federal programs, including the
Public Works Administration (PWA), to promote the infrastructure transition to a
Second Industrial Revolution.21 The Work Projects Administration (WPA) hired
millions of unemployed people to carry out public works projects, including the
construction of buildings and roads and the stewardship of public lands.22 The
Roosevelt administration also introduced a mammoth electricity-generation
project—the Tennessee Valley Authority—that built giant dams to produce
cheap subsidized hydroelectricity for rural communities that had not yet become
electrified.23 The government then assisted the rural regions in establishing
electric cooperatives to bring that electricity to millions of Americans living in
remote areas of the country. As mentioned, the federal government’s National
Interstate and Defense Highways Act of 1956 connected the country with a
single road system, spawning the development of suburban America.24 The
federal government’s GI Bill offered free higher education for nearly 8 million
veterans after World War II and the Korean War, providing the knowledge
needed to promote a high-quality workforce to both complete the build-out of
the Second Industrial Revolution infrastructure and manage the new business
opportunities that plugged into it.25 The Federal Housing Administration (FHA)
—created in 1934—helped millions of Americans afford home ownership after
the war in the burgeoning suburbs just off the interstate highway exits (although
it should be noted that minorities were often discriminated against by the FHA in
securing mortgages). The Green New Deal, in turn, will require a similar effort if
it is to succeed.
The First and Second Industrial Revolution infrastructures were engineered
to be centralized, top-down, and proprietary, and they needed to be vertically
integrated to create economies of scale and return profits to investors. The result
is that at the end of the Second Industrial Revolution, the global Fortune 500
companies, most of them US-based, account for $30 trillion in revenue, or
around 37 percent of global GDP, with only 67.7 million employees out of a
global workforce of nearly 3.5 billion people.26 This statistic tells us everything
we need to know about how the benefits of the industrial era have been shared.
That is not to say that the fruits of the first two industrial revolutions in the
nineteenth and twentieth centuries weren’t a boon for large numbers of people,
especially in the Western world. Arguably, most of us in the highly developed
nations are far better off than our ancestors were before we began the industrial
age. However, it’s also fair to say that nearly half of the population of the world
(46 percent), living on less than $5.50 per day, the dividing line that defines
poverty, is at best only marginally better off than their ancestors, and perhaps no
better off.27 Meanwhile, the wealthiest human beings have triumphed. Currently,
the accumulated wealth of the eight richest individuals in the world equals the
total wealth of half of the human beings living on the planet—3.5 billion
people.28
Conversely, the Third Industrial Revolution infrastructure is engineered to be
distributed, open, and transparent, to achieve network effects, and it scales
laterally, allowing billions of people to engage directly with each other both
virtually and physically at very low fixed costs and near-zero marginal cost in
localities and regions that stretch around the world. All they need is a
smartphone and an internet connection to give them instant access to Big Data
and a global network of millions of other businesses and their websites.
This more intimate and inclusive engagement in commerce, trade, and social
life, made possible by a distributed and smart postcarbon Third Industrial
Revolution platform, is being accompanied by a shift from globalization to
“glocalization” as individuals, businesses, and communities engage each other
directly, bypassing many of the global companies that mediated commerce and
trade in the twentieth century. Glocalization makes possible a vast expansion in
social entrepreneurship with the proliferation of smart high-tech small and
medium-sized enterprises (SMEs) 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 transforming the relationship
between national governments and local communities, in a sense, reversing the
locus of responsibility for the workings of the economy and the affairs of
governance from the nation-state to the regions. This change in governance
presages a revolution in the way humanity organizes its economic and social life.
So what role does this leave for the federal government? While the federal
government will be a key player in some of the infrastructure build-out in the
country, its primary responsibility will be to establish the new codes, regulations,
standards, tax incentives, and other financial incentives for the transition into a
Third Industrial Revolution infrastructure and zero-carbon economy. Cities,
counties, and states, in turn, will be tasked with developing their own
customized goals and deliverables, Green New Deal roadmaps, construction
sites, and deployment initiatives for transitioning into a Third Industrial
Revolution paradigm. They will then cross-border and create an integrated
national infrastructure network composed of the Communication Internet, the
Renewable Energy Internet, and the Mobility Internet atop the Internet of Things
platform, stretching across the building stock and built environment. The new
Third Industrial Revolution infrastructure will be accompanied by new business
models that plug into the platforms and take advantage of the new potential
aggregate efficiencies across their value chains and supply chains.
The partial shift in political power from nations to local regions will change
the nature of governance. Although all politics is local, in the glocal era
economic development will also be increasingly distributed between localities
connected all over the world. “Regional empowerment” will be the battle cry of
the coming glocal era.
Some market proponents acknowledge that the rotting infrastructure across
the United States needs to be addressed, and they even support the build-out of
parts of the smart digital Third Industrial Revolution infrastructure, but they are
opposed to a Green New Deal, which they say would mean more Big
Government encroachment in the day-to-day affairs of the American public and
American businesses. They prefer that the federal, state, and local governments
incentivize the private sector with generous tax credits and subsidies. With these
incentives in hand, private developers will come forward and finance the shoring
up of the existing Second Industrial Revolution infrastructure and the build-out
of the Third.
The privatization of the nation’s infrastructure has been picking up speed for
several decades but is now on the verge of exploding as America transitions
from a Second to a Third Industrial Revolution. Many businesses are hoping to
use the current debate over America’s disintegrating infrastructure to make the
case for privatizing much of it in one fell swoop over the course of the next
several decades.
The specter of the privatization of all the public infrastructure that every
American relies on to survive and flourish seems misguided and politically
unwise. Putting every citizen’s daily life in the hands of a disparate array of
unaccountable commercial interests over whom the public has little or no
control, and even less ability to access and sway regarding the services that
maintain everyone’s daily existence, is little more than a capitulation of
democratic governance and oversight. Yet that is already happening—
unfortunately, not only in the United States but, to a lesser extent, in other
countries as well.
More ominous still, consider the prospect of privatizing the entire smart
digital infrastructure that makes up the Third Industrial Revolution. On the one
hand, the opportunity to connect the human race in a global nervous system,
enabling every person, if they so choose, to access every other as part of a
diverse and globally connected figurative family—and at near-zero marginal cost
—is appealing, especially to a younger generation who think of the planet as
their extended home and playing field. On the other hand, what if the smart
digital Third Industrial Revolution infrastructure were to be exclusively in the
private hands of global companies with little or no accountability to the
communities they serve, giving them free license to surveil the lives of every
citizen and sell the data they collect to third parties for marketing and
advertising, or to political parties and lobbyists to advance their agendas?
I love Google. It’s the magic box. Whenever I have a query to search, I ask
Google. But what if Google were the only search engine and everyone in the
world had to turn to it for their inquiries? Facebook is a tremendous service. It
has brought together 2.32 billion human beings in a global embrace, creating the
largest extended virtual cohort in history.29 But if Facebook were the only forum
where we could “meet up” on a global scale, we would each be subject to its
access criteria, 24/7 surveillance, and algorithm governance. The same with
Amazon. The company’s global logistics network is impressive. But if Amazon
were to become the only carrier through which we could send items to one
another, we would all be subject to its dictates and the continued surveillance of
our comings and goings in our daily lives. How likely is this grand new
scenario? Look no further.

Google Governance and the Antidote

In October 2017, Prime Minister Justin Trudeau of Canada held a high-profile

press conference in Toronto. Appearing alongside him were Eric Schmidt, then
the executive chairman of Alphabet Inc., the parent company of Google;
Kathleen Wynne, premier of the Province of Ontario; and John Tory, the mayor
of Toronto. Together they announced a public-private partnership between
Sidewalk Labs, an urban design and development company owned by Alphabet,
and the city of Toronto to develop a mixed-use neighborhood on the Toronto
waterfront.30
The plan is to build out Canada’s first smart, digitally connected urban
neighborhood, replete with state-of-the-art sensors across a seamless Internet of
Things neural system. Ubiquitous sensors will provide surveillance, collecting
data on activity taking place in the homes, the shops, and the streets, with the
goal of helping speed efficiencies and conveniences in commerce, social life,
and governance. If the prototype neighborhood is successful, the next step might
be to expand outward, eventually transforming the entire infrastructure of the
metropolitan region of Toronto into a showcase smart city. The catch is that
Google’s smart city experiment gives the internet giant its first foray into
algorithmic governance over entire cities.
In 2007, humanity reached a milestone, with a majority of human beings
living in urban areas, many in megacities and suburban extensions with
populations of 10 million or more.31 This was the year we became “Homo
urbanus.” Jump a decade to today. Billions of human beings use Google’s search
engine, Google Maps and Waze for location identification and navigation,
YouTube videos, and countless other Google data-driven services, primarily in
dense metropolitan regions. For Google, the next frontier is the privatization of
entire cities under the watchful eyes of the company’s sensor networks.
At the press conference announcing the new partnership between Sidewalk
Labs and Toronto, Schmidt thanked Canada for allowing Google in, saying that
his company’s long-held dream had come true: for “someone to give us a city
and put us in charge.”32
Writing in the Globe and Mail a year later, Jim Balsillie, the former chairman
and co-CEO of Research In Motion, a company that commercializes intellectual
property in more than 150 countries, summed up the significance of this first
trial run in creating a privatized smart city that so excited Schmidt. Balsillie
pointed out that “‘smart cities’ are the new battlefront for big tech because they
serve as the most promising hotbed for additional intangible assets that hold the
next trillion dollars to add to their market capitalizations.” The real commercial
value, according to Balsillie, is that “‘smart cities’ rely on IP and data to make
the vast array of city sensors more functionally valuable, and when under the
control of private interests, an enormous new profit pool.”33
In the year since the official announcement, it has become even clearer that
Sidewalk Labs wants Toronto’s blessing, but it does not relish the city’s active
involvement and oversight in the build-out and management of the smart
neighborhood on the waterfront.
Meanwhile, the ongoing negotiations between Sidewalk Labs and Waterfront
Toronto, the development body for the site, have been steeped in secrecy. As
Balsillie points out, Waterfront Toronto is an “unelected, publicly funded
corporation with no expertise in IP, data or even basic digital rights … in charge
of navigating forces of urban privatization, algorithmic control and rule by
corporate contract.”34 By the closing days of 2018, the outlook for Sidewalk
Labs’ smart city project seemed bleak, at least in its present articulation. The
great fanfare that surrounded the initial announcement a year earlier had faded as
doubts began to pile up among government officials and the general public.
What had begun as a public relations coup for Prime Minister Trudeau,
Canada, and Toronto had devolved into a public nightmare, exposing Waterfront
Toronto to ridicule. The vision of a Google-inspired smart futuristic city had
become lost amid the growing fear of “Big Brother”—Alphabet—taking over a
small segment of Toronto’s waterfront and transforming it with smart technology
into a 24/7 surveillance cloud for the purpose of collecting data on the daily
activity of its citizens, which Sidewalk Labs could exploit by selling it to third
parties for commercial use.
In July 2018, Will Fleissig, the chief executive of Waterfront Toronto and an
early supporter of Sidewalk Labs, resigned abruptly. Shortly thereafter, Julie Di
Lorenzo, a prominent local real estate developer, departed the board of directors
of Waterfront Toronto, saying she was uncomfortable with Alphabet as a partner.
She questioned what might happen if future residents of the smart development
didn’t agree to sharing their data, asking, “Would you segregate them and tell
them ‘you can’t live here’?”35
Bianca Wylie, a technology policy advisor and cofounder of Tech Reset
Canada, expressed the sentiment of many fellow Torontonians when she said
that “we need to have these issues decided by organizations that are accountable
to the people, not by private vendors.” Wylie made clear that she was not
opposed to a smart infrastructure incorporating “plausible surveillance” of use to
residents, businesses, and the community, but, she added, “we need to state
clearly and unambiguously that this infrastructure is public.”36 In October, Ann
Cavoukian, the former information and privacy commissioner of Ontario,
resigned from the venture. What made her resignation particularly meaningful is
that she was commissioned by Sidewalk Labs to help establish a “privacy by
design” protocol for the development, only to find out later that third parties
might enjoy access to “identifiable data.” In her resignation letter, Cavoukian
said, “I imagined us creating a smart city of privacy as opposed to a smart city of
surveillance.”37
The problem does not lie with Sidewalk Labs’ expertise. The company
boasts some of the best talent available for establishing digitally connected,
efficient, and environmentally sustainable smart cities. All to the good. Rather, it
is the business model that is at fault, as is the case with any public-private
partnership in which the commercial interest of the developer is primarily in
securing lucrative revenue streams and profit over time; more often than not, this
compromises the notion that infrastructure should be treated as a public good
and a service everyone relies on and therefore best belongs in the hands of local
governments that represent the will of all the citizenry. (In chapter 6, we will
describe a public-private business model—energy service companies—that
enables private businesses to finance, build out, and manage infrastructure for
governments and secure appropriate revenue streams, while local governments
maintain control over the nature of the deployment and management, with the
citizenry benefiting from the public services rendered.)
Shortly after the Trudeau/Sidewalk Labs press conference, I was in Ottawa
meeting with federal ministers on the prospect of transforming the federal
government building stock into a smart digital, zero-carbon Internet of Things
built environment. In one of the meetings, a deputy minister asked my opinion of
the Toronto announcement. I said that I was not surprised: In all of the seven
regions our global team has worked with to scale smart Third Industrial
Revolution infrastructure, the public voice of the people has been clear. While
the citizenry would welcome the help of businesses in laying out smart
neighborhoods, and even their involvement in helping to scale and manage the
platforms, the oversight and decision-making power had to remain with the
governing authorities and the public. And even then, there was a consensus that
the Third Industrial Revolution digital infrastructure needed to be governed and
accessed as public open-source commons. Further, that oversight and regulation,
in every instance, would need to ensure that every citizen enjoys the unequivocal
right to participate in or opt out from any of the smart services at any time.
The way to ensure public engagement at every step along the way to
transitioning into a green smart city or region is to embed “deep public
participation” and involvement at every stage of development, from conception
to ongoing deployment. This is the takeaway issue in the Google-Toronto smart
city debacle.
Our team’s experience in the European Union might be helpful here. We
have three current green test regions in Europe that have developed
comprehensive Third Industrial Revolution roadmaps and transformed their
jurisdictions into twenty-year construction sites where they are deploying
infrastructure projects. Our prior work in four other regions convinced us that
the traditional model that we were using to engage these governments was
inadequate to the task. We came to the realization that the decision-making
process and governance needed to be compatible with the distributed, open, and
laterally scaled infrastructure being deployed.
When Hauts-de-France (formerly Nord-Pas-de-Calais), the first of these
lighthouse regions, asked our consulting consortium, TIR Consulting Group
LLC, to develop a green zero-emission Third Industrial Revolution deployment
plan, we initially declined. Hauts-de-France is the industrial rust belt of France
and a former coal-mining region, holding more than 9 percent of the mainland’s
population. I suggested to the president of the region that the government
abandon its traditional role of “decider-in-chief” and instead become a
“facilitator” of a more laterally distributed and shared governance made up of
hundreds of individuals in primary committees and several thousand individuals
in secondary informal networks from the public sector, the business sector, civil
society, and academia working together in a “peer assembly,” reflecting the more
distributed, laterally scaled infrastructure they were being asked to envision and
deploy.
We wanted to be unequivocal that we were not simply talking about
soliciting ideas, suggestions, and approvals from focus groups and stakeholder
groups. Rather, we were talking about ongoing peer assemblies crossing all the
generational cohorts that would continue the work on the construction site over
twenty years, irrespective of which political party might be governing at any
moment, in order to maintain both continuity and solidarity to ensure the long-
term success of the infrastructure transition. Hauts-de-France agreed to this
radically new governing arrangement, and we began the collaboration.
The region, which subsequently received the coveted European
Entrepreneurial Region Award from the EU Committee of the Regions,
representing all 350 regions across the twenty-eight member states, is in its sixth
year of TIR deployment and is currently involved in over 1,000 projects
employing several thousands of its citizens.38 It has become the poster child of
the new peer-assembly approach to economic and political empowerment.
Similar peer assemblies were established in our other two test regions: the
twenty-three cities in the Metropolitan Region of Rotterdam and the Hague,
which is the petrochemical complex of Europe, and Luxembourg, a key financial
and political capital of the European Union.
These peer-assembly governing models allow regions to move more quickly
to deploy infrastructure rollouts while maintaining a cohesive approach to
developing their construction sites over time, with little citizen backlash.
Although other localities and regions around the world have experimented with
small-scale peer assemblies that are narrowly circumscribed by very specific
projects with limited time spans, the three lighthouse test regions mentioned
above are, to our knowledge, the only large-scale peer assemblies currently in
deployment.
When Angela Merkel became chancellor of Germany, she invited me to
Berlin in the opening weeks of her administration to address the question of how
to incentivize new business opportunities and create new employment in
Germany. I described the distributed, open, and laterally scaled architecture of
the Third Industrial Revolution infrastructure and how its design features are
best taken up and deployed by localities and regions who then customize it to
their own unique circumstances, after which they digitally connect up with other
regions. The chancellor commented that she liked this distributed, laterally
scaled Third Industrial Revolution infrastructure for Germany. I asked the
chancellor why, and she said, “Jeremy, you need to know a little more about the
history of Germany. Our country is a federation of states, and these states
exercise a great deal of independence in managing their economic affairs and
governance. The Third Industrial Revolution governance model fits Germany,
assuring that the economic decision-making process and government oversight is
lodged at the local and regional level.”
Similarly, municipalities, counties, and states across the United States are
also uniquely suited to adopt the peer-assembly model in the scale-up of
customized Third Industrial Revolution infrastructures. Like Germany, the
United States is conceived as a federal republic in which political power and
economic development traditionally rest largely in the hands of governing
jurisdictions at the state, municipal, and county levels. The federal government,
for its part, is expected to represent and uphold shared national narratives,
provide a sense of national identity, ensure the nation’s security, and create the
laws, statutes, regulations, codes, and incentives that allow localities and states
to be in alignment across the country.
While the federal government will be important in framing the Green New
Deal transformation, much of the heavy lifting in the deployment of the green
infrastructure revolution will fall to the states, municipalities, and counties, as it
should in an emerging laterally distributed glocal era.
 2

POWER TO THE PEOPLE

The Sun and Wind Are Free

Where do we stand at this inflection point in history? There is a growing sense

that we are paying a terrible price for the fossil fuel civilization that we built and
exulted in for more than two centuries and that is now taking us into a series of
climate-changing events and a new reality that we can barely fathom.
Humanity is experiencing a great awakening of a different kind. We are
beginning to see ourselves as a species and just beginning to ponder our
common fate on a planet where nature’s rhythms and patterns are becoming
alien.
A younger generation is coming forward with an intimate sense of the
darkness that is unfolding around them and a steely determination to break
through the lethargy that has allowed us to slip to the very edge of a planetary
crisis. They are angry, determined, and motivated, and unwilling to listen to why
we can’t do this and can’t do that, mulling over what’s realistic and what’s not, at
a moment when realism itself seems so unrealistic and inadequate to the mission
ahead of us.
However, we are not totally in the dark and without possibilities. There is a
way forward. A path has been laid across the European Union and the People’s
Republic of China, and even here at home in California, New York, Texas,
Washington State, New Mexico, Hawaii, and other scattered parts of America,
that can take us on a new journey away from a death-driven Second Industrial
Revolution and into a life-affirming Third Industrial Revolution.

How EU Political Activists Launched the Green New Deal

The enthusiasm around a Green New Deal that is echoing across America is
music to my ears—a sweet refrain that takes me back to 2007. Just as Alexandria
Ocasio-Cortez and the Sunrise Movement have captured the attention of the
country with an urgent “slap in the face” reality check, that feeling and sense of
urgency surfaced across the European Union more than a decade ago.
The EU was on the move. By 2007, Europe had surpassed the United States
and become the “idea factory” and deployment engine for decarbonizing society.
That year, the EU was finalizing the 20-20-20 formula, binding the EU member
states to the Great Disruption that would bring on an ecological age. These new
protocols required all EU member states to increase their energy efficiency by 20
percent, reduce their global warming emissions by 20 percent (based on 1990
levels), and increase their generation of renewable energies by 20 percent by the
year 2020, making the EU the first major political power to establish a formal,
legally binding commitment to address climate change and transform the
economy of hundreds of millions of citizens.1 I’ll come back to the history of
this path-changing event and what has happened since in the coming pages.
The 20-20-20 mandate was a powerful tonic, providing Europe with the
framework it needed to transform the continent into a zero-carbon society. While
the ink was still drying on the new global warming mandates, the first buds of a
Green New Deal movement appeared.
Nine people, all of whom had been longtime climate campaigners, came
together in the UK to create the Green New Deal Group.2 The group was
eclectic, made up of individuals from a wide range of fields, including experts in
energy, finance, journalism, and environmental science—just the kind of
interdisciplinary collective needed to rethink the economic paradigm in a world
facing climate change.
In 2008, the Green New Deal Group issued a 48-page declaration titled A
Green New Deal: Joined-Up Policies to Solve the Triple Crunch of the Credit
Crisis, Climate Change and High Oil Prices.3 This plan encapsulated the central
themes adopted that year around the newly mandated 20-20-20 formula and
outlined the key building blocks and components of what would become a zero-
carbon Third Industrial Revolution paradigm shift.
Admittedly, it’s a bit ironic that a European-based group latched on to
America’s greatest public works project—President Roosevelt’s New Deal—to
find inspiration for envisioning a transformation of the European economy into a
green era. But that’s exactly where the Green New Deal got its legs.
Just a year later, in 2009, the Heinrich Böll Foundation—the official
foundation of the German Green Party—issued a manifesto titled Toward a
Transatlantic Green New Deal: Tackling the Climate and Economic Crises.
Heartened by the election of Barack Obama to the US presidency and
recognizing that the US and the EU account for “a large share of the world
economy,” our EU friends hoped that a Green New Deal might be the right
narrative at the right time to bring the US and the EU together in a powerful
transatlantic partnership to advance a postcarbon transition.4 In November of that
year, the Heinrich Böll Foundation held a conference in Berlin where we
discussed the potential of the Green New Deal as an overarching narrative and
game plan for the upcoming Copenhagen Climate Summit several weeks later.5
That same year, the European Greens picked up the theme of a Green New
Deal as the party’s political platform and published a detailed plan called A
Green New Deal for Europe: Towards Green Modernisation in the Face of
Crisis.6 The report was the policy document that the European Greens took into
the 2009 EU elections as their playbook, and it was championed by the EU’s
most prominent green leaders, Claude Turmes and Daniel Cohn-Bendit, both
colleagues with whom I had worked closely over the years.
The United Nations Environment Programme (UNEP) jumped into the fray
that year with a scholarly report written by Edward Barbier titled Rethinking the
Economic Recovery: A Global Green New Deal.7 The report helped move the
new narrative across the UN agencies and departments and quickly spread to
nations around the world, bringing new players into the Green New Deal
narrative.
South Korea also joined the ranks in 2009 with its own Green New Deal,
signing off on a $36 billion initiative over a four-year period to build out low-
carbon projects and create 960,000 new jobs, primarily in the fields of
construction, rail, fuel-efficient vehicles, retrofitted buildings, and energy
conservation.8
In 2011, I coauthored a book with the famed Spanish architect Enric Ruiz-
Geli titled A Green New Deal: From Geopolitics to Biosphere Politics, focusing
on the greening of architecture and the built environment in a climate-changing
world.9
A few years later, the European Federalist Movement took the Green New
Deal forward with a petition titled “New Deal 4 Europe: Campaign for a
European Special Plan for Sustainable Development and Employment” and used
it to launch a 2015 European-wide citizen initiative to mobilize support for a
transition into a zero-carbon green economy.10 The Green New Deal narrative
continued to gain momentum over the years, becoming a theme in the 2019
European elections.
Meanwhile, in the United States, “the Green New Deal” became the moniker
for the US Green Party and the presidential run of Jill Stein in 2016.11
Bringing the Green New Deal up to date, Data for Progress, a think tank that
provides research and polling on left-leaning issues, published its own extensive
report in 2018 titled A Green New Deal: A Progressive Vision for Environmental
Sustainability and Economic Stability.12 In the fall of 2018, both the fledgling
Sunrise Movement and US Representative Alexandria Ocasio-Cortez joined the
Green New Deal ranks with their own declaration.13
To sum up, the ground had been laid for a Green New Deal movement over a
period of a decade. That movement is now coming to fruition with the
ascendance of a powerful new millennial- and Gen Z–driven political revolution
in both the European Union and the United States.

As noted, at the heart of the Green New Deal transition are the four sectors that
make up the Second Industrial Revolution infrastructure—
ICT/telecommunications; energy and electricity; internal combustion mobility
and logistics; and the residential, commercial, industrial, and institutional
building stock. In just the past decade, all four of these infrastructure sectors
have begun to decouple from the fossil fuel civilization and recouple with green
energies, clean technologies, sustainable efficiencies, and the accompanying
processes of circularity and resilience that are the central features of an
ecological society, leaving stranded fossil fuel assets everywhere. In 2015,
Citigroup sent shockwaves through the energy industry and the global economy
by predicting $100 trillion in stranded fossil fuel assets if the Paris Climate
Summit succeeded in establishing a binding commitment by the nations of the
world to limit global warming by 2°C.14
The mention of $100 trillion in stranded fossil fuel assets caught the attention
of the global business community. Again, stranded assets are assets that have
been prematurely written down before their expected life cycle runs its normal
course. Stranded assets are part of the normal day-to-day operations of the
market. But occasionally, an entire class of assets can suddenly and unexpectedly
become stranded. This generally happens when a revolutionary new class of
technologies and accompanying infrastructure platforms suddenly enter the
marketplace, producing what Joseph Schumpeter termed “creative destruction,”
quickly depreciating the value of existing assets, killing them off and moving
them from the asset column to the liability column on the balance sheet. These
types of disruptions most often characterize the great paradigm shifts in
communication technology, sources of energy, modes of transport, and changes
in habitats—for example, the shift from postal communication to the telephone,
or from the horse and buggy to the automobile.
Stranded assets are usually a subject of interest only to accountants.
However, lately the term has suddenly burst into the public arena, at least within
financial circles and corporate suites, where management is witnessing an epic
battle emerge, pitting the dying energies, technologies, and infrastructure of a
twentieth-century fossil fuel civilization against the emerging green energies and
accompanying digital technologies of a smart twenty-first-century Third
Industrial Revolution.
Much of the early pioneering work in examining the trajectory and impact of
stranded assets within industries and across supply chains has come from the
Smith School of Enterprise and Environment, an interdisciplinary hub of the
University of Oxford, and particularly the research of Ben Caldecott, who directs
the Oxford Sustainable Finance Programme.
Shortly after Citigroup dropped the $100 trillion bombshell, Mark Carney,
the governor of the Bank of England, informed industry leaders in a speech
delivered at a Lloyd’s of London dinner that investors might be subject to
“potentially huge” losses from agreed-upon climate change targets set by the
nations of the world, resulting in massive reserves of oil and gas being “literally
unburnable,” and stranding assets across the fossil fuel civilization. Carney
cautioned that “once climate change becomes a defining issue for financial
stability, it may already be too late.”15
Three years later, in 2018, the issue of stranded fossil fuel assets was no
longer tied to nation-states’ climate target agreements, which, by this time, were
voluntary and often not upheld. Rather, the more serious question that had now
entered the public dialogue centered around the falling cost of solar and wind
technologies and green power generation and storage in the marketplace, which
is driving the four principal sectors of the Second Industrial Revolution to
decouple from the fossil fuel infrastructure at a speed and a scale that would
have been unthinkable just a few years ago, leaving potentially trillions of
dollars in stranded fossil fuel assets behind and abandoned. Here’s a current look
at the unfolding disruption.
 ICT and the Communication Internet

When we think about which sector of the global economy uses the most energy
and emits the most global warming gases, we usually tick off electricity,
buildings, heat production, transportation, and maybe, as a tentative afterthought,
throw agriculture into the mix. The ICT sector, which includes
telecommunications, the internet, and data centers, rarely comes up. In fact, even
researchers monitoring energy use and global greenhouse gas emissions seldom
turn their thoughts to the ICT-related industries, as evidenced by the virtual lack
of studies, at least until very recently.
Now, with the exponential rise and use of ICT devices, and especially tablets
and smartphones, the introduction of more network equipment, and the
proliferation of data centers, as well as the embedding of billions of sensors in
the Internet of Things, the amount of sheer data being generated, stored, and sent
is escalating—and along with it, the amount of electricity used in the process.
A 2018 study assessing global warming emissions’ footprint ran the numbers
and found that, “if unchecked, ICT GHGE [greenhouse gas emissions] relative
contribution could grow from roughly 1–1.6% in 2007 to exceed 14% of the
2016 level worldwide GHGE by 2040, accounting for half of the current relative
contribution of the whole transportation sector.”16
This projection doesn’t even include—but should—the energy used and the
carbon emissions in manufacturing all the electronic devices. Nor does it include
the short life cycle of these devices in an industry compelled to bring a new
generation of devices into the market, especially smartphones and tablets, every
two years in the quest for larger profit margins. The use of energy in just the
manufacturing of these devices accounts for 85–95 percent of the devices’ life-
cycle annual carbon footprint.17 If we take still another step back in the ICT
supply chain, the projection doesn’t include energy used and emissions emitted
in extracting and processing rare earths and embedding them into devices, nor
the cost of waste disposal for literally billions of devices.
Although smartphones and tablets are big players in energy use and are on a
steep upward growth curve, it’s the ICT infrastructure that consumes the most
energy, uses the most electricity, and emits the most greenhouse gas emissions,
accounting for 70 percent of the ICT carbon footprint. And it’s the proliferation
of data centers that accounts for most of the energy use and carbon footprint,
which by 2020 is estimated to be near 4 percent of all of the world’s power and
45 percent of the entire ICT footprint.18 The Green New Deal agenda will have
to pay close attention to the ICT sector’s decarbonization as it comes to use an
increasing percentage of the global electricity being generated.
The world’s giant internet companies are leading the way in decoupling from
fossil fuels and reinvesting in green energy in the ICT sector, with Apple,
Google, and Facebook setting the pace. In April 2018, Apple announced that all
of its data centers worldwide are now powered by renewable energy. The
company also announced that twenty-three of its key manufacturing partners
around the world have agreed to power all of Apple’s production with 100
percent green energy. Commenting on this milestone, Apple’s CEO, Tim Cook,
said, “We’re going to keep pushing the boundaries of what is possible with the
materials in our products, the way we recycle them, our facilities and our work
with suppliers to establish new creative and forward-looking sources of
renewable energy because we know the future depends on it.”19 Google achieved
100 percent renewable energy usage in its data centers in 2017 and is currently
operating twenty renewable energy projects with a total investment of $3.5
billion in renewable energy infrastructure.20 In July 2017, Facebook announced
that “all” of its new data centers from here on out will be powered by 100
percent renewable energy.21
The internet behemoths are out front in decoupling from the fossil fuel
civilization, but many other leading ICT and telecom companies are running
nearly apace. The numbers are significant. Microsoft and SAP have been 100
percent powered by renewable energy since 2014.22 AT&T, Intel, and Cisco,
among others, are quickly integrating renewable energy into their companies’
business operations.23
Given that solar and wind are now cheaper than coal and head-to-head with
oil and natural gas, and within just a few years will be far cheaper, and with the
marginal cost of generating solar and wind near zero, the upfront financial
commitment to decouple from fossil fuels and reinvest in renewable energies is,
simply speaking, a smart business decision. Add to the equation the need to be
able to secure data centers and other sensitive operations if the power grids and
electricity lines go down (more likely with the increasing incidence of climate
events and cyberterrorism), so that these companies’ off-grid data center
facilities and other operations will remain secure.

The Renewable Energy Internet

Unbeknownst to most government leaders, a large swath of the business

community, and a majority of the public, solar and wind energy generation have
both been on a steeply declining exponential cost curve, not unlike the
exponential curve experienced earlier by the computer industry. ENIAC, the first
electronic computer, was invented at the University of Pennsylvania in 1945.24
Thomas Watson, then president of IBM, allegedly predicted that the world
demand would not extend beyond five computers because of the potentially
prohibitive cost. What no one could predict back then was developments in the
1970s at Intel, where engineers were successful in doubling the number of
components per integrated circuit every two years, putting computer chips on a
plunging exponential curve in cost. Today, over 4 billion people connect to the
internet, largely due to the availability of affordable smart devices.25
Similarly, in 1977, the fixed cost per watt of silicon photovoltaic cells used in
solar panels was $76; today, that cost has dropped to below 50 cents.26 Currently,
power and utility companies are quietly buying long-term power generation
contracts for solar for as little as 2.42 cents a kilowatt-hour.27 And according to a
2019 report released by the International Renewable Energy Agency (IRENA),
onshore wind is being generated at as low as 3 to 4 cents per kilowatt-hour,28
with no end in sight in terms of the exponentially falling cost of generating the
new green energies.29
The impact on society of near-zero marginal cost solar and wind energy is all
the more pronounced when we consider the enormous potential of these energy
sources. The sun beams 470 exajoules of energy to Earth every eighty-eight
minutes—equaling the amount of energy human beings use in a year. If we could
grab hold of one-tenth of 1 percent of the sun’s energy that reaches Earth, it
would give us six times the energy we now use across the global economy.30
Like solar radiation, wind is ubiquitous and blows everywhere in the world—
although its strength and frequency vary. A Stanford University study on global
wind capacity concluded that if 20 percent of the world’s available wind were
harvested, it would generate seven times more electricity than we currently use
to run the entire global economy.31
According to a detailed study conducted by researchers from Stanford
University and the University of California at Berkeley and published in Joule in
2017, the United States has the capacity to provide nearly 100 percent of its
energy needs with renewables, with solar contributing 57.28 percent, wind
contributing 38.41 percent, and the remaining 4 percent made up of hydro, wave,
and geothermal.32
There are more than 3,000 electricity providers in the United States—made
up of 2,000 publicly owned utilities (POUs), 187 investor-owned utilities
(IOUs), 876 cooperative electric utilities (co-ops), 9 federal power agencies, and
several hundred power marketers—serving 151 million customers.33
It’s no secret that the electricity sector is beginning to decouple from the
fossil fuel industry in both the European Union and China, while still taking
baby steps in most of America. The Renewable Energy Internet is comprised of
five foundational pillars, all of which have to be phased in simultaneously for the
system to operate efficiently.
First, buildings will need to be refurbished and retrofitted to make them more
energy efficient so that solar energy technology can be installed to generate
power for immediate use or for delivery back to the electricity grid for
compensation. Second, ambitious targets must be set to replace fossil fuels and
nuclear power with solar- and wind-generated energy and other renewable
energy sources. To achieve this goal, incentives need to be introduced to
motivate early adopters to transform buildings and property sites into micro
power-generating facilities. Third, storage technologies, including batteries,
hydrogen fuel cells, water pumping, etc., will need to be embedded at local
generation sites and across the electricity grid to manage both the flow of
intermittent green electricity and the stabilization of peak and base loads. Fourth,
advanced meters and other digital technology will need to be installed in every
building to transform the electricity grid from the current servomechanical
operation to digital connectivity capable of managing multiple sources of green
electricity flowing to the grid from local generators. The distributed smart
electricity infrastructure will enable formerly passive consumers of electricity to
become active managers of their own green electricity. Fifth, parking spaces will
need to be equipped with charging stations to allow electric vehicles to secure
power from the new Energy Internet. Millions of electric vehicles connected to
the Energy Internet will also provide a storage system that can send electricity
back to the grid during peak demand, when the price of electricity has spiked,
while vehicle owners can be compensated for contributing their electricity to the
network.
The construction of a national smart grid across the country will serve as the
backbone of the Energy Internet. The Electric Power Research Institute (EPRI)
provides a comprehensive definition of what makes up the national smart grid:

Today’s power system … is primarily comprised of large central-

station generation connected by a high voltage network or Grid to
 local electric distribution systems which, in turn, serve homes,
business and industry. In today’s power system, electricity flows
predominantly in one direction using mechanical controls.… The
Smart Grid still depends on the support of large central-station
generation, but it includes a substantial number of installations of
electric energy storage and of renewable energy generation
facilities, both at the bulk power system level and distributed
throughout. In addition, the Smart Grid has greatly enhanced
sensory and control capability configured to accommodate these
distributed resources as well as electric vehicles, direct consumer
participation in energy management and efficient communicating
appliances. This Smart Grid is hardened against cyber security
while assuring long-term operations of an extremely complex
system of millions of nodes.34

Back in 2011, EPRI estimated that the national smart grid and accompanying
storage technology would cost upwards of $476 billion over a twenty-year
period to construct but that the grid would create between $1.3 trillion and $2
trillion in overall economic benefits. EPRI also estimated that the installation of
a national smart grid could cut emissions by “58 percent relative to 2005
emissions.”35
But that study was done in the very early years of the transformation of the
electricity sector from fossil fuels to renewable energies and at the onset of the
decoupling of electric utilities, transportation, and the building sector from fossil
fuels and the recoupling to renewable sources of energy for electricity. And in
2011, electric vehicles were in their infancy, and the Internet of Things was still
largely a concept and had not yet rolled out across society, connecting everything
with everyone in an emerging smart digital infrastructure. There was also little
discussion in 2011 about a shift from gas and oil heating to all-electric heating
across the nation’s residential, commercial, industrial, and institutional building
stock.
These new developments will dramatically increase the demand for
electricity to power and move economic and social life which, in turn, will
require ever-greater complexity in managing renewable energies and the
generation of electricity coming into and out of the national grid from literally
everywhere. The speed at which these changes are occurring suggests that at
least the skeletal Energy Internet will need to be built out in a single decade
rather than over the two decades projected by the EPRI study or else the system
will not be able to handle the demands placed on it by the greater use of
electricity over just the next ten years. Failure to do so will hamper and even
forestall the Green New Deal transition. If that were to happen, America would
not be able to reach the decarbonization target needed to meet the IPCC
deadline, set in stone, to avoid tipping over the 1.5 degrees Celsius rise in the
Earth’s temperature.
Moreover, the increased demands on the national grid and the growing
complexity of integrating all of the components and services ups the bill for
getting the national smart grid system online and operating smoothly throughout
the United States.
For example, a new study published in January 2019 by the Brattle Group, a
leading energy and consulting firm specializing in the energy and electricity
fields, estimates that the build-out and scale-up of just the “transmission
infrastructure” of the smart national power grid will cost upward of $40 billion
annually between 2031 and 2050. According to a 2016 study by the National
Renewable Energy Laboratory (NREL), even if solar panels were installed on
every “appropriate” building in the United States, this distributed energy would
only provide approximately 40 percent of the country’s current electricity
demand.36 This will mean that utility-scale solar and wind generation in less-
populated rural areas in the western half of the country where there is ample
solar and wind will need to be brought online to send green electricity to the
eastern half of the United States to complement the distributed solar and wind
generated in metropolitan regions—all of which require the build-out of the
high-voltage national transmission system. This investment in transmission
infrastructure will be essential, according to the Brattle Group, to “ensure that
the grid is robust, flexible, capable of maintaining high levels of reliability, and
resilient against energy threats.”37
Other studies are projecting differing estimates for various parts of the
national smart grid infrastructure that also need to be scaled. All these studies at
this point in time are best-guess scenarios given the speed at which the national
electricity grid is moving from a fossil fuel–based centralized system to a
distributed electricity system based on potentially millions of solar- and wind-
generation sites feeding in and off a smart highly digitized nationwide power
grid. There will be a need to bring together all the stakeholders at the federal,
state, and local levels to begin the process of fine-tuning both the prioritization
of the various components of the national electricity infrastructure, their costs
over time, and how they will be integrated into a nationwide operating system
over a 20-year period.
The phase-in and integration of the five pillars that make up the operating
platforms of the Renewable Energy Internet transform the electricity grid from a
centralized to a distributed system, and from fossil fuel and nuclear generation to
renewable energy. In the new system, every business, neighborhood, and
homeowner becomes a potential producer of electricity, sharing their surplus
with others on a smart Energy Internet that is beginning to stretch across national
and continental landmasses. America’s Green New Deal will need to heed the
lessons we learned in Europe and, from the get-go, ensure that all five pillars of
the Renewable Energy Internet are brought together as a seamless whole or risk
setbacks that will delay the successful deployment of the Third Industrial
Revolution paradigm.
In Germany, the federal government established a feed-in tariff across the
country to spur businesses, neighborhoods, and individuals to install solar panels
and wind turbines, for which they would receive a premium price above the
market price for selling their green electricity back to the grid. The incentive
worked. Small and medium-sized enterprises, neighborhood associations, and
farmers created electricity cooperatives, secured bank loans, and are currently
generating solar and wind energy, which they are selling back to the national
power grid. In 2018, all renewables claimed a 35.2 percent share of energy
sources in gross German power production; nearly 25 percent of all the power
was solar and wind, and much of it was being produced by small electricity
cooperatives.38
Germany’s once-powerful electric utilities—E.ON, RWE, EnBW, and
Vattenfall—are producing only 5 percent of the new green electricity of the
twenty-first century, taking them out of the game of “generating” green
electricity.39 To their credit, these companies were ideally suited to generate
electricity from centralized sources of energy—coal, oil, and natural gas—which
require large amounts of capital to extract, transport, and transform into electric
power on the grid. The enormous capital requirements inevitably led to the
erection of giant, vertically integrated business operations to create economies of
scale and return profits to investors.
The new green energies, however, are distributed rather than centralized. The
sun shines everywhere, and the wind blows everywhere, which means that they
can be harnessed everywhere—on rooftops and along terrains—favoring literally
millions of micro power-generating sites. The shift from fossil fuels to green
energy is “power to the people,” both figuratively and literally, as hundreds of
millions of people become producers of their own energy and electricity where
they work and live. This is the beginning of the great democratization of power
in communities around the world.
Critics have long argued that Germany’s love affair with renewable energy
hides a darker story: the country’s continued reliance on dirty coal. The fact is,
while solar and wind make up nearly 25 percent of the share of energy sources in
gross German power production, and are now cheaper than coal, Germany relies
on coal for more than one-third of its energy needs.40 Why is Germany still using
coal? It has to do with the politics of how to bail out those regions of Germany
that rely on mining coal to maintain their local economies and employments. To
address this issue, a German government commission announced in January
2019 that it would embark on an ambitious plan to completely eliminate coal-
generated energy over the next twenty years and, in return, compensate the coal
regions with €40 billion to assist their local economies in transitioning into the
green era.41 Other countries around the world that continue to rely on coal are
watching the German experiment, realizing that they, too, will have to quickly
phase out coal while assisting their coal-producing regions in staying on their
feet.
The International Trade Union Confederation (ITUC), representing 207
million unionized workers in 331 affiliated organizations in 163 nations and
territories, has drawn international attention to the need to address the plight of
stranded workers and stranded communities in what is likely to be an accelerated
exit from the fossil fuel civilization. The confederation has established a “Just
Transition Centre” to assist stranded workforces and disadvantaged communities
in embracing the new green business opportunities and mass employment in the
emerging green energy economy.
Sharan Burrow, the general secretary of the International Trade Union
Confederation, warns that the “sectoral and economic transformation we face is
on a scale and within a timeframe faster than any in our history.”42 Fortunately,
the statistics show that even in the early stages of the transition from a fossil fuel
culture to a renewable energy society, green semiskilled, skilled, and
professional jobs exceed employment in the conventional energy sector in many
communities and regions. Burrow makes clear, however, that local and national
governments need to step up and “establish just transition funds in all countries
and for vulnerable communities, regions, and sectors” to cover “investment in
education, reskilling and retraining; extended or expanded social protections for
workers and their families; and grant, loan and seed capital programmes for
diversifying community and regional economies.”43
The democratization of energy resulting from the falling costs of solar- and
wind-harvesting technology, along with early adoption by newly established
electricity cooperatives, has not only disrupted the fossil fuel workforce but also
shaken the power-generation and electric utility industry, forcing a disruption in
their business models. Many of the world’s giant power and electric utility
companies are quickly decoupling from the fossil fuel industry and moving to
manage the green energy being produced by millions of individuals in
cooperatives while establishing a new business model of energy services for
customers.
In the new energy practice, the electricity companies will mine Big Data on
electricity consumption across each client’s value chains and use analytics to
create algorithms and applications to help their clients increase their aggregate
energy efficiency and productivity and reduce their carbon footprint and
marginal cost. Their clients, in return, will share the aggregate efficiency and
productivity gains with the electricity companies. Power companies will profit
more from managing energy use more efficiently and selling less rather than
more electricity.
In 2006, Utz Claassen, the CEO of EnBW, invited me to Germany on two
separate occasions to meet with his senior staff to help lay out a strategy to
transition the company out of fossil fuels and nuclear power and into the
renewable energies and accompanying energy services of a Third Industrial
Revolution.44 Claassen was quick to jump onboard, informing his five hundred
senior employees at a mass meeting that EnBW would lead the German power
and electric utility companies into the new era of postcarbon distributed
renewable energy services. In 2012, EnBW announced its plan to transition from
fossil fuels and nuclear power and pay more attention to renewable energies and
energy services.45
In 2008, I received a similar invitation from E.ON to engage in a public
discussion with its chairman, Dr. Johannes Teyssen, on the new business model
for managing energy services in the emerging green society. Eight years later,
E.ON split into two companies, one remaining with the legacy businesses in
conventional fossil fuel energies and nuclear power and the other focusing on
renewable energy services, to adjust to the disruptive changes in the German
power and electric utility sector that were forcing a paradigm shift.46
Vattenfall and RWE, the other two major German power and electric utilities,
have announced similar transition strategies based on the new business model
that we introduced in Europe.47 German power companies, who just a decade
earlier were among the unrivaled giants of the European power industry,
changed course, recognizing that they were facing an old and outmoded energy
regime and its accompanying infrastructure of stranded fossil fuel assets that was
no longer a viable business model.
Nor were the German power companies an aberration. China has now
entered the renewable energy field and currently leads the world in the
manufacture and installation of solar- and wind-harvesting technology. In 2017,
China accounted for more than 45 percent of the global total investment in
renewable energy.48
In December 2012, the Xinhua News Agency reported that Premier Li
Keqiang had read The Third Industrial Revolution and had instructed the
National Development and Reform Commission and the Development Research
Center of the State Council to read it and follow up with a thorough study of the
ideas and themes it puts forth.49 Wang Yang, then the Communist Party secretary
of Guangdong—the nation’s leading industrial hub—and a member of the
Politburo, and shortly thereafter a vice premier of the country, also championed
the book publicly, helping move the narrative across China between 2013 and
2018. (Wang Yang is currently number four on the hierarchy of the seven-person
standing committee of the Politburo of China.) I subsequently traveled to China
on four official visits in September 2013, October 2014, October 2015, and
March 2016, meeting with Wang Yang and other top government officials from
the National Development and Reform Commission, the Development Research
Center of the State Council, the Ministry of Industry and Information
Technology, and the China National Academy of Sciences to discuss the Chinese
transition into a Third Industrial Revolution economy. During the first two visits,
the vice premier expressed his government’s determination to ensure that China
is among the leaders in deploying a green Third Industrial Revolution.
Three months after my first visit in September 2013, the government of
China announced a massive financial commitment to lay out a digital Energy
Internet across China, so that millions of Chinese homeowners and apartment
dwellers and thousands of Chinese businesses can produce their own solar- and
wind-generated green electricity in and around their residential, commercial, and
industrial buildings and share surpluses with each other on the national
electricity grid. The chairman of the China State Grid Corporation, Liu Zhenya,
accompanied the announcement with the publication of an article titled “Smart
Grid Hosting and Promoting the Third Industrial Revolution.” In the essay, Liu
Zhenya described China’s ambitious plan to digitalize the electricity grid and
transform it into an Energy Internet. The distributed, collaborative, peer-to-peer,
and laterally scaled energy infrastructure will alter the economic life of China
while establishing its commanding leadership in the next great economic
revolution. The announcement made by Liu Zhenya of the decision to introduce
the Energy Internet as the “intercontinental backbone network” for a new
economic era represents a decisive moment in the history of China. According to
Chairman Liu Zhenya, if we “can firmly grasp the historical opportunity for the
Third Industrial Revolution, [it] will largely determine our position in future
global competition.”50
In November 2014, President Xi Jinping surprised the world community by
announcing his country’s commitment to increase the use of non–fossil fuel
energies in primary energy consumption—primarily solar and wind—to 20
percent by 2030.51 Bloomberg New Energy Finance’s (BNEF) annual long-term
economic analysis of the world’s power sector has China benefiting from having
62 percent of its electricity being supplied by renewables by 2050.52 This would
mean that the majority of energy powering the Chinese economy would be
generated at near-zero marginal cost, making China and the European Union the
two most productive and competitive commercial spaces in the world.
While China followed the EU’s lead in the first generation of the solar and
wind energy transition, a visionary Chinese green energy pioneer, Li Hejun, the
founder and CEO of Hanergy, leaped ahead in second-generation green energy
adoption, becoming the world’s number-one solar thin-film producer. In his 2015
biography, China’s New Energy Revolution, Li Hejun said that he “was deeply
moved [by the] powerful set of coordinates and insights” in The Third Industrial
Revolution and was particularly struck by the contention that solar energy was
“more suitable for future independent and distributed production.”53
In September 2013, Li Hejun, who at the time was also the vice chairman of
the powerful All-China Federation of Industry and Commerce, invited me to
Beijing to share the vision, theory, and practical application of renewable
energies—and the role China might play in the next great energy revolution—
with twenty of China’s key policy leaders, thought leaders, and entrepreneurs.
The meeting was a seminal event that helped galvanize support behind the
Chinese leadership’s new commitment to establishing the green business
opportunities of an ecological era.54
Fast-forward to 2018. Hanergy leads the world in thin-film solar power
technologies. Its new “solar powered electric express delivery cars,” equipped
with thin-film modules, are on the road and can travel 100 kilometers a day.55
The company, which holds the world record for solar efficiency at a 29.1 percent
conversion rate, is also using thin film to power unmanned aerial vehicles,
backpacks, umbrellas, and a range of other items, allowing individuals to carry
the sun’s energy with them wherever they go to power much of what they do.56
China’s renewable energy sector already employs 3.8 million people.57 The
manufacturing, installing, and servicing of solar- and wind-harvesting
technology and the conversion of the country’s electricity grid from a
servomechanical system operating on fossil fuels and nuclear power to a digital
Renewable Energy Internet will spawn millions of additional jobs in the coming
three decades.
The US power and electric utilities are just beginning to catch up to their
European and Chinese counterparts. San Antonio, Texas, is America’s seventh-
largest city in population, and its public electric utility, CPS Energy, is the largest
municipally owned energy and electric utility in America and a prime
contributor to the revenue of the city.58 In 2009, CPS Energy and the City of San
Antonio invited our TIR team to collaborate on a master plan to transition the
metropolitan region into the first zero-emission Third Industrial Revolution
infrastructure in the United States. Our team included twenty-five experts from
around the world and across the sectors of ICT, the renewable energy industry,
global transport and logistics, architecture, construction, urban planning, and
economic modeling and environmental design.59 Aurora Geis, the chairwoman of
CPS, headed up their team, and Cris Eugster, at the time the sustainability
director and now the COO of CPS, guided the day-to-day efforts.
The roadmap process took place over several months. At the time, San
Antonio was pivoting between two approaches to its energy future. The
company had been the first American electric utility since the nuclear reactor
meltdown at Three Mile Island in 1979 to commission two nuclear power plants
and had begun the planning stages toward construction before we arrived on the
scene.60 CPS was also looking at an equally bold future course that would take it
into wide-scale wind and solar energy generation across the state and had begun
to make forays into these new energy fields as well.
There was already opposition in the city to building two nuclear power plants
nearby. In addition, there was concern that the nuclear power plants might
experience the kind of cost overruns that had plagued other nuclear power plant
installations, jeopardizing the revenue of CPS and the city of San Antonio. CPS
had commissioned a study on the potential risks of cost overruns, and the report
projected the possibility that the cost could be as much as 50 percent higher than
originally estimated when the commitments were signed off.
Our consulting group, at the time, urged CPS to grab hold of the green
energy option. We argued that the wind potential in Texas alone could catapult
the state into a green zero-emission energy future with wind being generated at
near-zero marginal cost.
Texas’s claim to fame in the Second Industrial Revolution was its
identification as the largest oil-producing state in the United States and, at one
time, the world. We suggested that a bold shift to wind, accompanied by solar,
could reposition the state as the leading renewable energy power in America in
the rollout of a Third Industrial Revolution. It was during this internal
conversation that CPS learned that Toshiba, the Japanese company overseeing
the installation of the nuclear power plants, had just projected a cost overrun of
$4 billion over the originally agreed-upon price, taking the price tag to $12
billion.61
A crisis ensued, and when the dust settled, the city and CPS bailed out of the
nuclear deal with a substantial financial loss, swinging the door wide open to
wind power. It turned out to be a good business decision. The current levelized
minimum cost of energy (LCOE) per megawatt hour for building and operating a
nuclear power facility today is $112, while, as mentioned, the minimum
levelized cost for generating a megawatt of wind is $29, and utility-scale solar
comes in at $40 per megawatt hour.62 Still, apparently not every power and
electricity company has heeded the message. The only new nuclear power plant
under construction in the United States in the past 30 years is Georgia Power’s
Vogtle Electric Generating Plant. This nuclear power plant, originally contracted
at $4.4 billion, is now five years behind schedule and has ballooned to a $27
billion project—a whopping cost overrun by any standard.63 It’s difficult to
understand how some elected officials are still championing the construction of
new nuclear power plants across the country.
In the meantime, in the past eight years, CPS Energy has been beating a path
through Texas, making deals with ranchers to install wind farms across the
plains. Today, ranchers around the state are enjoying a second income, hosting
wind farms where the cattle roam.
Texas is currently the nation’s leading wind-generating state and has more
installed capacity than all but five countries in the world. Wind generated about
15 percent of the electricity in the state in 2017, putting it on par with the current
green energy generation in the European Union.64 On March 31, 2016, CPS
Energy reported that 45 percent of San Antonio’s “daily energy needs … were
met through wind energy generated from seven contracted farms.”65
The lesson here is that Texas accomplished most of this in less than ten
years, by taking a risk and sticking to their hunch that wind power would
rebrand the Lone Star State. Along with California, Texas has raised the bar and
demonstrated to the other forty-eight states that they can begin playing in the
same green arena, bringing America into a nearly 100 percent renewable energy
regime made up of solar and wind and accompanying energy efficiencies over
the course of the next two decades.
Anne Pramaggiore is another key American player leading the charge. For
many years Pramaggiore has been the president and CEO of Commonwealth
Edison, the giant electric utility serving Chicago, and she is now also CEO of
Exelon Utilities, which, with six businesses (including ComEd) under its
umbrella, is the country’s largest natural gas and electric distribution company.
In 2016, Pramaggiore delivered a keynote address at the Energy Thought
Summit in Austin, Texas. She mentioned that two years earlier, her company had
convened a group of power-sector stakeholders to brainstorm how to make the
electricity grid smarter. While many of the leading energy management
companies and consultancies contributed valuable suggestions and insights,
Pramaggiore felt that the effort lacked a unifying concept until she read The
Third Industrial Revolution.66 Pramaggiore studied our twenty years of
engagement in the European Union in introducing both the Renewable Energy
Internet infrastructure for generating and managing the green energies and the
new provider/user energy services business model that accompanies the
paradigm shift, and she thought about how the approach might be adapted to the
American electricity network.
In her presentation, Pramaggiore remarked, “It was kind of like having a
jigsaw puzzle where you have all the red pieces in one corner, all the blue pieces
in another corner and you can kind of see it coming together, but it’s not there.
Then all of a sudden we started reading platform economics and the pieces
started coming together. It made sense to us.”67 Pramaggiore is the first of a new
generation of American electric utility chiefs conversant in digital platform
capabilities brought to the production and distribution of renewable energies and
comfortable with the new disruptive business model that will need to be put in
place to move society into a zero-carbon future.
How disruptive will the transition be for the fossil fuel sector and
accompanying electricity sector with the onslaught of solar and wind energy into
the market? IRENA (the International Renewable Energy Agency) was
commissioned by the German government to do a report on the future
projections of fossil fuel production and consumption versus renewable energy
production and consumption in preparation for its presidency of the G20 Summit
in 2017. A part of that report ran scenarios on the potential cost of stranded
assets brought on by the accelerating transformation from a fossil-fuel-driven
civilization to a renewable-energy-powered society.
IRENA ran a two-timeline-scenario projection on the adoption of renewable
energies and the speed of energy efficiency deployment to assess how each
timeline will affect the magnitude of stranded assets across upstream energy
(energy at its source), power generation, and buildings and industry, the “three
large sectors that are responsible for approximately three-quarters of today’s
direct global energy-related carbon dioxide emissions.” In the first scenario,
called REMap, “accelerated” renewables and energy deployment from 2015 to
2050 “will deliver emission reductions that have a two out of three chance of
maintaining a global temperature change below 2 degrees Celsius above pre-
industrial levels.” The second case, called the “delayed policy action,” is a
business-as-usual scenario until 2030 and thereafter an accelerated deployment
of renewables “to ensure that the global energy system remains within the same
emission budget by 2050.”68
In the delayed policy action scenario for upstream energy, were business-as-
usual capital expenditures on fossil fuel energy to continue to 2030, the stranded
fossil fuel assets would total approximately $7 trillion, while under the
accelerated early transition REMap scenario, the stranded fossil fuel assets
would come in at $3 trillion in losses. The stranded assets would represent 45–85
percent of the assumed valuation of today’s oil upstream production.69
In power generation, under the delayed scenario, fossil-fuel-related assets
would total $1.9 trillion, while under the accelerated early transition REMap
model, stranded fossil fuel assets would be $0.9 trillion.70
The prospect of trillions of dollars in losses is a sober reminder that when it
comes to the rise and fall of great civilizations, past assets inevitably become
future liabilities, imposing a bill on generations not yet here. There are times in
history when new communication, energy, and mobility and logistics technology
revolutions are nowhere on the horizon, leading to the collapse of a civilization.
Fortunately, this time around, a powerful new green infrastructure revolution is
what’s pushing the old infrastructure aside, while creating the opportunity to live
more lightly and sustainably on Earth.
 3

ZERO-CARBON LIVING

Autonomous Electric Mobility, Nodal IoT Buildings, and Smart

Ecological Agriculture

It is worth reiterating that the automobile was the anchor of the Second
Industrial Revolution. Much of the world’s GDP over the course of the twentieth
century is traceable back to the production and sale of hundreds of millions of
internal combustion cars and millions of buses and trucks, and all of the
industries and sectors that fed into their production and sale, as well as all of the
industries and businesses that benefited from “the Auto Age” and the build-out
of new cities and suburbs, including the real estate industry, shopping malls, fast-
food chains, travel and tourism, theme parks and tech parks … the list is endless.

Near-Zero Marginal Cost Mobility

The transportation and logistics industry, which burns an enormous amount of

fossil fuels and is a major contributor to global warming emissions, is also
decoupling from the fossil fuel industry and moving over to the production of
electric and fuel-cell vehicles powered by solar and wind electricity from the
electric utilities. Eighteen countries, including Germany, China, India, France,
the Netherlands, and Ireland, have already announced their intentions to phase
out the sale and registration of new vehicles powered by fossil fuels in the next
few decades.1
Much of the oil used for transportation is going to remain in the ground as
auto companies transition to electric and fuel-cell vehicles. Bank of America
projects that electric vehicles will account for 40 percent of all car sales by 2030.
According to a study conducted by Fitch Ratings, one of the three major US
credit rating agencies, global electric vehicles could number as many as 1.3
billion by 2040. Taking this into consideration, Bank of America concludes that
“electric vehicles will likely start to erode this last major bastion of oil demand
growth in the early 2020s and cause global oil demand to peak by 2030.”2
Many of the lead cities in the world are already taking into account current
projections on the swift transition underway in the auto industry from internal
combustion vehicles powered by fossil fuels to electric vehicles powered by
green renewable electricity. In April 2019, Los Angeles mayor Eric Garcetti
made public a sweeping Green New Deal master plan that put the future of
transport at the center of the city’s shift into a zero-emission economy. Garcetti
announced that 25 percent of all vehicles in the city of Los Angeles will be
electric by 2025, and 80 percent by 2035.3 These projections are striking for a
city known for its car culture.
The oil giants are not unaware of what all of this means for their industry. In
July 2017, Royal Dutch Shell CEO Ben van Beurden said that global oil demand
could peak by the late 2020s as electric vehicles begin to replace en masse the
internal combustion engine of the twentieth century. In an interview on
Bloomberg TV, van Beurden added that he would join the ranks and buy an
electric car as his next vehicle purchase.4
Is Royal Dutch Shell’s CEO just being glib? Some of the other global oil
giants are still keeping a stiff upper lip. Helen Currie, the chief economist at
ConocoPhillips, says her company ran scenarios on projected electric car
demand and other factors that might affect the future prospects of the oil industry
and “struggled with finding a peak” for demand, at least “anytime within the
next 20 to 30 years.” She added that “we readily acknowledge it’s plausible, but
we really tend to see oil demand being fairly strong and robust.”5 Others
disagree.
Much depends on three factors revolutionizing the transportation sector: the
transition from gasoline-powered vehicles to electric and fuel-cell vehicles
powered by green energies; the shift to shared vehicle services; and the
introduction of self-driving vehicles. Each of these shifts is revolutionary and,
standing alone, would be enough to disrupt the transportation sector. Together,
feeding off each other, they portend a complete upheaval of mobility and
logistics around the world, leaving a trail of stranded assets, the magnitude of
which is difficult to fully comprehend.
The meshing of the Communication Internet and the Renewable Energy
Internet makes possible the build-out and scale-up of the autonomous Mobility
and Logistics Internet. The convergence of these three internets comprises the
kernel of the Internet of Things platform for managing, powering, and
transporting goods and services in a Third Industrial Revolution economy.
The autonomous Mobility and Logistics Internet is made up of four
foundational pillars, which, like the pillars of the Energy Internet, have to be
phased in simultaneously for the system to operate efficiently. First, charging
stations will need to be installed ubiquitously across land-masses, allowing
electric vehicles—cars, buses, and trucks—to power up or send back electricity
to the grid. Second, sensors will need to be embedded in devices across logistics
networks to allow factories, warehouses, distributors, retailers, and end users to
have up-to-the-moment data on logistical flows that affect their value chains.
Third, the storage and transit of all physical goods across supply chains will need
to be standardized—using smart, digitally enhanced containerization—so that
they can be efficiently passed off to any transport vehicle and sent along any
passageway, operating across the logistics system in the same way that
information flows effortlessly and efficiently across the World Wide Web.
Fourth, warehouse operators along the logistics corridors will need to aggregate
into cooperative networks to bring all of their assets into a shared logistical
space to optimize the shipment of goods, taking advantage of lateral economies
of scale. For example, thousands of warehouses and distribution centers might
establish blockchained cooperatives to share unused spaces, allowing a carrier to
drop off a shipment at any warehouse and pass it on to another carrier from
another company who might have more cargo going near the particular
destination. This will ensure that all the carriers are fully loaded in their trailers
at all times and that shipments are sent along the most efficient path en route to
their final destination.
The Internet of Things platform will provide real-time logistical data on
pickup and delivery schedules, weather conditions, and traffic flows, with up-to-
the-moment information on warehouse storage capacities. Automated
dispatching will use Big Data and analytics to create algorithms and applications
to ensure the optimization of efficiencies along the logistical routes and, by
doing so, increase productivity and reduce the carbon footprint while also
reducing the marginal cost of every shipment.
By 2028, at least some of the shipments on roads, railways, and water will be
carried out by driverless electric and fuel-cell transport, powered by zero-
emission and near-zero marginal cost renewable energies and operated by
sophisticated algorithms. Autonomous electric and fuel-cell transport will
accelerate aggregate efficiency and productivity and reduce the labor cost of
shipping goods toward near zero on a smart Mobility and Logistics Internet.
The technological transformation in mobility and logistics is already
changing the very nature of what it means to be a transportation company. In
2016, I joined Wolfgang Bernhard, then head of Daimler Trucks & Buses, in
Dusseldorf to help introduce Daimler’s new mobility and logistics business
model to journalists from around the world.6
After I took a few minutes to lay out the operating principles of the Mobility
and Logistics Internet, Bernhard announced to the assembled journalists that
Daimler was investing half a billion euros in its new Digital Solutions &
Services unit to provide state-of-the-art smart logistics services to companies to
help them better manage their logistics supply chains. At the time of the
announcement, Daimler had already equipped 365,000 of its commercial
vehicles with sensors, enabling the cabs to monitor and collect Big Data on
weather conditions and traffic patterns, as well as up-to-the-moment availability
of warehouse space. Bernhard observed that “for high-performance logistics,
real-time data are essential—and our trucks supply these data.… This will boost
our customers’ performance and help them to operate their businesses safer and
more environmentally friendly.”7
Bernhard then wowed the journalists in attendance by dimming the room
lights and connecting to a live video feed of a helicopter hovering over a German
expressway monitoring three Daimler long-haul trucks in transit. The video
zoomed into the trucks’ cabs, allowing Bernhard to talk to the drivers. He asked
all three drivers to take their hands off the steering wheel and feet off the gas
pedal. The trucks then went into autopilot mode and platooned together in a
trainlike formation, transforming the extended vehicles into a mobile Big Data
center, picking up relevant logistical data in real time across the expressway. The
drivers, in turn, settled into their dual role as logistics analysts, monitoring their
sensor feeds and feeding Big Data across the web to their logistics partners. A
year later, Daimler invited its top engineers to Berlin, where we further refined
the engineering model for the mobility and logistics business.
Ford Motor Company is also introducing a mobility and logistics business,
with the launch of Ford Smart Mobility. Ford is partnering with lighthouse cities,
working alongside city planners and civic organizations to develop new ways to
move people and goods beyond the private car. The goal is to work with a full
range of transportation partners to develop seamless mobility services that can
partner Ford’s autonomous self-driving electric vehicles with public
transportation, bike-sharing and scooter-sharing services, and pedestrian
walkways to ferry passengers and goods effortlessly, passing them off between
the various modes of transportation to final destinations, with the objective of
reducing congestion and carbon emissions.8
I joined Mark Fields, then CEO of Ford, in January 2017 on the opening day
of the North American Auto Show in Detroit to introduce the new business
model. Ford went on to sponsor the premiere of the film that our office
coproduced with Vice Media, The Third Industrial Revolution: A Radical New
Sharing Economy, at the Tribeca Film Festival and sponsored subsequent
premieres of the film in Miami, San Francisco, and Los Angeles.
The erection of the autonomous Mobility and Logistics Internet transforms
the very way we view passenger mobility. Today’s youth are using mobile
communication technology and GPS guidance on an incipient Mobility and
Logistics Internet to connect with willing drivers in car-sharing services. Young
people, at least in urban areas, prefer “access to mobility” over “ownership of
vehicles.” Future generations will likely never own vehicles again in a smart
automated mobility era. For every vehicle shared, however, five to fifteen
vehicles are eliminated from production.9 Larry Burns, the former corporate vice
president of research, development, and planning at General Motors, studied
mobility patterns in Ann Arbor, Michigan, a midsized American city, and found
that car-sharing services could eliminate 80 percent of the vehicles currently on
the road while providing the same, or better, mobility at a lesser cost.10
There are currently 1.2 billion cars, buses, and trucks crawling along in
traffic in dense urban areas around the world.11 The mass production of gasoline-
powered internal combustion vehicles has devoured large swaths of the Earth’s
natural resources over the course of the past hundred years. Burns’ study
suggests that 80 percent of the vehicles currently on the road are likely to be
eliminated with widespread adoption of car-sharing services over the course of
the next generation.12 The remaining 240 million vehicles will be electric and
fuel-cell, powered by near-zero marginal cost renewable energy. Those shared
vehicles, in turn, will be driverless and running on automated smart road
systems.
The long-term transition from ownership of cars to access to mobility in
driverless vehicles on smart road systems will alter the business model for the
transportation industry. While the big auto manufacturers around the world will
produce fewer vehicles over the course of the next thirty years, they will
reposition themselves as aggregators of the global automated Mobility and
Logistics Internet, managing mobility services.
Let’s go back to Royal Dutch Shell CEO Ben van Beurden’s provocative
prediction that oil consumption could peak in the late 2020s as electric vehicles
begin to replace the internal combustion engines of the twentieth century. What
are the other major players in the global energy sector and transportation sector
saying?
A 2018 report conducted by the Stockholm Environment Institute that
projected stranded asset risks in the European transport sector is evocative of
what is going to occur in America and around the world, and is worth paying
attention to. The study cuts right to the chase, estimating that the European
automotive sector alone is at risk of €243 billion ($277 billion) in stranded assets
as the transportation revolution unfolds on the continent. It should be noted that
the total enterprise value of the European auto industry as of 2017 was €604
billion ($689 billion).13
A part of the reason for the steep incline in sales of electric vehicles is the
rapidly declining price of lithium batteries, which cost $1,000/kWh (kilowatt-
hour) in 2010 but by the end of 2017 were only $209/kWh, a 79 percent plunge
in price in just seven years. The average energy density of electric vehicle
batteries is also improving, at a rate of 5 to 7 percent each year.14
Governments are establishing more strict fuel economy standards for
automobiles, which will force a sizable electrification of the automobile fleet,
while simultaneously extending generous incentives for the purchase of electric
vehicles. China used this carrot-and-stick approach successfully, securing 21
percent of all global sales of electric vehicles in 2017 from just six Chinese
cities. Here again, Europe is going toe-to-toe with China. Daimler, Volkswagen,
and Volvo have all announced ambitious deployment plans to electrify their
fleets over the next ten years, accompanied by similar carrots and sticks offered
up by the EU member states.15
As of 2018, electric vehicle sales represent only 2 percent of global vehicle
sales. However, BNEF projects that worldwide sales of electric vehicles will
leap from a paltry 1.1 million in 2017 to an impressive 30 million by 2030, as
their price tag dips below the cost of manufacturing internal combustion
vehicles. China is running ahead of the game and is projected to account for 50
percent of all global electric vehicle sales by 2025, and 39 percent by 2030, as
other countries ratchet up their electric vehicle fleets.16
According to BNEF, the “tipping point” where the “unsubsidized cost” of
electric vehicles becomes competitive with the cost of internal combustion
vehicles is 2024. By 2025, the report projects electric vehicles will constitute 19
percent of all passenger vehicle sales in China, 14 percent in the EU, and 11
percent in the United States. This is the year when the rubber literally hits the
road. The number of internal combustion vehicles sold per year (gasoline or
diesel) begins to decline in the mid-2020s (following a similar disruption path
experienced by the European electricity sector between 2010 and 2015),
signaling the beginning of the endgame for the internal combustion engine and
the dawn of electric vehicles powered by green electricity.17 By 2028, BNEF
predicts that electric vehicle sales will account for 20 percent of all global
vehicle sales.18 At this juncture, we will likely see the beginning of the collapse
of the fossil fuel civilization. It should be noted that 96 million barrels of oil are
consumed around the world each day, and transport accounts for approximately
62.5 percent of all the oil used.19 The numbers speak for themselves.
While the shift to green-powered electric vehicles is a transformational event
that, by itself, will rock the global economy in the biggest disruption since the
advent of the gasoline-powered automobile, the accompanying shift to driverless
autonomous vehicles in car-sharing services will have a comparable impact on
changing the way we organize mobility and logistics in society.
The speed of the transformation has caught the industry and society off
guard. A 2017 study by RethinkX, a leading transportation research forecaster,
reports that today’s car-sharing services will quickly transition into shared
passenger services and electric vehicle fleets in the 2020s.20 The increased
efficiencies in vehicle utilization will be considerable. For example, consider
Europe, where privately owned cars, on average, are only driven 5 percent of the
time, and even then only 1.5 out of the 5 seats are occupied. The study projects
that shared mobility in autonomous electric vehicles will increase vehicle
utilization by ten times, extending a vehicle’s lifetime by 500,000 miles, and
potentially 1 million miles by 2030. The bottom line, according to the findings
of the study, is that mobility as a service will make available a much lower cost
of transportation than existing alternatives and be “four to ten times cheaper per
mile than buying a new car and two to four times cheaper than operating an
existing vehicle by 2021.”21
A more surprising finding is that provider/user transportation in autonomous
vehicles, operating with near-zero marginal cost human labor and powered by
near-zero marginal cost solar and wind electricity, plunges the cost of providing
mobility while simultaneously allowing the provider to commodify the time
passengers spend in the vehicle by offering various types of entertainment and
commercial purchases via the internet, similar to the offerings from airlines in
long-distance air travel. “Other revenue sources from advertising, data
monetization, entertainment and product sales will open a road to free transport,”
RethinkX concludes.22
Because each vehicle will be used on average ten times more than
individually owned vehicles, fewer will be needed on the road, and less time will
be lost in gridlocked traffic. In the United States alone, traffic congestion cost
the economy $305 billion in 2017.23
The study also found that by 2030, individually owned human-driven,
internal combustion engine vehicles will account for only 40 percent of the
vehicles on the road and will represent only 5 percent of all the passenger miles
driven. Not surprisingly, these exceptional efficiency gains will raise the annual
income for US households by as much as $1 trillion by 2030. According to the
report’s authors, “productivity gains as a result of reclaimed driving hours will
boost GDP by an additional $1 trillion.”24
By 2030, 70 percent fewer passenger cars and trucks will be manufactured,
disrupting the entire transportation and logistics sector and stranding assets on a
scale never before seen in the industry. On the other hand, the study says that
“the average American family will save more than $5,600 per year in
transportation costs, equivalent to a wage raise of 10 percent.” That’s $1 trillion
of additional money available to American households.25
Whether all the projections of the RethinkX report will materialize in the
time frame projected may be open to question. What is sure is that the Great
Disruption in the conception and deployment of mobility will have profound
consequences for the transportation sector, the energy sector, and society.
Now, double back to Bank of America’s claim that increased penetration of
electric vehicles into the market “will likely start to erode this last major bastion
of oil demand growth in the early 2020s and cause global oil demand to peak by
2030” and Royal Dutch Shell CEO Ben van Beurden’s similar claim that global
peak oil demand will come by the late 2020s.26 Are they right? Do the other
giant oil companies agree, or are they still bullish on a more extended future for
their industry before stranded assets become a reality?
We may already have an answer. Bernstein Research, one of the energy
industry’s most respected market forecasters, warned in a research note in July
2018 that the global economy could experience an oil-price shock of $150 per
barrel, topping even the $147 per barrel all-time high in July 2008 that, along
with the subprime mortgage crisis, took the global economy into the Great
Recession. According to CNBC, Bernstein Research says that reinvestments in
oil reserves are currently the lowest in over twenty years and the amount of those
reserves is likely to last only for another ten years or so.27 If ten more years of
reserves sounds familiar, that’s just about the time other studies project that
global demand for oil will peak and begin a decline. A coincidence? Unlikely.
Bernstein Research acknowledges that the oil giants are aware of the
meteoric rise of renewable energy and electric vehicle adoption and are privy to
all the studies suggesting that global oil demand is going to peak sometime in the
near future. Some companies are possibly pulling back on replenishing oil
reserves beyond ten years for fear of devastating losses brought on by the
exploration and capture of oil that will never be used—to wit, stranded assets.
With investors already clamoring for the oil companies to return cash to
shareholders rather than spend it on replenishing oil that may never be burned,
the likelihood, says Bernstein Research, is that “any shortfall in supply will
result in a super-spike in prices potentially much larger than the US$150/bbl
spike witnessed in 2008.”28

Nodal IoT Buildings

While the ICT/communication sector, the electricity sector, and the mobility and
logistics sector are in the process of decoupling from the fossil fuel industry, so
too is the real estate sector, which also consumes a huge amount of energy and is
a primary contributor to global warming emissions.
Cities, regions, and nation-states are mandating and incentivizing the
retrofitting of existing buildings to reduce the amount of energy used and are
enacting legislation to require that all new residential, commercial, and industrial
buildings be zero emission or positive power using solar, wind, geothermal, and
other renewable energies. California has established an aggressive agenda to
decarbonize its building stock. In September 2018, Governor Jerry Brown signed
a bill into law that prepares the ground for reducing greenhouse gas emissions
from California’s existing residential and commercial buildings by 40 percent
below 1990 levels by 2030.29 The California Public Utilities Commission is also
preparing initiatives that will ensure that all new residential buildings be zero net
energy by 2020 and all commercial buildings be zero net energy by 2030.30
The global real estate market in 2015 was valued at $217 trillion, nearly 2.7
times the GDP of the world, and represents 60 percent of the investment assets
of the global economy.31 Looking ahead, the construction market will grow by
another $8 trillion by 2030.32
As alluded to earlier, the paradigm shifts in communication, energy, and
mobility change the nature of the built environment. The First Industrial
Revolution gave rise to dense urban built environments because of hub-to-hub
railroad transportation, while the Second Industrial Revolution birthed widely
spread out suburban environments off interstate highway exits. In the Third
Industrial Revolution, existing and new buildings—residential, commercial,
industrial, and institutional—are transformed into zero-carbon energy-efficient
smart nodes and networks embedded in an Internet of Things matrix. Every
building node connected to the IoT infrastructure acts as a distributed edge data
center, green micro power-generating plant, energy storage site, and transport
and logistics hub to manage, power, and move economic activity in a smart
green America.
Buildings are no longer passive, walled-off private spaces but, rather,
actively engaged entities sharing their renewable energies, energy efficiencies,
energy storage, electric mobility, and a wide range of other economic activity
with one another at the discretion of their occupants. But, the laying on of all the
digital infrastructure depends first and foremost on decarbonizing every
building.
A vast number of existing US buildings will have to undergo a complete
retrofit to seal interiors, minimize energy loss, optimize efficiency, and buttress
structures to be resilient to climate-related disruptions. Gas and oil heating,
which is a big source of global warming emissions in buildings, will need to be
replaced by electrical heating across the residential, commercial, industrial, and
institutional building stock. The return on a building’s retrofit investment in
energy efficiency and energy savings takes place over relatively few years, after
which the owner or renter enjoys a reliable stream of savings on energy costs for
decades.
Transforming the building stock also means millions of jobs. Each $1 million
of spending on the manufacture and installation of building improvements
generates 16.3 jobs when adding together direct employment, indirect
employment, and induced employment.33 Germany’s experience provides a
metric for the job-creating potential in America as it embarks on a nationwide
retrofitting project. The German Alliance for Work and the Environment is
credited with the most ambitious project—retrofitting 342,000 apartments and,
in the process, creating 25,000 new jobs and saving 116,000 existing ones; that’s
more than 140,000 new or saved jobs.34 Even though German employment
figures might vary somewhat from America’s, they can be used to project the
potential employment opportunities in the mass retrofitting of US dwellings.
Only after sealing the building envelope to make it more energy efficient can
the smart IoT infrastructure be embedded, transforming the building into a smart
node, ready to engage its neighbors locally and globally in collective endeavors.
Early on, the Internet of Things was viewed more as an ancillary aid to
industries to help them increase their surveillance of equipment and improve
performance across assembly lines and supply chains—for example, embedding
sensors in airplanes that could alert a company when a component needed to be
replaced before standard maintenance checkups.
While the term “Internet of Things” was coined by Kevin Ashton back in
1999, the prospects for its widespread application remained unexplored for
another thirteen years because of the high cost of sensors and actuators. Then, in
an eighteen-month period in 2012 and 2013, the cost of radiofrequency
identification chips used to monitor and track things plummeted by 40 percent,
opening up the possibility of embedding sensors across the whole of society.35
A year later, in 2014, our office published The Zero Marginal Cost Society,
suggesting that the IoT has a far more important role to play by becoming a
smart nervous system to improve commercial and social life.36 We argued that
the IoT’s ultimate application would be to embed it within and across the
residential, commercial, industrial, and institutional building stock. By doing so,
all our habitats would be transformed into smart building nodes that could
connect with each other on a multitude of platforms to create a distributed global
brain and nervous system, bringing the human family together in ever more
diverse and fluid socioeconomic networks.
Silicon Valley entrepreneurs and global consulting companies picked up on
the notion of “nodal buildings.” Yet it was a Chinese company that quickly
applied the theory in practice. Zhang Ruimin is the chairman of the board and
CEO of the Haier Group. Much of the public outside China might not be familiar
with the company, although their homes, offices, commercial spaces, and tech
parks are likely to be outfitted with the company’s smart technology. Haier is the
world’s leading appliance manufacturer and owns various appliance brands
around the world, including General Electric appliances in the American market.
I had the pleasure of visiting with Zhang Ruimin in September 2015 on the
occasion of the tenth anniversary of the company’s launch of its global business
plan.37 After Zhang read The Zero Marginal Cost Society, he began to reenvision
buildings as smart distributed nodes that could aggregate in social platforms to
enrich family life and commerce.38 Haier is now the leader in smart IoT
technology embedded in appliances, which are used in buildings around the
world.
Zhang Ruimin told me that the goal of his business model is to provide
homes, businesses, and communities with IoT technology that reduces the
electricity used and the carbon footprint.
IoT infrastructure in every building, while still nascent, is expected to grow
exponentially in the next few years as the United States transforms its building
stock into smart digital nodes interconnected in smart networks. Each $1 million
of spending on Internet of Things technologies leads to thirteen direct, indirect,
and induced jobs.39
The real estate sector, by any account, is the most vulnerable to becoming the
biggest stranded asset in the world in the coming decades. Unlike the
provisioning of energy generation for electricity, the residential, commercial,
industrial, and institutional building stock is locked in, with only 2 percent of
total property holdings turning over each year, making it the least agile global
asset.40 To gain a proper perspective on how difficult it will be to transform the
building stock to near-zero emissions, bear in mind that in the UK, 87 percent of
the current building stock will still be standing in 2050.41
Our experience in the European Union is that getting up to scale in across-
the-board retrofits of the building stock is among the most challenging aspects in
implementing a Green New Deal and requires a steadfast resolve to overcome
the sociological and psychological intransigence that comes with not wanting to
disrupt daily patterns of living and working. The resistance is often overcome,
especially in low- and middle-income social and public housing, when occupants
realize that their monthly utility bills—generally the biggest housing expense
after rent—will plummet, giving them more discretionary income.
Building retrofits are absolutely necessary to decarbonizing the American
and global economy and will need to be vigilantly attended to in the Green New
Deal transition. If we don’t aggressively get on with this task, the projected
stranded asset losses in the worldwide building sector are going to be staggering.
Under the IRENA delayed case, stranded assets in the global building stock
would ring up at a mind-blowing $10.8 trillion, double the amount that would
occur in the early accelerated-transition REMap scenario.42
The US Conference of Mayors, at their annual conference in Boston in 2018,
passed a tough resolution calling on American cities to “focus attention on the
energy efficiency of America’s existing and newly constructed residential, multi-
family, commercial, and governmental buildings.”43 First-mover cities are
beginning to heed the call, enacting more strict mandatory requirements and
incentives and penalties to accelerate the retrofits of the building stock across
their governing jurisdictions in the hope of beating the climate change clock and
keeping emissions locked down at 1.5°C or less.
The European Union has established a protocol that our US Conference of
Mayors might want to adopt, called the Energy Performance of Buildings
Directive; it provides a mechanism for monitoring, incentivizing, and penalizing
all the parties that need to be engaged in retrofitting the building stock, installing
renewable energy on-site, and creating a smart energy infrastructure with
adequate energy storage. This law mandates that every building across the
twenty-eight member states hold an Energy Performance Certificate and be
responsible for monitoring its own heating and air conditioning. Two members
of the faculty of the Department of Architecture and Built Environment at
Northumbria University, Kevin Muldoon-Smith, lecturer, and Paul Greenhalgh,
associate professor, explain the importance of this act:

Energy Performance Certificates (EPCs) have a significant

relationship with climate-related stranded assets in real estate. They
are a key enabler of building improvements, as they influence
decision-making in real estate transactions and provide cost-
optimal recommendations for energy performance improvement.…
They provide the opportunity for governments to enforce minimum
energy performance standards, and they are an important
information tool for building owners, occupiers, and real estate
stakeholders.44

The governments of England and Wales have used the EPCs to create an
enforceable report card, called Minimum Energy Efficiency Standards (MEES),
for nonresidential privately rented property. If a property’s MEES score is below
E (meaning it has a score of F or G), it would be illegal to rent out. A similar rule
is used for residential property. Around 10 percent of residential property, worth
£570 billion, and 18 percent of the commercial stock, worth £157 billion, are
below the threshold. Both governments are looking at elevating the minimum
threshold over time to incentivize physical improvements within buildings.45
There are many additional and valuable benefits in issuing minimum energy
efficiency standards reports: for example, publicly naming and shaming owners
of substandard buildings, not to mention depreciating the value of the property
on the market. Continually updated energy performance certificates issued for
every building across a city, state, or nation also provide the data set that could
be used to determine the value of the property for purposes of assessing property
taxes, with more energy efficient properties and properties generating solar
electricity receiving tax deductions and less energy efficient properties receiving
tax hikes.
Unfortunately, the financing mechanism that accompanies MEES—called,
interestingly enough, the “Green Deal Finance Model,” which would incentivize
the owners of dilapidated residential property to make the efficiency changes—
was taken away by the government and never even introduced for commercial
property, leaving owners with a penalty but without an incentive to upgrade their
properties.46 Again, the lesson learned over and over is that transitioning the built
environment away from the fossil fuel culture and toward a green renewable
energy culture, by necessity, must provide equally powerful carrots and sticks to
ensure success.

Preparing the American Workforce for the Green Era

The decoupling of the communication sector, the electricity sector, the mobility
and logistics sector, and the building stock sector from the fossil fuel civilization
has barely begun in the United States. Yet the shift in the makeup of the labor
force brought on by the transition to a Third Industrial Revolution economy is
already showing up in the rise in employment across the four industries that
make up the nervous system of the new green economy. The statistics are
impressive. According to the 2017 US Energy and Employment Report compiled
by the US Department of Energy, close to 1 million Americans work in the
energy efficiency, solar, wind, and electric vehicles sector, which is nearly five
times the employment in the fossil fuel electric industry.47 If part-time workers in
the construction industry engaged in retrofitting buildings are included, the
number climbs to 3 million Americans “working in part or in whole for the
energy efficiency, solar, and wind sectors.”48 These employment numbers are
going to grow exponentially as the nation turns its attention to a Green New Deal
to transition into a zero-emission Third Industrial Revolution economy over the
next two decades.
Preparing a nationwide workforce for the various competencies that will be
needed to transform the entire infrastructure of the country into a smart green
paradigm will require massive training and/or retraining, on the scale of what the
United States did at the beginning of World War II, when the country’s male
workforce was suddenly deployed to the war effort and women were called forth
to manage American industries on the home front. This seemingly impossible
task was accomplished in less than eighteen months across every industry. Of
late, there has been growing discussion around a similar mobilization and
training of high school and college graduates in the form of apprenticeships in
communities and industries cued to the build-out and scale-up of the green
infrastructure.
According to a Brookings Institution study, there are currently 14.5 million
infrastructure workers across the fifty states. They are mostly male, which does
not reflect the racial or gender diversity of the population at large. Fewer than 20
percent of the workers in the green energy and energy efficiency fields are
women, and people of color make up less than 10 percent of the workforce.49
Brookings notes that “the transition to the clean energy economy will
primarily involve 320 unique occupations spread across three major industrial
sectors: clean energy production, energy efficiency, and environmental
management.” Most of these jobs will require some level of both vocational and
professional training in design, engineering, and mechanical knowledge.
Interestingly, hourly wages in the new green jobs exceed the national average by
8 to 19 percent; equally important, workers at the lower end of the income ladder
can make $5 to $10 more per hour than in comparable jobs in the old economy.50
The problem is that much of the existing infrastructure workforce is nearing
retirement, posing the question of how to prepare a new generation with the
skills necessary to transition America into a postcarbon green era. State,
municipal, and county governments are just now beginning to establish
infrastructure academies whose purpose is both to retrain the existing workforce
and to prepare a younger generation for the new infrastructure jobs that
accompany the shift into a Third Industrial Revolution economy. For example, in
2018, Washington, DC, mayor Muriel Bowser established the DC Infrastructure
Academy, a joint initiative between the city and public-private partners,
including Washington Gas, DC Water, and Pepco, the electric utility, to train
workers living in the city’s most disadvantaged neighborhoods for the new green
employment opportunities.51
The Green New Deal has opened up a conversation across the country about
establishing green apprenticeships in the form of state and national service
programs—a Green Corps, a Conservation Corps, a Climate Corps, an
Infrastructure Corps—that will provide a living wage and professional
certification upon completion of service and allow a younger generation of
Americans to advance careers in an increasingly green economy. There is ample
precedent for these initiatives. The Peace Corps, VISTA, and AmeriCorps have
proved invaluable in encouraging public service and providing opportunities for
young people to learn new skills, which have helped them find career paths and
employment. Unions, local governments, universities, community colleges, and
trade schools will play an important role in partnering with the various service
corps in preparing the new green workforce of the twenty-first century.

Smart Ecological Agriculture

Although the four key sectors that make up a society’s critical infrastructure are
the juggernaut for managing, powering, and moving economic activity, social
life, and governance, and together carry a hefty carbon footprint, we would be
remiss in leaving the agricultural sector out, because it is a key consumer of
energy and brings with it a big carbon footprint.
The cultivation, irrigation, harvesting, storing, processing, packaging, and
shipping of food to wholesalers and retailers uses a huge amount of energy.
Petrochemical fertilizers and pesticides account for a significant portion of the
energy bill. Operating farm machinery is also a major energy expenditure. In the
European Union, the cultivation of crops and animal rearing use the most energy
in the food value chain, making up one-third of the energy bill. Industrial
processing adds another 28 percent of total energy use. Packaging and logistics
comprise 22 percent of the total energy expended. Final disposal of food waste
represents about 5 percent of total energy use.52 The statistics for American
farms are likely comparable.
Let’s go back to animal rearing for a moment. People would likely be
shocked to learn that cattle are responsible for much of human-induced
agricultural greenhouse gas emissions, according to the United Nations Food and
Agricultural Organization.53 Livestock, primarily cattle, graze on 26 percent of
our planet’s ice-free land.54 There are approximately 1.4 billion cows currently
on Earth, and they are a major emitter of methane, a greenhouse gas that has 25
times the global warming potential of carbon dioxide (CO2).55 Cows also emit
nitrous oxide in their feces. Nitrous oxide has 296 times more global warming
potential than CO2.56
 But that’s just the beginning of the story. In the United States, more than half
of crop production by mass is used for animal feed, according to a study by the
Institute on the Environment.57 When compared to the production of common
plant-based protein sources, “beef and other ruminants … require more than 20
times more land and generate more than 20 times more greenhouse gas
emissions than pulses [i.e., legumes] per unit of protein consumed,” making
intensive cattle production and related animal husbandry incredibly inefficient.58
And then there is the sad fact that the major cause of deforestation in many
countries around the world is to provide grassland for grazing cattle, which
means far fewer trees to absorb global warming emissions.
Still, it is encouraging that the millennial and Gen Z generations are now
becoming aware of the beef issue and beginning to transition their dietary regime
toward a more vegetarian or even vegan diet, and fast-food chains are beginning
to introduce vegetarian alternatives. In April 2019, Burger King announced that
it would be selling plant-based patties at all 7,300 of its locations nationwide by
the end of the year.59
Unfortunately, the agriculture and food sector around the world has lagged
woefully behind other commercial sectors in decoupling from fossil fuels. In
Europe, for example, only 7 percent of total energy used in agriculture comes
from renewable energy sources, in sharp distinction to 15 percent in the overall
energy mix.60 Weaning the food sector off fossil fuels and petrochemical-based
farming in Europe, America, and the world is a demanding task.
The food sector is, however, beginning to turn its attention to the challenge.
Replacing petrochemical farming practices and especially the use of
petrochemical fertilizers and pesticides with organic ecological-based farming
practices is spreading across Europe, while the United States is still trailing.
Currently, 6.7 percent of the farmland in the twenty-eight member states of the
EU has been given over to organic farming, while only 0.6 percent of
agricultural land in the United States is being used to produce organic crops.61
However, the retail sales of organic food are increasing, amounting to $45.2
billion in the United States in 2017.62 Consumer demand is pushing the
transformation. A growing number of Americans are willing to pay higher prices
for organic and sustainable foods. As the market for organic food grows, more
farmers will transition into ecological agricultural practices, bringing the price of
organic food down at the retail level.
Farmers are also joining together in the creation of electricity cooperatives
and beginning to install solar, wind, and biogas energy technologies.63 Some of
the green electricity is being used on the farm, and the rest is being sold back to
the Energy Internet, creating a second source of income.
Farmers might also enjoy a third source of income by “carbon farming.”
Cover crops, crop rotation, and no-till farming are all simple, long-proven ways
to keep carbon sequestered in the soil. For example, a simple planting of cover
crops—rye, beans, oats—between rows of vegetables helps hold carbon,
nitrogen, and other organic nutrients in the soil. Carbon farming provides a
double benefit. It absorbs CO2 from the atmosphere and stores it in the soil,
where it aids in the growth of plants and increases yields.64
If the US Department of Agriculture were to reorder just a small amount of
its massive aid to American agriculture, which currently totals $867 billion, and
provide incentives to encourage farmers to use carbon farming across their
fields, it would have a demonstrable impact on carbon capture and storage,
addressing climate change while farmers profit from increased yields.65 Farmers
might also be compensated with federal and state tax credits for reforesting part
of their land and creating additional carbon sinks to capture and sequester CO2
emissions.
While the erection of solar and wind installations for generating green
electricity on farms and carbon farming for sequestering CO2 will be important
contributions to greening society, a far bigger opportunity exists to expand both
efforts on the nation’s federally owned land. One-third of the entire landmass,
and all of the off-shore land, remains in the federal government’s hands.66 In
recent years an increasing percentage of that land has been leased to the fossil
fuel industry to extract coal, oil, and gas reserves. Astonishingly, global
greenhouse gas emissions from fossil fuels extraction on federal public lands
accounted for 23.7 percent of all CO2 emissions in the United States from 2005
to 2014.67 At present, a meager 5 percent of the country’s renewable energy is
generated on public land.68 The Green New Deal should reverse the priority. The
leasing of federal public lands for extracting fossil fuels should be eliminated. At
the same time, the opening up of public lands to solar and wind generation on a
much larger scale should be encouraged to secure the green energy to power
America in the twenty-first century.
Moreover, America’s public lands—its forests, grassland, and shrubland—
currently sequester only around 15 percent of the CO2 emissions from fossil fuel
extraction on the same public lands.69 By eliminating fossil fuel extraction
entirely and reforesting, where applicable, public lands will become America’s
lungs for absorbing industrial CO2 emissions during the transition years into the
green era.
The shift from mechanical to digital operations on farms is also beginning to
change the way food is grown, harvested, stored, and shipped. The phase-in of
the Internet of Things infrastructure promises huge gains in aggregate efficiency
and productivity for American farmers, food processors, wholesalers, and
distributors. Farmers are already utilizing the emerging IoT by placing sensors
across their agricultural fields to monitor weather conditions, changes in soil
moisture, the spread of pollen, and other factors that affect yields. Automated
response mechanisms are also being installed to ensure proper growing
conditions.
As the IoT infrastructure is phased in with the implantation of sensors across
supply chains to track every moment of the ag journey from the planting of crops
to the final destination at retail stores, farmers, processors, wholesalers, and
distributors in the United States will be able to mine the Big Data flowing across
their value chains and, in doing so, increase their aggregate efficiency and
reduce their marginal cost and ecological footprint in the managing and
powering of farms and in the processing and transporting of food, taking the
food industry out of the chemical era and into an ecological era mediated by new
smart digital interconnectivity.

The Age of Resilience

The way we communicate, harness the Earth’s energy, move around, shelter
ourselves, and eat are so basic to the organization of economic and social life
that we often take them for granted until a fundamental disruption in the way we
think of them and use them forces a revolution in our social orientation and the
way we perceive the world around us. The transformation in the way we live our
lives in a digitally enhanced ecological society is already proving to be very
different than our forebears’ way of life in a mechanized fossil fuel civilization.
In this sense, the Green New Deal infrastructure is as much about a change of
consciousness as it is about a change in infrastructure.
Writing at the onset of the fossil fuel era, a French aristocrat, the Marquis de
Condorcet, captured the essence of the new consciousness at the height of the
French Revolution with a passage full of hope that has metamorphosed into a
haunting reminder of where we’ve come from over the past two centuries. He
opined:
 No bounds have been fixed to the improvement of the human
faculties.… The perfectibility of Man is absolutely indefinite.…
The progress of this perfectibility, henceforth above the control of
every power that would impede it, has no other limit than the
duration of the globe upon which nature has placed us.70

Condorcet’s vision became the philosophical frame of what has become

known as the Age of Progress. We now know better, surrounded by the carnage
wrought by the fossil fuel civilization. Spirited odes to the Age of Progress and
the “perfectibility of Man” are seldom heard, and even then in muted tones. The
Age of Resilience is upon us. The Green New Deal infrastructure is designed for
this reality. Its components, applications, and operations will enable us to adapt
to a once pacified and domesticated nature that is now rewilding—and hopefully
to survive the escalating climate events that now envelop the Earth.
That’s why a prospective Green Corps, Climate Corps, Infrastructure Corps,
and Conservation Corps, made up of millions of young Americans, is more than
just a career ladder to new business opportunities and employment. These
proposed agencies, at the federal, state, and local levels, will be among the first
responders to climate events and in the disaster relief and recovery missions that
will increasingly be a constant reality rather than a rare anomaly. Every
community will need to be continually vigilant and engaged in disaster mode if
we are to successfully adapt to the rewilding future that is now here. In this new
world, national security is more about climate catastrophes than about military
threats. Already, the Pentagon and state National Guards are reformulating their
core missions and increasingly prioritizing critical operations around
deployments to address climate events. The new reality is that every community
is vulnerable to a radically changing climate. Nobody escapes from the planet’s
wrath. The Green New Deal’s smart Third Industrial Revolution infrastructure is
our first line of defense in adapting to climate change. In a sense, it’s our lifeline
to the future.
 4

THE TIPPING POINT

The Collapse of the Fossil Fuel Civilization, Circa 2028

The decoupling from fossil fuels by the four primary sectors responsible for
much of the global warming emissions and their realignment with the emerging
renewable energies of a Green New Deal is quickly edging society to the
collapse of the fossil fuel civilization. In June 2018, Nature Climate Change
published a detailed and extensive study conducted by scientists from the
Cambridge Centre for Environment, Energy and Natural Resource Governance
at the University of Cambridge, which concluded that the question of the carbon
bubble was no longer tied to governments’ emission targets but rather to an
ongoing technological revolution, which “remains robust even if major fossil-
fuel producers [e.g., the US] refrain from adopting climate mitigation policies.”1
“Our conclusions,” say the authors of the report, “support the existence of a
carbon bubble, which, if not deflated early, could lead to a discounted global
wealth loss of between $1–4tn, a loss comparable to the 2007 financial crisis,”
but “further economic damage from a potential bubble burst could be avoided by
decarbonizing early.” The authors go on to say:

Irrespective of whether new climate policies are adopted or not,

global demand growth for fossil fuels is already slowing down in
the current technological transition. The question then is whether
under the current pace of low-carbon technology diffusion, fossil-
fuel assets are bound to become stranded due to the trajectories in
renewable energy deployment, transport fuel efficiency and
transport electrification. Indeed, the technological transition
currently underway has major implications for the value of fossil
 fuels, due to investment and policy decisions made in the past.
Faced with SFFA [stranded fossil fuel assets] of potentially
massive proportions, the financial sector’s response to the low-
carbon transition will largely determine whether the carbon bubble
burst will prompt a 2008-like crisis.

The authors of the report suggest that the competitive advantage of solar and
wind energy prices could force a weakened oil industry to drop the price of oil
on world markets—despite the losses—in order to extract the maximum amount
of remaining oil from under the ground and the sea and minimize remaining
stranded assets. To quote from the report, “Low fossil-fuel prices may reflect the
intention of producer countries to ‘sell-out’ their assets, i.e. to maintain or
increase their level of production despite declining demand for fossil-fuel
assets.” If this scenario were to happen, it would mean a potentially catastrophic
increase in global warming emissions, taking the world far beyond the 1.5°C
threshold.

20-20-20 in 2020

Let’s back up and revisit the series of events that began with governments
mandating targets for the reduction in global warming emissions and the
subsequent rapid technological innovations that led to a dramatic plunge in the
cost of renewable energies.
As briefly mentioned in chapter 2, by 2007 a consensus was emerging, both
at the European Commission and within the European Parliament, that weaning
the EU off a fossil fuel culture would necessitate legally binding targets across
three interrelated domains that all member states would need to accept and
adopt: a dramatic increase in energy efficiency; a historic shift to renewable
energies; and a huge reduction in global warming emissions. Each of these
mandated targets would feed off the other, helping the EU take its first step
toward the ultimate goal of a complete transformation into a postcarbon
economy by 2050.
The eureka moment came in November 2005 with the election of Angela
Merkel as chancellor of Germany. What was most notable about the election is
that it led to a grand coalition government between Merkel’s Christian
Democratic Union (CDU) party and the Social Democratic Party (SPD) and the
elevation of Frank-Walter Steinmeier to foreign minister and Sigmar Gabriel to
minister of the environment, nature conservation, and nuclear safety.
Germany was already the undisputed world leader in addressing climate
change and anxious to transform its economy from fossil fuels to green energies.
Both political parties had been nudged to take a more aggressive stance on
climate change by the fledgling Green Party that had emerged in the 1980s and
had become a major player in German politics. The Green Party narrative
eventually metamorphosed into a green agenda that was largely taken up by the
Social Democratic Party and the Christian Democratic Union.
The coming together of the CDU and the SPD in a grand coalition, shadowed
by the Greens, opened the door to the possibility of a political breakthrough that
could change the narrative and future direction of Europe, making it the leader of
a green transformation around the world.
By sheer serendipity, Germany was positioned to take over the presidency of
the Council of the European Union between January 1 and June 30, 2007 (each
member state assumes the presidency in rotation). Germany has always been a
prime mover in the EU, and in 2007 three of the five major political parties in
Europe were ideologically aligned in the country—the CDU, the SPD, and the
Greens. This presented us with a unique opportunity to change course in Europe
and move the continent toward a postcarbon green paradigm. All we needed was
a similar coalition of the five major parties represented in the European
Parliament to come together and pass a written declaration that would call for
the EU to mandate strict legal targets for decarbonizing its member states. The
six-month German presidency would be the defining moment.
Angelo Consoli, who directs our office in Brussels, and I met with Jo Leinen,
a senior member of the European Parliament from Germany and a leading voice
of the SPD, to strategize a plan of action that could unite all five major political
parties at the European Parliament: the European People’s Party–European
Democrats (EPP–ED), which is composed of Christian Democratic parties
across Europe; the Party of European Socialists (PES); the Greens–European
Free Alliance (Greens/EFA); the Alliance of Liberals and Democrats for Europe
(ALDE); and the European United Left–Nordic Green Left (GUE–NGL). The
objective was to coalesce around an EU parliament written declaration to
increase energy efficiencies, generate green energies, and reduce global warming
emissions and to make its targets mandatory requirements in the member states.
The passage of a formal written declaration in the European Parliament is a
rare occurrence. The rules require passage within a very narrow ninety-day
window, making it an extremely difficult and grueling task. Our parliamentary
team recruited supporters across the five major EU political parties and began
meeting with literally hundreds of parliamentarians and their legislative directors
and chiefs of staff, soliciting support. The declaration, which was passed just
days before the deadline, reads as follows:

The European Parliament,

—having regard to Rule 116 of its Rules of Procedure,
A. whereas global warming and costs of fossil fuels are increasing,
and having regard to the debate launched by the European
Parliament and the Commission on the future of energy policy and
climate change,
B. whereas a post-fossil fuel and post-nuclear energy vision should
be the next important project of the European Union,
C. whereas the five key factors for energy independence are:
maximising energy efficiency, reducing global-warming gas
emissions, optimising the commercial introduction of renewable
energies, establishing hydrogen fuel-cell technology to store
renewable energies and creating smart power grids to distribute
energy,
1. Calls upon the EU Institutions to:
• pursue a 20% increase in energy efficiency by 2020,
• reduce greenhouse gas emissions by 30% by 2020 (compared
to 1990 levels),
• produce 33% of electricity and 25% of overall energy from
renewable energy sources by 2020,
• institute hydrogen fuel-cell storage technology, and other
storage technologies, for portable, stationary and transport
uses and establish a decentralised bottom-up hydrogen
infrastructure by 2025 in all EU Member States,
• make power grids smart and independent by 2025 so that
regions, cities, SMEs and citizens can produce and share
energy in accordance with the same open-access principles
as apply to the internet now;
2. Instructs its President to forward this declaration, together with
the names of the signatories, to the Commission and the
governments and parliaments of the Member States.2
The European Parliament’s declaration reinforced the European Commission’s
similar mandates that were being formulated, giving Germany the needed
support to secure the 20-20-20 formula for decarbonizing the European Union.
In June 2007, in the last few days of the German presidency of the Council
of the European Union, Sigmar Gabriel asked me to join him and give the
keynote address at the German presidency’s closing conference of the twenty-
seven environmental ministers, officially inaugurating the EU’s new postcarbon
journey.
It needs to be emphasized that it was the three mandatory targets set in stone
by the European Union that led each member state to establish its own plans to
reach each of the targets set forth. The most important of these targets was the
one mandating that 20 percent of the energy used in the EU needed to be
renewable energy, particularly solar and wind, by 2020.3 To fulfill the mandate,
other countries began following Germany’s lead by introducing feed-in tariffs,
which prompted early adopters to produce green energy for sale back to the grid
at a premium price above market value.
The real value of the feed-in tariffs lies well beyond Europe reaching its
renewable energy targets. This incentive not only encouraged a flood of small
green energy producers to enter the market—primarily in the form of electricity
cooperatives—but also propelled companies to rev up R&D to a fever pitch,
fostering new technological innovations that dramatically reduced the fixed costs
of generating solar and wind electricity, moving them to near parity and even
below parity in some instances with the conventional fossil fuel energies a
decade later. Setting legally mandated targets, combined with feed-in tariffs to
promote the growth of competitive renewable energies, was the Great Disruption
that has now brought the fossil fuel civilization to the edge of an imminent
collapse.

The Great Disruption: Crossing the Green Line

But how do we know that Europe and the world are within striking distance of
the endgame for the carbon era? First, the feed-in tariffs, which were in place for
less than a decade, are already being phased out across the EU and in other
regions around the world because of the falling price of renewable energies
brought on by the rush of new innovations in solar and wind technology and
deployment.4 Following on the heels of the EU, the People’s Republic of China
entered the game, subsidizing its own solar and wind technology industries,
allowing them to mature and drop the price of generating renewable energy even
further, making solar and wind energies a prime mover in powering society.
While the subsidies for solar, wind, and other renewable energies phased in
and are now phasing out in a very short period of about ten years, fossil fuel
energies, even after a two-hundred-year run as the primary energy source, still
enjoy an eye-popping $5.3 trillion in post-tax subsidies per year (as of 2015)
around the world despite the fact that they are now quickly moving over to the
stranded asset column on the global accounting sheet. (Post-tax subsidies are, for
the most part, the calculation of “environmental damages from energy
consumption [which] are just as real as are supply costs … and any failure to
fully internalize them means that some of the damages from fossil fuel use are
not borne by fuel consumers and this constitutes a form of subsidy.”)5
The question being asked with growing urgency by some and with
incredulity by others is how the fossil fuel civilization could be close to an
endgame because of the upstart solar and wind energies when the latter made up
only 3 percent of global energy capacity in 2017.6
There is a rule of thumb in economics that is little known and mostly
ignored, even by the titans of the financial community and business sectors. Yet
it is remarkably prescient in predicting Schumpeter’s “creative destruction.”
Investors, on the whole, are not swayed as much by the size of an enterprise
or sector as by its growth curve. They will continue to stay onboard as long as
their investment shows increasing growth. If that growth loses momentum, they
take notice and often lose interest. When new challengers emerge, even if they
are seemingly inconsequential, if they begin to exhibit accelerating growth or
even an exponential growth curve, investors begin to shift allegiance to the
challenger. The key is the threshold. That is, when a challenger captures just 3
percent of the market from an incumbent, the incumbent’s sales often peak and
begin to decline, signaling its eventual demise.7 Kingsmill Bond, who is the lead
energy strategist for the Carbon Tracker Initiative, the previously mentioned UK
research organization of specialists tracking climate risks, observes that this rule
of creative destruction holds across all areas of commerce but is particularly
telling when analyzing the transitions in energy paradigms over history. For
example, gas lighting demand peaked when electricity accounted for only 3
percent of the lighting.8
Once again, the correlation to consider is not the size of the market vis-à-vis
an incumbent and a challenger but rather the sales growth of each player. Even
when the challenger enjoys only a tiny 1 percent of the market but a 20 percent
growth rate, the challenger is likely to gobble up all of the incremental growth
by year ten. Or, to take it from another angle, if the challenger has an exceptional
growth rate of 30 percent and the market growth rate is only 1 percent, then the
sales of the incumbent will likely peak at the point where the challenger’s market
share is only 3 percent.9
Kingsmill Bond describes four stages in the current energy transition in
Europe and around the world. Stage 1 is where solar and wind climb to provide
about 2 percent of the electricity. This is the initial innovation phase. Stage 2 is
where solar and wind have captured 5–10 percent of the energy market. This is
the peaking phase. Stage 3 is where solar and wind comprise 10–50 percent of
the market, the rapid change stage. The death knell is where solar and wind cross
over to more than 50 percent of the market.10 The peaking stage is the turning
point for the financial markets because that’s when the demand for fossil fuel
energies peaks and the industry begins to lose market share.
An additional factor needs to be added to the equation to understand the full
implications of a Great Disruption in energy. In 2017, 43 percent of the primary
energy in the world was used to generate electricity.11 Over the coming decades,
the electricity sector is going to use an increasing amount of global primary
energy as the transport sector decouples from fossil fuels and moves to electric
vehicles powered by the electricity grid.
According to the Carbon Tracker Initiative, the transitional moment is when
14 percent of global electricity will be supplied by solar and wind.12 Europe
passed the 14 percent tipping point in 2017 when 15 percent of electricity
generation was made up of solar and wind. The United States in 2017 was only
at 8 percent, China was at 6 percent, Latin America at 5 percent, India at 5
percent, Africa at 2 percent, and the Middle East at less than 1 percent. Solar and
wind supplied 6 percent of all global electricity in 2017.13
When will this transitional moment and tipping point occur on a global scale,
stranding trillions of dollars in fossil fuel assets and bursting the carbon bubble?
The two crucial variables in projecting global future energy supply are the
growth rate of global energy demand and the growth rate of solar photovoltaic
(PV) and wind supply.14 In the view of Kingsmill Bond:

If we make assumptions for these two factors, it is possible to

calculate the date at which fossil fuel demand peaks … assuming
total energy demand growth of 1.3% (assuming a slight fall from
the 5-year average) and solar PV and wind supply growth of 17%
 (assuming a continued S curve of supply growth, with growth rates
falling over time from the current level of 22%). The date of peak
fossil fuel demand is then 2023.15

Bond concedes that the Carbon Tracker Initiative’s “view of 1.3% energy
demand growth and 17% solar PV and wind supply growth is open to question”
and therefore offers a number of scenarios with a global growth rate of energy
demand of 1–1.5 percent and growth of solar PV and wind supply of 15–20
percent. All these scenarios “give a range of 2020 to 2027 for the date of peak
fossil fuel demand.”16
The US growth rate in combined solar and wind, at least, is spot on with the
Carbon Tracker trajectory. Solar and wind made up 4 percent of the electricity
generated in the United States in 2013, and in each succeeding year the figure
has risen by approximately 1 percentage point. In 2017, solar and wind
constituted 8 percent of the electricity, a figure that is projected to reach 10
percent by the end of 2019.17 Assuming this rate of increase continues, the
United States will likely reach 14 percent of solar and wind electricity generation
by the end of 2023 and be at or near the tipping point.
The carnage is palpable. Solar and wind costs are, in many cases, already
below the running cost of current coal- and gas-fired power plants.18 With more
and more solar and wind electricity coming onto the grid every day, operating
coal- and gas-fired power plants is becoming uncompetitive, forcing utilities to
shut them down, meaning their capital investment will never be paid off.
Early on, the natural gas industry argued that a new generation of gas-fired
power plants would need to be installed, offering up two seemingly convincing
rationales: first, that natural gas is the least onerous of the fossil fuels and emits
less CO2 than coal and oil and is therefore an appropriate bridge fuel on the way
to a low-carbon society; second, natural- gas-fired power plants need to be in
place when the sun isn’t shining and the wind isn’t blowing, providing backup
storage, especially at peak electricity times. Worried that this might be the case,
electric utilities began installing new gas-fired power plants, ostensibly to back
up variable renewable energies.
The electric utilities should have known better. By 2011, 68 percent of all
new electricity generation in Europe was coming from solar and wind power.19 In
reality, there was already enough solar and wind coming onto the EU electricity
grid by 2011 that the gas-fired power plants that were hastily installed would be
only infrequently used or not used at all, meaning, once again, that their capital
costs would never be paid down. The green route was on. It is now well
recognized that the exit ramp from a fossil-fuel-based electrical system to a
solar-and-wind-based electrical network appears when the latter crosses over the
14–15 percent barrier of penetration that, as mentioned, the EU reached in 2017.
The notion that variable solar and wind energy will require backup
conventional fossil fuel power to prevent power lapses for decades to come has
become a kind of modern-day urban myth, spread to a large extent by the gas
industry. It’s just not true. Battery storage and hydrogen fuel-cell storage at
rapidly declining costs can easily provide backup power to compensate for the
variability of solar and wind generation. Choosing the appropriate mix of solar
and wind power, recognizing the variability of each of these energies during
different seasons relative to the variability in power demands at different times
of the year, also helps maintain a dependable flow of electricity. Better demand-
side management, upgrading the grid code, and hastening the transition from a
servomechanical to a digital grid, making it smarter and more efficient at
integrating electricity between base and peak load times, are equally suited to the
task of maintaining the stability of electricity demand.20
When the terms “stranded assets” and “carbon bubble” are thrown around,
the dire implications of what these emerging realities might mean for the world
economy and civilization are often lost in the esoterica. However, knowing the
extent of the bad news is important so that humanity can prepare for the jarring
and unprecedented economic destabilization and accompanying social disruption
that will come with the collapse of the fossil fuel civilization.
We should also bear in mind that in this instance, the bad news is the good
news. The sooner the collapse of the fossil fuel era comes, the brighter the
prospect that humanity might be able to quickly scale up a smart, global green
infrastructure that will take us into a postcarbon ecological civilization,
hopefully in time to save our species, our fellow creatures, and the Earth we
inhabit.

Missing the Warnings

What, then, will the collapse of the old energy order and the birth of the new
energy regime look like? We can already get an inkling of what’s in store for
society because we have a precedent. The European Union is embroiled in the
transformation at this moment and is the canary in the mine.
The powers that be were late in recognizing the Great Disruption coming in
Europe. This was the first systemic failure. There was a twofold crisis taking
hold in the first decade of the twenty-first century right under the nose of global
institutions, nation-states, and the global business community who, for the most
part, seemed naïvely unaware of or unconcerned about the dark forces that were
surfacing. From the mid-1980s until the fall of 2003, crude oil was selling at a
steady price of about $25 per barrel and was of little concern to the business
community, workers, and their families. From then on, the price of oil began a
steady upward climb and didn’t stop until it reached a record peak of $147 per
barrel in July 2008.21 It wasn’t until oil went over $90 per barrel in 2007 that
global regulatory institutions, national governments, and the business
community began to take notice. This came when food riots broke out in the
poorest countries in the world because of the high price of staples like wheat,
corn, soybeans, and rice due, in part, to the rising price of oil. The average price
of rice skyrocketed by 217 percent, wheat by 136 percent, corn by 125 percent,
and soybeans by 107 percent.22 Panic set in as millions of the world’s poor went
without sufficient food.
What everyone else began to realize is that when the price of oil started to
climb beyond $90 per barrel, prices for everything else in the economy began to
go up as well. While in the highly industrial countries we make much of
increased gasoline prices affecting transportation, the public is far less aware that
the price of fossil fuels affects the price of almost everything else we produce
and consume in society. Our pesticides and fertilizers, construction materials,
pharmaceutical products, packaging, food preservatives and additives, synthetic
fiber, power, heat, light, and so on are made out of or moved by the carbon
deposits we extract from beneath the ground and the ocean floor. Purchasing
power began slowing with the rising price of oil in the spring of 2007. The
global economy was beginning to shut down. The oil bubble was far from
inconsequential, dragging down businesses and weakening the purchasing power
of people around the world, especially in the developing economies. Needless to
say, the major oil companies reaped record profits, while millions of businesses
went under because of the high price of oil in the materials they used across their
supply chains.23
I have firsthand experience here. My father owned a small manufacturing
company that transformed polyethylene film into plastic bags. The company,
which employed about fifteen people, was in continuous operation for more than
fifty years. When the price of oil shot up in 2007 and 2008, the cost of
polyethylene film went through the roof, followed in quick succession by the
economy careening into recession territory, meaning less demand for packaging.
The family business went under during the Great Recession, ending a half
century of operation.
The slowing economy was hit a second time, with a knockout punch, when
the subprime mortgage bubble burst in the summer of 2008. The financial world
and business community claimed they didn’t see it coming either, although I
suspect that’s disingenuous and fails the smell test. More likely, they turned a
deaf ear, caught up in what the economist John Maynard Keynes called the
“animal spirit” of a bull market that looked like its steep upward climb was
inevitable and irreversible. The bankers made a killing.
The shutdown of the global economy and the ensuing Great Recession
slowed the demand for electricity everywhere, leaving the power and electricity
sector with prior investments in power plants that were less utilized and partially
stranded.
The other systemic failure was not understanding the full implications of the
European Union’s decision in 2007 to transition the world’s largest economy out
of fossil fuels and into renewable energies, accompanied by greater energy
efficiencies and a reduction in global warming emissions. The European Union’s
new legally binding mandatory targets for renewable energy generation, along
with the generous subsidies in the form of feed-in tariffs, brought millions of
new players into the energy game, selling back to the grid green electricity
captured by solar panels on their roofs and wind turbines on their land.
My office was, to my knowledge, the first to use the term “zero marginal cost
renewable energy.” The concept didn’t seem to register among power producers,
who for several years were anxious to explain to me that the marginal cost of
solar and wind was never really zero although it was patently obvious that the
sun and the wind, unlike coal, oil, and natural gas, are nearly free to capture once
the fixed cost of installing the technology is paid back.
Zero marginal cost renewable solar and wind energy soon became the bête
noire of the power and electric utilities. Not only is the marginal cost near zero
in generating solar electricity, but the generation of the power also usually peaks
in the afternoons when the demand for electricity peaks and the electric utilities
reap their largest profit margins. In Germany, solar PVs reduced the peak price
for electricity by 40–60 percent. Overall, the average daily price of electricity
declined by 30–40 percent between 2007 and 2016, eroding profits for the
electric utilities.24
With the fixed costs of solar and wind electricity plummeting on an
exponential curve, the marginal cost of generating the new green energies near
zero, and the feed-in tariffs providing a premium price for green electricity
above the market price, the conditions were ripe for creating the perfect storm.
The profitability of gas- and coal-fired power plants plummeted, and so did their
utilization. They became stranded assets.
It’s worth remembering that the fossil-fuel-based power and electric utilities
in EU countries collapsed when renewable energies comprised only 14 percent
of the total market, leaving a heap of stranded assets behind. The losses totaled
more than €130 billion ($148 billion) in the European electricity sector in just
the six-year period from 2010 to 2015. The disruption in the European power
and electric utility market is going to be even more disorienting in the coming
years. Already, the discrepancy between the “book value” of property, plant
equipment, and goodwill and the “enterprise value” of just Europe’s leading
twelve utilities is reason for concern. The market value is only 65 percent of the
book value, a wide disparity, suggesting that dire losses are yet to come. With
the total book value of the twelve largest utilities listed at €496 billion ($560
billion), it’s not inconceivable, according to one study, “that 300–500 billion
euros of these assets are exposed to the risk of getting economically stranded.”25
Apparently much of the rest of the world has failed to heed what has taken
place in the European Union. The major gas-producing nations are upping
natural gas production, installing pipelines across continents, and establishing
cross-ocean supply lanes in a frenzied race to capture the global market. The
Energy Information Administration (EIA) of the US government projects that
natural gas production in the United States “grows 7% per year from 2018 until
2020.”26 In large part, the growth is coming from increasing demand within the
electricity sector to transition from coal to gas in order to reduce CO2 emissions
and lower costs, because gas is now cheaper than coal. While that is undeniably
true, the more important development is that solar and wind are now competitive
with natural gas and, in some instances, even cheaper, which changes the
equation once again, this time in favor of the cleaner renewable energies.27
According to 2018 research from Bloomberg New Energy Finance, “coal and
gas are facing a mounting threat to their position in the world’s electricity
generation mix as a result of the spectacular reduction in the cost not just for
wind and solar technologies, but also for batteries” (to store these variable
energies). Elena Giannakopoulou, head of energy economics at BNEF, notes that
some coal and gas plants with sunk costs might be sparingly used, but she goes
on to say, “The economic case for building new coal and gas capacity is
crumbling, as batteries start to encroach on the flexibility and peaking revenues
enjoyed by fossil fuel plants.”28
Price competition aside, the power and electricity industry continues to argue
that variable renewable energies are a nonstarter without natural-gas-fired power
plants backing them up with stored energy to maintain sustainability on the grid.
Far from being apologetic, the gas industry is bullish on the future of natural gas.
Richard Meyer, in charge of government affairs at the American Gas
Association, says, “I think it’s a safe bet that the use of natural gas will continue
to support a low-carbon future and that natural gas could increase in the [power]
sector.”29
If that were the case—and certainly the expenditures in natural gas pipelines,
power plants, and accompanying facilities suggest that, at least for now, the “gas
rush” still has momentum—it would mean a dramatic overshoot of the red line
the United Nations Intergovernmental Panel on Climate Change has laid down
for keeping global warming emissions under a 1.5°C ceiling.
But that’s not likely going to happen, and this time it’s not because
governments around the world have established binding targets on CO2
emissions. The fact is, for the most part, they didn’t. Rather, it’s because the
marketplace has already determined the outcome of the process, with solar and
wind technology becoming ever cheaper on a steep curve, now followed by the
falling cost of battery storage. And we can all thank the European Union for that.
By the member states of the EU committing to binding legal targets a decade
earlier, with short-term feed-in tariffs to encourage early adoption, businesses
were set loose to improve the operating performance of solar and wind and their
efficiencies, dramatically reducing the costs. China then followed, with its own
companies bringing on innovations in efficiencies and further lowering the costs
of generating solar and wind electricity.
As mentioned, China soon eclipsed Europe, becoming the leading producer
of cheap, efficient solar and wind technology, which it began exporting all over
the world. In its thirteenth Five-Year Plan, which commenced in 2016, China
also turned inward, with the massive production, sale, and installation of cheap
solar and wind technology in the domestic market.30 The new focus on installing
and harvesting solar and wind energy inside China coincided with the digital
upgrading of China’s electricity grid, enabling Chinese businesses and
communities to generate their own near-zero marginal cost renewable energy
and use it off the grid or sell it back to the grid.
Is it possible that the energy companies and power and electric utility
companies and, for that matter, countries around the world are oblivious to the
Great Disruption that has unfolded in the European Union and the People’s
Republic of China? Doubtful! I regularly meet with energy companies and
power and electricity companies in Europe, Asia, and the Americas. They know.
They see the numbers. They do the math. They watch what’s happening in
Europe and China. Yet they continue pushing forward a forty-year infrastructure
build-out of gas pipelines across continents and installing numerous gas-fired
power plants, upping the tally of global warming emissions and future stranded
assets.

Turning a Blind Eye in North America

So the “gas rush” is on and two of the biggest players are in North America. The
United States is now the leading producer of natural gas on the planet, and its
Canadian neighbor is the fourth-largest producer.31 While the Trump
administration is at least up-front about its avowed commitment to exploit every
possible opportunity to bring natural gas online for both domestic consumption
and export, the Canadian government uses every public opportunity to flaunt its
leadership in decarbonizing Canada and its prominent role in rallying the world
to address climate change. But when it comes to issuing permits and
underwriting gas projects, Canada has missed no opportunity to be at the head of
the pack. The negative economic consequences of these misguided policies to
keep the fossil fuel spigot wide open in North America are ominous, for the
United States, Canada, and the world.
What might these emerging trajectories mean for stranded fossil fuel assets, a
North American carbon bubble, and the destabilization of the US and Canadian
economies? Turning to the United States, the Rocky Mountain Institute (RMI),
which has advised the US government’s Department of Defense and Department
of Energy, as well as other governments around the world, issued a detailed and
extensive 2018 report titled The Economics of Clean Energy Portfolios: How
Renewable and Distributed Energy Resources Are Outcompeting and Can
Strand Investment in Natural Gas-Fired Generation.
Working backward, the report concludes that the frenzied rush to natural gas
in the US electricity system “could lock in $1 trillion of cost through 2030.” To
begin with, the US power grid, once the envy of the world, is aging. More than
half of the thermal power plants that are more than thirty years old will be retired
by 2030. The current low cost of domestic natural gas has spurred a huge
investment in a new generation of natural-gas-fired power plants, expected to
reach $110 billion by 2025. By 2030, the electric power industry will have to
spend upward of $500 billion to replace all the aging power plants scheduled for
retirement. It will cost an additional $480 billion for the fuel to operate those
power plants, for a total of approximately $1 trillion in costs through 2030. This
at a time when the plummeting price of solar and wind energies is already
competitive with natural gas and in a few short years will be far cheaper, with a
near-zero marginal cost and zero global warming emissions.32
The toll is mind-boggling and grim. This will saddle the US power and
electricity industry not only with a potential trillion dollars in stranded assets but
also with 5 billion tons of CO2 emissions by 2030 and nearly 16 billion tons by
2050.33
RMI ran a comparative study of two planned combined-cycle gas turbine
power plants and two planned combustion turbine power plants being readied for
peak-hour operation against optimized and region-specific renewable energy and
distributed energy sources that can provide comparable services. The study
found that in all four cases, an optimized clean energy portfolio is more cost-
effective and lower in risk than the proposed gas plants. The implications are
stunning. The data showed that “the same technological innovations and price
declines in renewable energy that have already contributed to early coal-plant
retirement are now threatening to strand investments in natural gas.”34 The RMI
study is a potential thunderbolt for the US power and electricity sector in the
United States and, if acknowledged soon enough, could quickly allow it to make
the shift from fossil fuel to green energies in as little as a ten-year span. It’s
worth sharing RMI’s conclusion at length:

Our analysis reveals that across a wide range of case studies,

regionally specific clean energy portfolios already outcompete
proposed gas-fired generators, and/or threaten to erode their
revenue within the next 10 years. Thus, the $112 billion of gas-
fired power plants currently proposed or under construction, along
with $32 billion of proposed gas pipelines to serve these power
plants, are already at risk of becoming stranded assets. This has
significant implications for investors in gas projects (both utilities
and independent power producers) as well as regulators responsible
for approving investment in vertically integrated territories.35
 The United States’ northern neighbor, Canada, is also investing heavily in
natural gas exploration, extraction, and sale. While Canada is regarded as a
country fiercely dedicated to the environment and protection of its natural
resources, there is another, darker Canadian persona deeply tied to fossil fuel
energies. Like the United States, the Canadian government, several of the
provinces, the financial community, and businesses are awash in fossil fuels.
In recent years, much of the criticism by environmental organizations has
centered on tar-sand extraction in the province of Alberta, with periodic protests,
lawsuits, and legislative battles attempting to rein in one of Canada’s most
lucrative economic enterprises. Canada is the fourth-largest producer of crude oil
in the world, after the United States, which is ranked number one, Saudi Arabia,
and Russia. Canada extracts and refines more fossil fuels than Iran, Iraq, China,
the United Arab Emirates, Kuwait, Brazil, Venezuela, and Mexico, which I
suspect will come as a surprise to most of the rest of the world.36 Less known is
that British Columbia has entered the fossil fuel arena, with deep natural gas
reserves in the northern tier of the province. Technical breakthroughs in the
fracking of natural gas over the past decade, accompanied by the discovery of
rich natural gas reserves, have led to a rush into fracking across the region.
British Columbia is a good case study in competing visions: one deeply
committed to a fossil fuel future and the other to a green postcarbon era.
Vancouver, surrounding cities, and many of the First Nations bands in the
northern regions of the province are among the fiercest proponents of a
conservation-oriented green Canada. The Vancouver metropolitan area is often
cited as one of the greenest governing jurisdictions in the world. These
competing visions make the region a lightning rod in the struggle between the
old and new energies, the outcome of which will give us a good indication of the
course other regions in Canada might take as they find themselves caught
between these two approaches to the future.
On October 2, 2018, Canada flexed its fossil fuel muscle in a very public
way. Prime Minister Justin Trudeau joined British Columbia’s premier John
Horgan and representatives of LNG Canada, a consortium of oil and gas
companies led by Royal Dutch Shell and including Mitsubishi Corporation,
Malaysian-owned Petroliam Nasional Bhd, PetroChina, and Korea Gas
Corporation, to announce the construction of a liquefied natural gas (LNG)
pipeline.37 The pipeline will stretch across 670 kilometers, taking gas from
Dawson Creek in northeastern British Columbia to a processing plant on the
coast in Kitimat to be shipped to China and other Asian markets.38 The C$40
billion ($30 billion) investment by LNG Canada is the single largest private-
sector investment in Canadian history. Trudeau announced that the federal
government would be providing C$275 million ($207 million) in support of the
deployment.39
The LNG pipeline faced bitter opposition and protests by environmental
organizations and First Nations. Less known by the public is that energy
forecasters and analysts who have scoped the project are reticent and even
guardedly pessimistic about the wisdom of locking British Columbia and the rest
of Canada into a natural gas future that will be amortized over many decades.
The Brattle Group published a nuanced report on the future prospects of
LNG back in January 2016—two years and eight months prior to the formal
announcement of the project—raising serious concerns about Canada shipping
LNG to China, in light of the blitzkrieg competition there from solar and wind
energies. Its reticence should have raised some red flags but apparently was
either ignored or not taken seriously. The report pointed out that in Germany and
California, “where renewable penetration has been high, gas demand growth has
already been stunted by the penetration of renewables in the generation mix
(causing a reduction in gas demand growth for power generation).”40
Now, China is following a similar path, with a short-term push in natural gas
production to accompany the phase-out of coal and a simultaneous increase in
solar and wind energy production, with the goal of eliminating virtually all fossil
fuels from the energy mix over the next several decades. Like the experience in
the EU, much will depend on when the plummeting costs of renewable energies
in China will force a disruption in the Chinese energy market, leaving billions of
dollars of stranded natural gas assets in its wake on the way to creating a green
energy infrastructure across the country.
The disruption is already beginning to happen. As already noted, China is
now the number-one producer of solar and wind energy technology and boasts
the cheapest prices on world markets, making it the leading exporter.41
Moreover, the current thirteenth Five-Year Plan has set ambitious targets for the
installation of solar and wind technology across every region of China, rivaling
the earlier deployments in the European Union.
The Brattle Group report alludes to the trends in China that are mimicking
the earlier disruptions in the European energy market, noting that if the costs of
domestic production and deployment of renewable energies continue to drop
precipitously, China’s demand for imported liquefied natural gas could dry up.
 If the cost of renewable generation is low enough overseas (i.e.
below the cost of new gas-fired generation burning LNG from
North America) it could dampen the attractiveness of North
American–sourced LNG as a fuel for electric generation.42

The report concludes on a cautionary note about the potential long-term

implications of investment in LNG infrastructure now being laid out in British
Columbia to export gas to the Asian market.

The investment risk of these proposed LNG export projects is

increasing because there is a significant possibility that, over the 20
years of a typical LNG contract, power production from renewable
energy sources will become less costly than the LNG sales prices
needed to justify the upstream LNG investment cost (even without
considering the value of avoided greenhouse gas emissions).… The
competition between LNG-fueled gas-fired generation and
renewable resources represents a risk to participants in the LNG
industry in that higher than expected renewables penetration could
reduce future natural gas demand growth (and LNG demand
growth) in some of the key overseas Pacific Asian markets. Both
investors in LNG infrastructure and buyers of LNG under long-
term contracts will want to consider these risks before making large
and long-term commitments to buying or selling LNG.43

For both the United States and Canada, the commercial case for the
continued introduction of large-scale natural gas projects no longer exists
because of the ever-cheaper cost of generating solar and wind electricity.
Nonetheless, the fossil fuel industry continues to defend these investments,
arguing that natural gas is at least not as onerous as coal in CO2 emissions.
Equally egregious, the industry continues to tout the “technology” known as
“carbon capture and storage” as a way to use the fuel without emitting harmful
CO2 emissions into the atmosphere when, in reality, this technology is already a
stranded asset. Carbon capture and storage technology should not be confused
with natural carbon sequestration brought on by carbon farming, reforestation,
and other organic processes that absorb CO2 from the atmosphere. A quick
Google search of every single carbon capture experiment to date and the reams
of scientific reports published on their technical and commercial unviability
should put the so-called promise of this technology to rest. We had this debate
around carbon capture and storage technology in the EU for more than a decade,
and it might be helpful to share our experience as this techno-theme has recently
been touted in the United States by the fossil fuel industry and some elected
officials.
Carbon capture and storage technology is a three-part process, beginning
with the capture of CO2 emissions produced from electricity generation and in
industrial processes. The captured CO2 is subsequently transported by road
tanks, ships, and pipelines to storage facilities. The carbon is then stored deep
under the ground in geological rock formations.
After the expenditure of hundreds of millions of dollars in establishing pilots
to test the feasibility of this technology, the EU threw up its hands, realizing that
the process was unable to meet either the technical or commercial expectations.44
Energy historian Vaclav Smil summarized the commercial consensus after years
of failed efforts. He made the point that “in order to sequester just a fifth of
current CO2 emissions, we would have to create an entirely new worldwide
absorption-gathering-compression-transportation-storage industry whose annual
throughput would have to be about 70 percent larger than the annual volume
now handled by the global crude oil industry, whose immense infrastructure of
wells, pipelines, compressor stations and storage took generations to build.”45
Unfortunately, America appears to be repeating the EU’s failed experiments.
Southern Company embarked on a carbon capture and storage project for its
coal-powered electricity in 2010 at its Kemper power plant in Mississippi to
prove the viability of carbon capture and storage. After years and years of effort
and cost overruns that took the project from an initial $2.4 billion budget to a
total bill of $7.5 billion, Southern Company canceled the project and passed on
$1.1 billion of the cost to its rate payers.46
Whether it is the rush to invest massive amounts of finance capital in natural
gas extraction and power generation or in carbon capture and storage technology,
when the former is no longer cost-competitive and the latter is not
technologically feasible or commercially viable, it brings to mind the old adage,
“if you find yourself in a hole, stop digging.” Just leave the fossil fuels in the
ground.
Rather than focus on futile and failed carbon capture technologies, some
industry players have begun to turn their attention to decarbonizing what are
called the hard-to-abate sectors. These are the most challenging industries and
businesses because there are not yet commercially viable alternatives to the use
of fossil fuels in their processes, product lines, and services.
Much of the CO2 abatement in these industries will come from plugging into
a smart Third Industrial Revolution infrastructure that will allow them to power
their production with renewable energy and to manage their transport and
logistics supply chains with short-haul electric vehicles powered by green
electricity and with long-haul hydrogen-fuel-cell-powered transport on road, rail,
and water routes. Big Data and algorithm governance of supply chains and
logistics operations will also increase these companies’ aggregate efficiencies in
ever more circular business processes.
When it comes to plastic packaging and to steel, cement, and other
construction-related materials, it will also be necessary to find fiber-based
biological substitutes. Recently, some of the world’s leading chemical companies
have begun to join together with genetics and life science companies in
accelerated R&D efforts designed to find cheaper alternative biological-based
products and processes. Again, as in other industries, the chemical company
leaders are keen to reduce CO2 emissions to slow down climate change and are
increasingly alarmed about the prospect of stranded assets going forward.
Products from these R&D initiatives are beginning to reach the market. For
example, airlines including United, Qantas, and KLM already use some bio-
based fuels but will require much more extensive R&D to fully transition into
powering air travel with a cost-effective bio-based energy.47
Bio-based materials are replacing petrochemicals in such key areas as
bioplastics, bio-based food and feed ingredients, biosurfactants, and
biolubricants. There is vast market potential for replacing petrochemicals with
biological-based materials in a wide range of products and processes, including
clothing, film, filters, beverages, animal feed, snack foods, household detergents,
industrial cleaners, and automotive and industrial lubricants.48
DowDuPont Inc., the world’s second-largest chemical company, is among
the leaders engaged in research involving hard-to-abate processes and product
lines. In October 2018, I joined Dow’s executive team at its European Innovation
Summit in Frankfurt to discuss new R&D efforts to expedite the introduction of
biological-based substitutes into the market to hasten the transition into a zero-
emission economy. Two of our Third Industrial Revolution roadmap test regions
—Hauts-de-France and the Metropolitan Region of Rotterdam and The Hague—
are currently involved in cross-industry initiatives to bring biological substitutes
quickly to market. Regions and industries should be motivated with generous
carrots and equally onerous sticks to advance this critical transformation in the
economy.

The Curse of Black Gold

In the last two years or so, the issue of stranded fossil fuel assets has been
coming up with greater frequency in corporate boardrooms, financial
institutions, government ministries, and think tanks around the world. This is not
the normal conversation about the ebb and flow of markets and short-term
government tweaks of economic policies, or simply about resetting agendas, but
something more disconcerting that goes beyond even the occasional downturn
into bear markets or deep recessions. There is a sense that something far bigger
is occuring, affecting not only the global economy but our very existence and
how we understand the world we live in, as well as the reliable future we took
for granted.
The notion of stranded assets is more than just an economic accounting of
the entropy debt for two centuries of burning carbon to create an industrial
society. The stark reality of all this growing angst can be felt in a very personal
way in the carbon-rich nations of the world, whose very economies depend on
the extraction and sale of fossil fuels.
There is a favorite saying in the Middle East that I’ve heard countless times
during my visits and meetings there over the years. It’s attributed to Sheik
Rashid bin Saeed al Maktoum, who was both the vice president and the second
prime minister of the United Arab Emirates and the ruler of the Emirate of
Dubai. His reign extended from 1958 to his death in 1990.
The saying goes like this: “My grandfather rode a camel, my father rode a
camel, I drive a Mercedes, my son drives a Land Rover, his son will drive a
Land Rover, but his son will ride a camel.” Sheik Rashid was worried that the
euphoria in the Emirates upon the discovery of oil in the late 1960s would come
back to haunt his people, and he predicted that the country would run out of oil
within a few generations—and then what? He saw oil more as an addiction and a
curse and worried that if his country became a single-resource economy and
society, there would be a day of reckoning when the oil spigot ran dry. He spent
a lifetime diversifying the economy, turning Dubai into a regional hub for global
trade between East and West. The oil hasn’t run out, but it is fast becoming a
stranded asset. Most of the oil that is left will remain forever in the ground.
It’s not just the Emirates at risk. It’s also carbon-rich countries around the
world whose economies are so utterly dependent on the extraction, refining, and
sale of oil, gas, and coal. To say that the world’s banks, insurance companies,
sovereign wealth funds, and private equity funds are worried would be an
understatement. In 2018, the World Bank issued a report titled The Changing
Wealth of Nations 2018: Building a Sustainable Future, which laid out a somber
analysis of what’s in store for carbon-rich nations.
The World Bank pointed out that while private-sector investors and
companies in the fossil fuel sector can always divest and reinvest in other more
profitable and sustainable enterprises, carbon-rich sovereign nations tied to
territorial boundaries are far more constrained and far less agile. Of the 141
nations that enjoy some carbon wealth, 26 of the countries have at least 5 percent
of their wealth in fossil fuels, and most of them derive more than half their
revenues from oil, gas, and coal. These are also among the poorest countries in
the world, and ten of them are in the Middle East and North Africa, regions in
crisis, with failed states and authoritarian regimes.49 The potential of hitting the
wall with stranded assets and loss of carbon revenue would be devastating for
these countries.
To get a sense of the magnitude of the pending crisis, the World Bank reports
that “the top 10 state-owned carbon-resource companies account for $2.3 trillion
of state-owned produced assets related to extraction and processing of fossil
fuels.”50 With fossil fuels trending toward peak demand and the beginning of
slower growth, the World Bank is beseeching the carbon-rich and carbon-
dependent countries to quickly diversify their economies to ensure a sufficient
tax revenue to make up for the losses.
Some of the countries are attempting to divest and reinvest in green
technologies, but their efforts have been minuscule. The World Bank concludes
its report on the carbon-wealthy nations on a pessimistic note, saying that while
divestment and reinvestment would be the best course to follow, unfortunately,
“as the data show, governments have failed to use their fossil fuel wealth
sustainably over the long term.”51 Try to imagine the chaos across the Middle
East and North Africa in as little as five to ten years when oil is expected to peak
in demand and slow in growth.

The Financial Community Sounds the Alarm

To get a sense of where things stand in regard to stranded assets in the fossil-
fuel-related sectors, it’s always best to follow the money—which means looking
to the banking sector and insurance industry. Citigroup and Mark Carney, the
governor of the Bank of England, were among the first to sound the alarm back
in 2015; now the alarm bells are ringing everywhere, which should be a wake-up
call across the global economy.
The World Bank is only one of several leading financial institutions to
address the issue of fossil-fuel-related stranded assets and how they are fast
changing the financial landscape and the rules of the game in the investment
community. Lazard issued its own report in November 2018 comparing the cost
of fossil fuel energies to the new green energies. Like reports from many of the
world’s leading energy consultancies, and even some of the oil giants, Lazard’s
study shows that “in some scenarios … alternative energy costs have decreased
to the point that they are now at or below the marginal cost of conventional
generation.”52 George Bilicic, vice chairman and global head of Lazard’s Power,
Energy, and Infrastructure Group, drives home the point:

We have reached an inflection point where, in some cases, it is

more cost-effective to build and operate new alternative energy
projects than to maintain existing conventional generation plants.53

With reports like these, stranded fossil fuel assets have become an
inextricable part of the climate change debate.
The Prudential Regulation Authority (PRA) at the Bank of England
published the results of a survey of 90 percent of the UK banking sector in
September 2018, representing £11 trillion ($14.2 trillion) in assets. The PRA
found that 70 percent of the UK banks recognized that climate change is now
posing a risk to a wide range of assets across almost every field, “and they have
started to assess how the transition to a low-carbon economy driven, for
example, by government policy and technical change, may impact the business
model of companies that banks are exposed to.” More disturbing, however,
despite the awareness of the issue, only 10 percent of the banks were currently
managing these risks “comprehensively,” and 30 percent of the banks “still only
considered climate change a corporate social responsibility issue.”54
Concerned that the banking sector might not be fully aware of how quickly
climate change is affecting investment risks across virtually every sector of the
global economy, including potential stranded assets in the fossil fuel sector and
closely coupled industries, Mark Carney stepped in a second time.
Aside from his role as governor of the Bank of England, Carney also served
as chairman of the Financial Stability Board (FSB) until the end of 2018, an
international body that makes recommendations on the oversight of the global
financial system. The FSB includes all G20 major economies and the European
Commission. Carney realized that the banking system was ill prepared for the
barrage of stranded assets coming its way. So he and the FSB established the
Task Force on Climate-Related Financial Disclosures (TCFD), chaired by
Michael Bloomberg. Its thirty-two members include representatives from large
banks, insurance companies, asset managers, pension funds, and accounting and
consulting firms, and it was commissioned “to develop voluntary, consistent,
climate-related financial disclosures that would be useful to investors, lenders,
and insurance underwriters in understanding material risks.”55
The TCFD released a set of recommendations in June 2017, beginning with
an acknowledgment that the majority of banking institutions perceived climate
change as a phenomenon whose effects are felt over the long term and are not
relevant to financial investments made today. In other words, there was almost
no understanding of the disruptions already unfolding and the forecasts coming
from some of the leading energy consultancies on imminent tipping points in the
2020s, and therefore little sense of urgency about reassessing their approach to
current investment decisions.
The task force recognized that increases in energy efficiency and the targeted
reduction in global warming emissions, coupled with the accelerated
replacement of fossil fuel energies with ever-cheaper green energies, “could
have significant, near-term implications for organizations dependent on
extracting, producing, and using coal, oil, and natural gas.” But the authors of
the report hastened to add that “in fact, climate-related risks and the expected
transition to a low-carbon economy affect most economic sectors and
industries,” not only the energy sector. They cited a study by The Economist
Intelligence Unit estimating that the risk to the total global stock of manageable
assets could be as high as $43 trillion over the course of the next eighty years.56
The report also emphasized that the Great Disruption creates “significant
opportunities for organizations focused on climate change mitigation and
adaptation solutions.” The report cites an International Energy Agency estimate
that the transition to a low-carbon economy will require around $3.5 trillion in
new investments per year for the foreseeable future in the new energy sector to
reach the goal of a low-carbon society over the course of the next three
decades.57
The entwined relationship between climate change risk across the entirety of
the global economy and the risk of stranded assets in the fossil fuel sector was
not lost on the authors of the report. Here’s how they put the conundrum:

This means that global investors are currently facing a stark choice.
Either they will experience impairments to their holdings in fossil
fuel companies should action on climate change take place, or they
will face losses to their entire portfolio of manageable assets should
little mitigation be forthcoming. Charting a path away from these
two options should be a strong motivation for long-term investors
to engage with companies in their portfolios and to shift
investments towards a profitable, low-carbon future.58

The TCFD realized that it was necessary to establish a set of guidelines that
could be used by investors, lenders, banks, and insurance companies to model
risks and opportunities to mitigate damage caused by stranded assets, as well as
to initiate projects more aligned with reducing global warming emissions and
prepare the appropriate criteria and data-collecting disclosure information to
which companies would need to comply. Its disclosure recommendations
focused on four areas that reflect how organizations function: governance,
strategy, risk management, and metrics and targets. Within these thematic
categories, financial institutions were asked to disclose information on the
“oversight of climate-related risks and opportunities … over the short, medium,
and long-term,” describe how the organization went about “identify and
assessing climate-related risks,” and explain “the metrics used … to assess
climate-related risks and opportunities.”59
In 2018, at the One Planet Summit in New York City, Mark Carney
announced that “climate-disclosure is becoming mainstream.… Over 500
companies are now supporters of the TCFD, including the world’s largest banks,
asset managers, and pension funds, responsible for assets of over $100 trillion.”60
This was a clear sign that the financial community was beginning to understand
the Great Disruption that was closing in on it.
 PART II

A GREEN NEW DEAL RISING

FROM THE ASHES
 5

WAKING THE GIANT

Pension Power Finds Its Voice

Increasing concern over climate change, loss of confidence in the long-term

financial stability of the fossil fuel industry now facing the prospect of stranded
assets, and the growing competitive advantage of emerging solar, wind, and
other renewable energies are triggering a reevaluation of funding priorities
within the global financial sector, with an escalating number of funds
transitioning capital away from fossil fuels and into green energies and the clean
technologies of the twenty-first century.
A 2018 survey of UK fund managers with portfolios totaling £13 trillion
($17 trillion) conducted by the UK Sustainable Investment and Finance
Association and the Climate Change Collaboration found that they believe that
“International Oil Companies (IOCs) will be negatively revalued within a few
years because of climate change related risks.” In the report, 62 percent of fund
managers “see peak demand for oil impacting valuations in the next 5 years and
peak demand for gas impacting valuations in the next 10 years.” Over half of the
respondents (54 percent) said that “the reputational risks of IOCs are already
negatively impacting their valuation.” Seventy-nine percent said they will have
an impact in the next two years. Fund managers cited a number of other related
concerns, “such as the increasing competitiveness of alternative technologies
leading to a drop in demand for fossil fuels and a shift in market sentiment as
investors lose faith in IOCs ability to transition in a financially successful
manner. In all, 89 percent of managers agreed that these and other transition
risks would impact valuations of the IOCs ‘significantly’ in the next 5 years.”
Half of the fund managers reported that they “already offer active funds or
bespoke portfolios that have ‘divested from (at least) the 200 coal, oil and gas
companies with the largest reserves.’”1

Flipping Karl Marx's Thesis Upside Down

In the United States and around the world, the question of where the money is
going to come from to build out and scale up a Green New Deal Third Industrial
Revolution infrastructure, customized in each region, is becoming ever more
pressing. When we think of a Green New Deal, the issue of “massive federal
government expenditures” is inevitably the first roadblock on the way to
constructing the grand vision and narrative. Even now, when the crisis is nothing
short of the very survival of life on Earth, the naysayers are apt to argue that we
can’t afford it, as if the issue of potential extinction is merely a line item to
dispose of among the many other weighty government priorities that require
attention.
Although some government funding at each level—city, county, state, and
federal—will be required, it is probable that a good portion of the financing
needed to build out the new infrastructure will come from global pension funds.
Pension funds are the deferred wages of millions of workers in the public and
private sector, payable upon retirement from their employment.
Karl Marx would never have envisioned a twenty-first century reality where
“the workers of the world” are the primary owners of global investment capital
via their public and private pension funds. It might come as a revelation that
pension funds were the largest pool of investment capital in the world by 2017 at
$41.3 trillion. As mentioned in the introduction, the US workforce is the most
powerful voice, with assets exceeding $25.4 trillion in pension funds.2
Worried over climate change and the prospect of their funds remaining in a
fossil fuel industry beset by stranded assets, which could wipe out the retirement
funds of millions of American workers, US pension funds are beginning to take
the lead in the divestment process. States and cities are divesting public pension
funds from the fossil fuel sector and related industries that service and/or depend
on it, like the petrochemical industry, and reinvesting in the green opportunities
that constitute the smart Third Industrial Revolution economy. Private pension
funds are also beginning to do the same.
A growing number of union voices are also pushing for the retraining of their
workforces for the new employment opportunities that accompany the
transition.3 It is foreseeable that in the future pension funds will increasingly
invest in green infrastructure in regions across the United States and in other
countries, with the expectation of using unionized workforces, at least in part, on
the projects.
The enormous pool of pension capital has been amassed in just seven
decades. While it’s not a revolution in the traditional sense, and although most
people, including the millions of owners of these pension funds, are unlikely to
view themselves as a class representing this impressive pool of capital invested
in the world, this is the new reality. In some ways, it’s the best-kept secret of
modern capitalist history.
The sheer economic clout that this $41.3 trillion represents, if fully embraced
and controlled by the millions of individual capitalists that make up this cohort,
could lead to a fundamental realignment in the relationship between the global
workforce and the economic institutions that govern the international economic
order.
So, to turn Marx on his head, imagine the workers of the world uniting as an
army of “little capitalists.” As of 2017, there were 135 million public and private
sector workers in the United States, and 54 percent of them participated in
pension fund retirement plans. That’s nearly 73 million part- and full-time
workers—an army of little capitalists.4 And what would happen if the American
pension capitalists were to join together with a legion of pension capitalists from
around the world and begin to exercise control over this giant pool of capital in
the global economy?
Without firing a shot, without a class struggle, without strikes, rebellion, or
revolution, the tables have turned, at least on paper, with the reality that these
millions of workers are the primary capitalist class today. I say “on paper”
because very few of these millions of capitalists see themselves as a class or
even a cohort. But what if they did step up and make a claim—a seizure of
power, if you will—over how their deferred wages and retirement income are to
be invested? What then?

The day was May 13, 1946, a rather ordinary day in the halls of the US Capitol.
The Senate began deliberating on who should control a newly emerging form of
wealth they referred to as “pension capital.” A debate was gaveled into session
by the president pro tempore, Kenneth McKellar. At stake was a bargaining
demand made by John L. Lewis, the powerful head of the coal miners’ union and
a leader of the American labor movement. Lewis had called for employers to set
aside ten cents for every ton of coal mined by their miners to be put in a health
and welfare fund, which would then be administered by the union on behalf of
its membership.
Senator Harry Byrd of Virginia was the first to take to the floor. Byrd made
no pretense in expressing his opposition to the proposal that Lewis had put forth.
Looking down the line, Byrd warned that “if such a privilege were to extend to
all contracts made between employers and employees throughout America … it
would result in payments totaling at least $4 billion a year and perhaps more.” If
labor were “to use such payments in establishing funds over which nobody but
the labor representative would have any control … labor unions would become
so powerful that no organized government would be able to deal with them.”
Eyeing the implications of unions overseeing their members’ own funds and
investing them on their behalf, Byrd argued that it would eventually lead to a
“complete destruction of the private enterprise system of the United States.”5
Despite Byrd’s misgivings, the US House of Representatives and the US Senate
passed a bill, only to see it vetoed by President Harry Truman.
A year later, however, Senator Robert Taft, a prominent Republican leader,
inserted an amendment in the Taft-Hartley Bill—a piece of legislation that was
designed to establish how labor unions were to be regulated—calling for a
jointly trusteed board in all union-bargained pension funds, with half the
representatives coming from the unions and half from the employer. Taft was
concerned that if union leaders were to be the sole trustees, they might use their
members’ funds for corrupt purposes or to exercise financial clout and political
power.
Senator Claude Pepper, a Florida Democrat, took umbrage at Taft’s
insinuations and suggested the real reason Republican members of Congress
opposed labor unions controlling their members’ funds was fear that the
Republicans’ close friends on Wall Street might lose control over a promising
new pool of investment capital that was sure to grow and become a force to
reckon with in ensuing years.
The amended bill passed, and Congress was able to override a second
presidential veto, making it the law of the land. An ancillary condition was
inserted into the final bill: that the pension funds could only be invested in a way
that maximized the returns on the investments for the beneficiaries. This
limitation on how the funds could be used effectively put them exclusively in the
hands of Wall Street and ensured they would only be used to advance the capital
market.
 In 1974, Congress passed and President Gerald Ford signed the Employment
Retirement Income Security Act, known as ERISA, which further tightened the
ways the funds could be invested, inserting what has become known as the
“prudent man rule,” ostensibly intended to protect pension funds from
unscrupulous financial advisors. Instead, it ensured that the funds would only be
used to advance the interests of the financial community, which would determine
the scope and dimensions of what constituted a prudent investment. William
Winpisinger, the head of the powerful Machinists Union, spoke for organized
labor, suggesting that the “prudent man rule” was merely legalese for seizing
control of workers’ deferred wages to advance the interests of the banking
community.6
Decisions made in the US Congress back in 1946 on how and who should
oversee pension capital would come home to roost in the late 1970s, in ways that
will be described in detail below, literally changing the fate of the fourteen
northeastern and midwestern states and the lives of millions of working people.
The consequences would reverberate forward to this very day, locking
generations into downward mobility, poverty, abandonment, and exclusion from
the great American dream.
To better understand how this change in the economic landscape of the
country occurred, and its impact on the lives of millions of Americans, we need
to explore the importance of new infrastructure paradigms. Infrastructure is a far
more pivotal agent in dictating the well-being of individuals, families,
communities, businesses, and workforces, and the distribution of the fruits of
society, than is generally recognized in academia or in political discourse.
In the case of the First Industrial Revolution in the United States, railroads
played a key role in the rearrangement of economic life. Hub-to-hub rail service
gave birth to dense, highly populated cities along the rail routes across the
northeastern and midwestern corridors. Similarly, the telegraph system, which
was first used to coordinate rail traffic, was located along rail routes. Coal, the
primary energy powering the First Industrial Revolution, came largely from
mines in Pennsylvania and Ohio in the northern tier. The steel industry,
publishing industry, and other First Industrial Revolution industries similarly
lined up alongside the rail infrastructure that connected the bustling northern
cities.
The build-out of the Second Industrial Revolution infrastructure between
1905 and the 1980s overlapped and eventually absorbed or replaced much of the
First Industrial Revolution infrastructure. During this transition, the economic
geography in America shifted again. The mass production of automobiles and
the introduction of national road systems, particularly the interstate highways
crisscrossing every part of the country, distributed mobility and logistics.
Electricity and telephone lines were strung everywhere and extended to
everyone, reaching into every nook and cranny in America. Oil, the key energy
to power an automobile culture, although originally discovered in Titusville,
Pennsylvania, in 1859, was quickly found in Texas, Oklahoma, and later
California. Oil also made airplanes and air travel possible, as well as giant
container ships, advancing trade from a national market to a global market.
Let’s bring this home to the vast economic, social, and political upheaval that
occurred in the United States in the mid-twentieth-century. The story starts
below the Mason-Dixon Line on October 2, 1944, when a crowd of some 3,000
people in Clarksdale, Mississippi, watched with awe the demonstration of a new
machine—the mechanical cotton picker. In one hour, the machine picked 1,000
pounds of cotton in the same time a single black laborer picked 20 pounds.7 By
1972, 100 percent of the cotton in the South was picked by machine.8
Immediately after World War II, chemical defoliants were introduced into the
southern farm fields, eliminating jobs for black workers who for centuries had
chopped down weeds, first as slaves and after the Civil War as sharecroppers.
Overnight, the black workforce in the South became unemployable and
redundant. Thus began what Nicholas Lemann, the author of The Promised
Land, characterized as “one of the largest and most rapid mass internal
movements of people in history.” More than 5 million African American
families headed north in the “Great Migration,” settling in the northern and
midwestern states.9 There, the men found jobs in the auto industry in Detroit, the
steel industry in Gary, Indiana, and Pittsburgh, the stockyards of Chicago, etc.
By the 1970s, over half of the black population of the South had migrated to the
North, leaving behind a rural life of poverty and destitution governed by Jim
Crow laws for employment in northern factories.10
The big industrial unions—particularly the United Automobile Workers
(UAW), the United Steelworkers, the Industrial Union of Electrical Workers, and
the Machinists Union—were becoming more vocal in the two decades following
World War II, making more pressing demands in their labor negotiations with
management. And these giant international unions welcomed black workers
newly arrived from the South. Ford’s flagship River Rouge plant in Detroit, for
example, was also the home of the UAW’s most activist local union, whose
membership was over 30 percent African American.11 Similarly, in the 1950s in
Detroit, 25 percent of Chrysler’s workers and 23 percent of General Motors’
workers were African American.12
Management, anxious to escape the growing demands being made by an
empowered unionized workforce, developed a two-prong exit strategy. First, the
automobile companies introduced computers and numerical control technologies
on the factory floor—the first automated technologies—which eliminated the
jobs mostly held by semiskilled black workers. The trend soon spread to other
northern industries. Between 1957 and 1964, manufacturing output doubled in
the United States while the number of blue-collar workers declined by 3 percent
with the introduction of automation on assembly lines.13 Second, the build-out of
the highway system provided the Big Three automobile companies with a literal
escape route to the new outer-ring suburbs of Detroit, where they built highly
automated factories operated by a more skilled workforce that was eager to
escape the inner city.
Other industries and, particularly, the industries that made up the military-
industrial complex, built their new plants across the southern states. When
foreign auto companies—Honda, Toyota, Nissan, BMW—established their
production facilities in the United States beginning in the 1980s, they, too, were
virtually all located in southern states along interstate highway exits.14 The
southern states had “right-to-work laws” designed to impede or prohibit union
organizing. In the South, global companies found a more complacent white rural
workforce ready to accept low wages and less than enthusiastic about organizing
unions.
The Interstate Highway System connecting the country meant that
companies could locate in anti-union southern states and still have access to
supply chains and distribution routes across the entire country, freeing their
businesses from reliance on the hub-to-hub rail system connecting major
metropolitan regions across the northern and midwestern sections of the country.
Here’s where the other shoe dropped, stranding the now unemployed black
workforce, many of whom could not afford an automobile, in their
neighborhoods. The freeways and Interstate Highway System created a new
form of segregation, not much talked about to this day, except among urban
planners and select academics. Mass transit, a vital means of transportation in
inner cities, was allowed to atrophy across the North at the height of the auto
age. Inner-city trolley systems and public bus systems were often scuttled to
ensure exclusivity for automobile transport. Unemployed, on welfare, without
mobility, and isolated and ghettoized, generations of African American families
became wards of the state. Drug traffic, gang warfare, and the rest followed.

In 1977, my colleague Randy Barber and I began a conversation about the plight
of American workers and small- and medium-sized businesses in the
northeastern and midwestern tiers of the country. We saw close up the
devastation wreaked on African American and white working-class communities
in the inner cities by the mass exodus of companies and whole industries to the
Sunbelt. We also became painfully aware of the dramatic shift in American
commerce from Main Street to Wall Street, as well as the rise of global
companies whose loyalties and ties were no longer restricted to the United States
and whose interests, reach, and engagement now stretched across the world.
We searched for threads that might direct our future efforts to spark a deep
national conversation around building a more open and democratic economy. We
were particularly interested in ideas and themes that could reinvigorate the
small- and medium-sized businesses at the heart of American ingenuity, create
new jobs, and bring vibrant social life back to the inner cities.
Over the years, we had established close ties with local and national labor
leaders who shared our concern about the disempowerment of working people at
the hands of Wall Street. Randy had reached out to many labor leaders and
academics and compiled a wealth of research on a growing phenomenon that had
the potential to transform the economic and political dynamic in America and
around the world. As Randy and I put the pieces together, we began to realize
that a change was taking place in the very nature of capitalism that to date had
gone unnoticed and unseen. Our conversations during those months would bear
fruit in the joint authorship of a book published just a year later with the
poignant title The North Will Rise Again: Pensions, Politics, and Power in the
1980s.
Here is the thesis we laid out in the book. First, the obvious. The sixteen
northeastern and midwestern states were fast being abandoned by the very
industries that made them the economic powerhouse of the world. Second, the
American labor movement was watching its ranks diminish by the day in those
regions as companies and whole industries searched out new opportunities in
states in the South and West governed by anti-union right-to-work laws. This
was no small matter, as 60 percent of all union members lived and worked in the
Northeast and Midwest, while only 15 percent of union workers lived and
worked in the Sunbelt.15
Efforts to unionize workers in the Sunbelt had repeatedly run up against anti-
union sentiment among the largely rural workforce and local political
establishments and chambers of commerce. Success in unionizing southern
companies had been marginal at best. Stymied, organized labor found itself with
little left in its recruiting toolkit.
What to do? We argued that America’s labor union leaders needed to wake
up from a long sleep to a new and potentially powerful and promising reality.
While slumbering, their millions of workers, both in public and private
employment, had part of their weekly wages deferred via collective bargaining
contracts in the form of pension funds, retrievable upon retirement. Nation-
states, provinces, and cities around the world had been following America’s lead,
establishing similar pension-fund accounts for both public employees and
workers in the private sector.
In America, we said,

pension funds are a new form of wealth that has emerged over the
past thirty years to become the largest single pool of private capital
in the world. They are now worth over $500 billion.… Pension
funds at present own 20–25% of the equity in American
corporations and hold 40% of the bonds. Pension funds are now the
largest source of investment capital for the American capitalist
system.… Today, over $200 billion in pension fund capital comes
from the combined deferred savings of 19 million union members
and the public employee funds of the sixteen states that make up
the northeast/midwest corridor.

If this weren’t enough to shake up the labor movement and Wall Street, we
concluded with a scathing indictment of the American labor movement’s
leadership, as well as the leadership of state and local governments across the
northeastern and midwestern tiers of the country.

The unions and the states have, over the years, relinquished control
over this powerful capital pool to the financial establishment. The
banks, in turn, have used these capital assets to shift jobs and
production to the Sunbelt and overseas, thus crippling organized
labor and the northern economies of the United States.16
 In other words, it was the deferred wages of millions of northern unionized
workers that the banks and the financial community used to invest in America’s
major corporations that, in turn, were abandoning their unionized workforces
and relocating in southern right-to-work states. Millions of unionized workers’
savings were being invested in companies whose explicit policies were to
eliminate their very jobs, and nobody seemed to be aware of it.
Randy and I then put the question directly to the states and cities of the
northeastern and midwestern regions of the country and local and national labor
unions: Would they “continue to allow their own capital to be used against
them,” or “would they assert direct control over these funds in order to save their
jobs and their communities”?17
Although the question we posed was more pragmatic and strategic, behind it
was an ideological question that has plagued capitalism since Adam Smith
penned The Wealth of Nations in 1776. We asked, “Who should control the
means of production?”18 This question, we observed, was becoming more salient
than ever as the financial community and global companies were using the
deferred savings of union workers in the form of pension capital to relocate, not
only to the Sunbelt but also beyond, setting up operations around the world,
beggaring workforces in country after country, pitting workers and communities
against each other to enlist the cheapest labor available and locating in
communities where they could depend on lax or nonexistent environmental
standards and few, if any, checks on the working conditions in their factories.
The reaction to the book was immediate. Tens of thousands of local and
national labor leaders and rank-and-file union workers read it, as did leaders in
the financial community and executives in Fortune 500 companies, all of whom
had a stake in the struggle to control this gigantic pool of capital. While the book
has been cited and credited over the past forty years with helping spark the
movement for socially responsible investment (SRI), it’s fair to ask whether
nation-states, cities, and labor unions around the world have moved effectively
to seize control of the trillions of dollars in pension funds whose investments
dictate the direction of markets in the capitalist system.19 Or have the efforts
been more incremental and around the edges, chipping away bits and pieces of
the power and securing small concessions without capturing the social capital
itself?
In 1998, twenty years after the book was published, Richard Trumka, then
secretary treasurer of the AFL-CIO (and now its president), convened a meeting
of the nation’s trade unions’ secretary treasurers in Las Vegas and invited Randy
and me to assess progress made. We were polite but not effusive. I should hasten
to add that Trumka is one of the most vocal advocates of the themes we raised in
the book, remarking that “there is no more important strategy for the labor
movement than harnessing our pension funds and developing capital strategies
so we can stop our money from cutting our throats.”20
One of the more measured and tightly reasoned analyses and critiques of the
successes and failures that dogged our thesis and call to action came from
Richard Marens, an assistant professor of organizational behavior and
environment at California State University, in an article titled “Waiting for the
North to Rise: Revisiting Barber and Rifkin After a Generation of Union
Financial Activism in the U.S.,” published in the Journal of Business Ethics in
2004. Marens wrote:

A generation ago, two community activists, Randy Barber and

Jeremy Rifkin, urged a new direction for the American labor
movement in The North Will Rise Again (1978). Their book was a
response to political and organizing setbacks that Labor had
experienced in the 1970s: a 20-year decline in its share of the
workforce and a demoralizing defeat of a concerted effort to reform
labor law. They identified a positive counter-trend in the rapidly
accumulating wealth of public and union-controlled pension plans.
The job for labor was to learn how to wield this capital, both as a
tool for generating investment in new union jobs and as a weapon
in the fight against recalcitrant corporate management.21

Marens went on to say that many American unions and their leaders
embraced our analysis and vision and within a decade were working side by side
with newly formed SRI organizations “routinely involved in various forms of
financial activism and, after another decade, investment activists working for
unions could point to a long list of innovations and apparent
accomplishments.”22 Shareholder resolutions multiplied on topics previously
hidden behind closed doors in corporate suites, forcing changes in management
practices.
Some of those shareholder resolutions opposed outrageous executive
compensation while workers were summarily let go and wages remained
stagnant; others focused the spotlight on Dickensian sweatshop conditions,
mostly in Asia, sullying the public image of the companies and undermining
shareholder value.
Still, Marens concluded in a 2007 article that while public and private
pension funds became key players in advancing socially responsible investment
and shareholder value, institutionalizing this new watchdog role in the oversight
of corporate America, “labor’s shareholder activism … is likely to remain a
tactical weapon, albeit an intriguing and potentially useful one, for skirmishing
with corporate management and publicizing grievances.”23 As for our vision of
the workers of the world taking responsibility for how the pool of global pension
capital will be invested on behalf of their workplaces, communities, and
families, Marens suggested that the evidence, at least in 2007, was that it was
unlikely. At best, he faintly hinted that the jury was still out. No longer.

Theory to Practice: The Revolution Begins

This time, it’s the public pension funds of cities, states, and nations that are
leading the charge, moving beyond shareholder resolutions to controlling and
directing their vast investments in the decarbonization of their economies. A
global movement has taken root as governments and public employee unions
have begun divesting their public pensions from fossil fuels and related
industries and reinvesting them in renewable energies, green technologies, and
energy efficiency initiatives.
In the United States, the revolution began at colleges and universities, with
students petitioning the schools’ boards of trustees to “divest and invest.” Bill
McKibben, the head of 350.org, one of the nation’s leading environmental
activist organizations, played a central role in helping scale the movement. At
first, only a few small, scattered municipalities—mostly college towns—made
the shift in their pension fund investments. It was more a symbolic gesture. It
wasn’t long, however, before the investment trickle became a stream, and it is
now on the verge of becoming a deluge. Bigger cities have come forward and
joined all over the world—Washington, DC, Copenhagen, Melbourne, Paris, San
Francisco, Sydney, Seattle, Stockholm, Minneapolis, Berlin, and Cape Town, to
name just a few. Today, 150 cities and regions across every continent have taken
steps to divest their public pension funds from the old fossil fuel energies and
reinvest in renewable energies, electric vehicles, and zero-emission building
retrofits that make up a Third Industrial Revolution infrastructure.24
The turning point came in 2018 when both New York City and London
brought their influence to the table. On January 10, Mayor Bill de Blasio and
trustees of the public pension funds of New York City announced their decision
to fully divest from fossil fuels by 2023 and in a single stroke positioned
America’s lead city as the flagship in a worldwide transition into a Green New
Deal society. New York City’s public employee pension funds represent 715,000
members, retirees, and their beneficiaries, and together their funds amount to
$194 billion.25 The mayor made clear in a press conference that the decision to
divest was both a moral one and a financial one. His message was unsparing. He
told his fellow New Yorkers that

New York City is standing up for future generations by becoming

the first major U.S. city to divest our pension funds from fossil
fuels. At the same time, we are bringing the fight against climate
change straight to the fossil fuel companies that knew about its
effects and intentionally misled the public to protect their profits.26

De Blasio went on to remind New Yorkers and the rest of America of the
damage New York City experienced when Hurricane Sandy hit the five boroughs
head-on in October 2012, leaving forty-four deaths in its wake and more than
$19 billion in damage to property and infrastructure and in lost economic
activity.27 People around the world watched in horror as live TV coverage
showed torrents of water washing over roadways, smashing through windows
into department stores, and racing down into the subways. New York is one of
the world-class cities most in harm’s way as seawaters rise and storms and
hurricanes gain in intensity and frequency, and its citizens are beginning to ask if
parts of their city will be permanently submerged by the second half of the
century.28
The loss of life and property as the city moves deeper into the century could
be incalculable. The decision to divest, said the mayor, was equally an economic
consideration to ensure the city’s economic stability and future. The mayor’s
office estimated that 3 percent of its portfolio, totaling approximately $5 billion,
was invested in fossil fuels and that those divested funds would need to be
distributed across the city’s pension investments, with a priority on finding
opportunities to invest in renewable energy, retrofitting of building stock, and
green infrastructure.29
The divestment is part of a broader decarbonization plan called One New
York: The Plan for a Strong and Just City. The goal is an 80 percent reduction in
greenhouse gas emissions by 2050, compared to 2005 levels, putting the city in
sync with the Paris climate agreement.30
Sadiq Khan, the mayor of London, similarly announced plans to divest
£700,000 ($903,000) in public pension funds still invested in carbon-based
energies. The mayor said that the city’s pension portfolio’s last tie to the fossil
fuel industry would be quickly severed, making it entirely free of fossil fuel
investments. The city has also launched the Mayor’s Energy Efficiency Fund,
investing £500 million ($645 million) in greening the city’s social housing,
universities, libraries, hospitals, and museums.31
In a jointly authored opinion piece in The Guardian, the two mayors said,
“We believe that ending institutional investments in companies that extract fossil
fuels and contribute directly to climate change can help to send a powerful
message that renewables and low-carbon options are the future.”32
Just after the editorial appeared, Jerry Brown, the governor of California,
signed into law a bill requiring that the state’s two largest public pension fund
managers, overseeing the California Public Employees’ Retirement System
(CalPERS) and the California State Teachers’ Retirement System (CalSTRS),
“identify climate risks in their portfolios and report on that risk to the public and
the legislature every three years.”33 The first of its kind passed by a US state
legislature, the law not only establishes a statutory definition of climate-related
financial risks but also defines the legal responsibilities that the state’s public
pension plans need to adhere to in their investment decisions while also ensuring
that their investment choices align with the state’s other legislative requirements
on climate change. It’s worth briefly reviewing a few select passages, as they
provide a boilerplate for reassessing and understanding fiduciary responsibility
for states and municipalities across America, and even other countries, as
governments administering public pension funds take hold of the financing of a
Green New Deal and transition from a fossil fuel civilization to a postcarbon
green era.
The new law states unequivocally that “climate change presents an array of
material financial risks, including transition risk, physical risk, and litigation
risk, that reasonable investors must take into account when making investment
decisions.” The law also warns that “failure to acknowledge and address these
risks will result in exposure to subsequent liabilities and financial risk,” and
given the fact that climate change occurs over time, investment decisions must
“consider both short-term and long-term effects and risks of retirement fund
investments.”34
The law concludes on a tough note designed to make clear to the trustees of
these two powerful investment funds that their investment decisions can no
longer simply be tied to short-term market returns, especially if those
investments are in enterprises or endeavors that by their very nature contribute to
climate change: “Given the potentially catastrophic consequences of climate
change, the documented social and economic cost of carbon, and the emerging
body of literature on the material financial risks of climate change, retirement
boards simply cannot disregard financial climate risks.”35
We need to hit the pause button and grasp the significance of this new law.
CalSTRS is the largest education-only public pension fund in the world, with
950,000 members and beneficiaries, and manages financial assets totaling nearly
$224 billion.36 CalPERS is the largest pension fund in the United States, with 1.9
million public employees, retirees, and families, and it oversees financial assets
totaling $349 billion.37 Together, these two mega-giants control over $573 billion
in assets, or more than half a trillion dollars invested on behalf of almost 3
million public employees, retirees, and their beneficiaries.
This law fine-tunes the fiduciary principle that guides public pension fund
investments, helping asset managers better appreciate what it means to maximize
the financial returns of members. The rather sophomoric understanding of the
“prudent man rule” that has guided pension fund trustees for well over seventy
years, in which the only criterion is a return on investments, fails to take into
consideration how such investments, though they might well appear to be
prudent at the moment they are made, could also trigger negative effects on other
investments, with a boomerang effect that undermines the long-term
maximization of the members’ overall investment portfolio.
For example, take investments in fossil fuel energy companies and electric
utilities whose contributions to global warming emissions exacerbate drought
conditions in California and trigger wildfires that down power lines, creating
power shortages and brownouts, destroy property, and disrupt commerce,
potentially undermining the funds’ investments in other California companies
impacted by the disruptions and losses. These multiplying effects are not
theoretical but very real. PG&E, a Fortune 500 electric utility in California, filed
for bankruptcy in 2019 when California officials announced that the company’s
equipment caused at least seventeen of the twenty-one major wildfires in the
state in 2017.38
And this is the very point Randy Barber and I made in The North Will Rise
Again when we stated that every pension fund investment decision, regardless of
its short-term return, has consequences that need to be considered, because those
consequences could undermine the mid-term and long-term economic well-being
of the workers whose funds are being invested. Recall, we had charged that in
the past banks had invested the public and private pension funds of workers
living in northeastern and midwestern states in companies fleeing those states to
right-to-work states in the Sunbelt or Asian nations that have lower labor costs.
This happened continuously from the 1960s to the 1990s, impoverishing
millions of working people and their families, their communities, and their
states. There is likely not a single worker alive today who would think in
hindsight that those investments made by the trustees of the funds were
“prudent,” even though they showed decent returns. Investments today in
companies and industries most responsible for emitting global warming gases
are of a similar ilk. Prudent investments? Difficult to justify!
Lest there be any remaining doubt about the fundamental change taking
place in how public and private pension fund assets are invested and assessed,
the UK government—the world’s fifth-largest economy in 2018—put the issue
of what constitutes a “prudent” investment to the test in June 2018.39 The UK
government’s Department for Work and Pensions (DWP) issued new regulations
around the same time that California did. The regulations govern how future
investments of public pensions are to be evaluated in the oversight of the
nation’s £1.5 trillion in pension assets.40 And as in California, the issue centered
on deepening the understanding of what is entailed in exercising fiduciary
responsibility.
In issuing the new guidelines, Esther McVey, the secretary of state for the
DWP, left aside legalities and coded references to speak directly to the British
people, and especially the youth. She noted that “as we see the younger
generation care more about where their money is going, they are also
increasingly questioning that their pensions are invested in a way that aligns with
their values. This money can now be used to build a more sustainable, fairer, and
more equal society for future generations.”41 The regulations include a warning
to pension fund trustees to “include climate change as a specific item because it
is a systemic and cross-cutting risk … it affects not only environmental risks and
opportunities, but also social and governance considerations … [adding that] the
UK’s commitment to the Paris Agreement on Climate Change demonstrates the
Government’s view that climate change represents a significant concern.”42
Some might read these recommendations and conclude that Big Government
is merely flexing its regulatory muscle to impose its own ideological will on
pension fund trustees and millions of public employees; in fact, the opposite is
the case. In many instances, it’s the public employee unions that are pressuring
the governments to come to the table.
UNISON is the UK’s largest union, with 1.3 million members working in
both the public and private sectors in local government, education, the National
Health Service, and the energy field. Having discovered that local governments
across the UK had £16 billion ($20.6 billion) invested in the fossil fuel industry,
UNISON made the decision at its national convention to mobilize its nationwide
members in a campaign to press local governments to divest fossil fuels from
their pension fund portfolios and reinvest in green energies and other socially
responsible investments. UNISON’s general secretary, Dave Prentis, said in an
open letter to the membership that “as the law stands, a decision to divest, taken
for financial reasons—such as a view that the assets of BP, Shell, etc., will
become ‘stranded’ in the ground and therefore worthless is an acceptable reason
for a fund to do so.”43
In July 2018, Ireland became the first country to announce that it will divest
“all” public pension funds from fossil fuel companies within five years. The
Irish Parliament passed a bill forcing the Ireland Strategic Investment Fund,
which oversees the investment of €8.9 billion ($10.4 billion) of government
funds, to divest the estimated €318 million the country is investing in the global
fossil fuel industry.44
Just eight months later, in March 2019, Norway sent tremors across the
financial community when its government announced a recommendation that its
sovereign wealth fund divest from all upstream oil and gas producers. Norway is
Western Europe’s biggest producer of petroleum, and its sovereign wealth fund
is the largest in the world.45 The message was clear: Norway is beginning to get
out!
In countries where national governments have either turned a deaf ear or
dragged their heels on establishing protocols for divesting from fossil fuels,
public employee unions have taken on the mission of unilaterally announcing
divestment of their members’ pension funds. In South Korea, the eleventh-largest
economy in 2018, 46 percent of electricity is still powered by coal.46 Frustrated
by the government’s intransigence, the Teachers’ Pension and the Government
Employees Pension System, with a combined $22 billion in assets under
management, announced they would “commit to stop investing in new coal
projects” and reinvest the funds being withdrawn from coal projects in
renewable energies, hoping it would steer similar commitments by other
investment bodies and action at the national government level to divest.47
 While localities, regions, and national governments and their public pension
funds are quickly coming onboard by divesting from the fossil fuel industry and
reinvesting in green energies, some of the world’s leading insurance companies
are not far behind, and for good reason. Eighteen insurers, mostly in Europe,
with assets of at least $10 billion each, have already begun to divest from the
fossil fuel industry. Several of the biggest insurers—AXA, Munich Re, Swiss
Re, Allianz, and Zurich—have either limited or eliminated insuring coal
projects. AXA and Swiss RE have also limited underwriting tar sands projects.48
Yet, only two of the ten largest American insurance companies—AIG and
Farmers—have modified their investment strategies in response to climate
change, which is remarkable considering the US West Coast has been devastated
by climate change–induced droughts and wildfires for years, with $12.9 billion
in insured losses in 2017 alone.49 Texas and the southeastern states of Louisiana,
Florida, Mississippi, Georgia, South and North Carolina, and Virginia have been
ravaged by hurricanes, and the midwestern states of Nebraska, Iowa, Wisconsin,
and Missouri have experienced ever-worsening 1,000-year historic floods yearly,
all brought on by climate change in just the past decade, with loss of lives and
property damage. I suspect, however, that the reality of the impacts of climate
change will draw American insurance companies into the divest-invest fold over
the course of the next two to three years.
The pushback by trustees of public and private pension funds who remain
reluctant to divest from the fossil fuel industry and industries connected to it
generally centers around not wanting to compromise returns on investment to
satisfy demands for “socially responsible investments” that, while noble in
purpose, generally perform less well in the marketplace. This argument is often
wrapped around a warning about the long-term underfunded liability of pension
funds around the world, suggesting that the last thing trustees want to do is
invest in socially responsible funds whose returns are low, further depleting the
benefits owed to the workers.
It is true that pension funds have been traditionally underfunded, but, as
suggested earlier, this is because to some extent banks and other institutions have
notoriously used them as a captive pool to invest in poor-performing stocks to
shore up their own balance sheets.
Both public and private pension funds in America were woefully
underfunded in recent years, for the most part because of the damage the Great
Recession wreaked on the entirety of investments between 2008 and 2012 before
the economy began its recovery. Pension fund coffers have been filling up in
recent years in the overheated bull markets, but here again we need to strike a
note of caution. At midyear 2018, the average stock trading on the S&P 500 was
73 percent above its average valuation. Looking back at the history of the stock
market, only two times were stocks more overvalued—just prior to the Great
Depression in 1929, and in the run-up to the now-infamous dot-com bust in
2000.50
According to Pew Trusts research, state pension liabilities are 72 percent
funded (some analysts think that figure is generous). If the market were to
plunge into bear territory, given that stocks are wildly overvalued on the
exchanges, the underfunded liability of pension funds would suffer, but so too
would every other investment vehicle.51
Where the argument against pension funds divesting from fossil fuels goes
completely off track is the sobering reality that oil and gas stocks enjoy the
dubious distinction of being one of the worst-performing sectors of the S&P 500
—certainly not a good argument for continuing to invest in fossil fuels.52
When we get more granular, the numbers become even more revealing. In
2016, Corporate Knights analyzed returns on investments of the New York State
Common Retirement Fund, the nation’s third-largest pension fund, with $185
billion held in trust for its 1.1 million members. Had the fund divested from its
fossil fuels portfolio, its returns over a three-year period would have increased
by $5.3 billion, with each pensioner $4,500 richer.53 Enough said.

We need to grasp the full implications of the imminent collapse of the fossil fuel
civilization. Environmentalists and social justice activists have for decades been
fighting the economic power that the fossil fuel culture has wielded over the
global marketplace, the governance of society, and our very way of life. In recent
years, we have become more and more terrified over the toll that the fossil fuel
sector and related industries have taken, bringing us to the precipice of runaway
climate change and an extinction event.
Where things stand now was a long time coming. In October 1973, the
Organization of the Petroleum Exporting Countries (OPEC) slapped an embargo
on oil delivered to the United States. Within weeks, the price of gas skyrocketed
from $3 to $11.65 per gallon at the pump, with long lines of automobiles
stretching for blocks around their local filling stations with drivers desperately
waiting their turn for the privilege of pumping a few gallons of gas into their
vehicles.
This was the moment that the public, for the first time, felt the heavy hand of
the oil giants, accusing them of being complicit with the OPEC nations by taking
advantage of the embargo and spiking the price of gasoline to ensure record
profits off the crisis. The public’s anger was boiling over in neighborhoods
across America.
With the 200th anniversary of the Boston Tea Party just weeks away, the
comparison between the East India Company of two centuries ago and the big
oil companies of today struck a chord. My organization, the People’s
Bicentennial Commission, which was established a year earlier to provide an
alternative to the federal government’s celebration of America’s 200th birthday
in 1976, reached out to local community activists in Boston and New England
with a call to protest the giant oil companies. Over 20,000 Bostonians joined us
in a blizzard, tracing the steps of the first Tea Partiers from historic Faneuil Hall
down to the Boston wharf, where a replica of the original East India ship was
docked and the mayor and national officials were huddled to open the
ceremonies. Local fishermen from Gloucester sailed up into Boston Harbor and
docked alongside the replica ship and climbed the masts, dumping empty oil
drums into the harbor while thousands of protesters chanted “Impeach Exxon”
and “Dirty oil, polluted world,” initiating what The New York Times would call
the “Boston Oil Party of 1973” in the next day’s edition. This was the first
protest in America against the giant oil companies, to our knowledge, but it
would be far from the last.
After forty years of protests against Big Oil all over the world, suddenly the
tables have turned. The fossil fuel sector, once seemingly invincible, is quickly
collapsing before us. It’s happening at a speed and on a scale that we could
barely have imagined just a few years ago. While we will have to remain vigilant
in taking on the oil industry, we will also have to quickly begin building a green
culture from the ashes. We need to finance a transition into a zero-carbon
economy and mobilize governmental response in every community and region to
take us into an ecological era. We need a Green New Deal in America and
around the world.
 6

THE ECONOMIC TRANSFORMATION

The New Social Capitalism

The dramatic move on the part of public and private pension funds to pull
billions of dollars of their investments from the fossil fuel sector and related
industries and reinvest them in the smart green economy marks the coming of
age of social capitalism. Socially responsible investment has migrated from the
margins of investment decisions to the very core of market activity, providing
the groundswell for the most fundamental of transitions—the exit strategy to
leave the fossil fuel civilization behind.

Socially Responsible Investment Takes Center Stage

What has precipitated this leap in socially responsible investment from the
periphery to the center of capitalist investments? The bottom line! Although the
notion of socially responsible investment first emerged with the worldwide
movement to rethink investments and divestments in industries in apartheid-era
South Africa, it came home to America in the late 1970s in a more generic way,
with the opening up of a conversation around worker-owned pension funds being
used to undermine the workers’ economic security and the well-being of their
communities. Proponents of the SRI concept argued that it needed to be factored
into the equation in evaluating how retirement benefits were being invested.
Milton Friedman, the late Nobel laureate economist who presided over
what’s referred to as the “University of Chicago Neoliberal School of
Economics,” shot back, arguing that any notion of exercising social
responsibility in how pension funds should be invested would ultimately
undermine the performance of capitalist markets, with Big Government
subjecting the flow of capitalist investments to ideological constraints. The
Friedman position laid down a dictum that was followed religiously by most
pension fund trustees in the management of the growing pool of workers’ social
capital in the ensuing decades.
On the surface, Friedman’s dictum seemed to hold sway, at least through the
early years of the new millennium. Under the surface, however, younger
generations of baby boomers, Generation Xers, and millennials pushed for
measuring investments by their environmental, social, and governance practices
(ESG) in shareholder battles and in the administration of workers’ pension fund
investments.
A new phrase entered into the public dialogue around economic investments:
“doing well by doing good,” a line borrowed from Benjamin Franklin. The idea
was that there need not be, nor should there be, a sharp division between morally
and socially good business practices and the bottom line. Rather, it was argued
that this was a false dichotomy—that in reality, doing well by doing good
enhances the bottom line.
With this counternarrative, unions and NGOs continued to put forth
shareholder resolutions at companies’ annual meetings to factor SRI into their
practices. Their successes led to socially responsible investments accelerating
after the dot-com bust in 2000, at the hands of a younger generation that was not
shy about shaming morally irresponsible and unacceptable corporate behavior,
often using social media and reputation sites to embarrass, prod, and enforce
changes in corporate practices.
Today, SRI has gone mainstream. According to a report prepared by Morgan
Stanley, 86 percent of millennials are interested in socially responsible investing,
differentiating their cohort from its elders.1 Reflecting this emerging shift, SRI in
the United States has topped $12 trillion, much of it proffered by pension fund
trustees.2 Although SRIs run the gamut and can be found across every industry
and sector, the deepening concerns over climate change, the environment, carbon
footprint, and the geopolitical influence of Big Oil have catapulted divestments
out of the fossil fuel industry and into reinvestments in renewable energies and
green industries.
The new thrust has given rise to “impact investing,” providing seed money to
businesses that embed ESG into every aspect of their operations. In surveys
conducted across the asset market sector, Morgan Stanley repeatedly heard from
interviewees who expressed their strong conviction that the very nature of
investment decisions is at an inflection point in the industry due to a shift in the
kind of investments clients demand. “Doing well by doing good” has become the
new mantra.
Is the enthusiasm justified? A spate of in-depth studies over the past two
years, including studies prepared by Harvard University, the University of
Rotterdam, and Arabesque Partners and Oxford University, show that companies
with a strong ESG presence across their value chains tend to outperform their
competitors, in part due to their commitment to greater aggregate efficiencies,
less waste, circularity built into their supply chains, and a low carbon footprint,
all of which increase their bottom line profit, and each of which is tied to their
shift away from a fossil fuel civilization and into a green era.3 Rather obvious.
Every aspect of the economy is made out of or moved by fossil fuels. They
have been the lifeblood of the First and Second Industrial Revolution
infrastructures that make possible every economic and commercial endeavor.
Without this carbon infrastructure, businesses and, for that matter, society as a
whole, could not exist. The point is, the fossil fuel infrastructure has been, up to
now, the foundation of society’s prosperity and well-being.
Given that fossil fuels are the lifeblood of the current global economy, does
anyone anywhere believe that we are in the sunrise or even the crest or plateau
of the fossil fuel era? And what then of the infrastructure that underlies a fossil
fuel culture? Can anyone claim that the infrastructure is still robust? Clearly, this
period of history is closing.
Infrastructures are like living organisms. They are born, grow, mature, and
begin a long period of decline, eventually ending in death, which is exactly what
is happening with the carbon-based Second Industrial Revolution. Fortunately, a
digitally interconnected postcarbon Third Industrial Revolution infrastructure,
which is at the heart of a Green New Deal, is ascending, along with new
aggregate efficiencies, higher productivity, and a dramatic reduction in carbon
footprint. In turn, new businesses and workforces will be required to build out
the green economy and manage it in the twenty-first century.
As to whether low-carbon investments might indeed be socially responsible
but financially poor investments, S&P Dow Jones analyzed index exposure to
carbon risks for a number of versions of the S&P 500 Index and concluded that
“the low-carbon versions actually outperformed the benchmark over the five-
year period in most cases.”4
We saw in chapters 2 and 3 that the key sectors that make up the Second
Industrial Revolution infrastructure are each decoupling from a fossil fuel
civilization—ICT/telecommunication, electricity, transportation and logistics,
and the building stock—and recoupling with the incipient Green New Deal
Third Industrial Revolution infrastructure around the world. If trustees of
pension funds are looking to maximize the lifetime financial interests of their
pensioners and their beneficiaries, it would be difficult to conceive how this
might be done by locking investments into a dying Second Industrial Revolution
infrastructure with its stranded assets and declining business models.
The Green New Deal is all about infrastructure: Broadband, Big Data and
digital communication, near-zero marginal cost, zero-emission green electricity,
autonomous electric vehicles on smart roads powered by renewable energy, and
nodally connected zero-emission positive power buildings, the linchpins of a
Green New Deal infrastructure, are going to have to be built out and scaled up in
each region and connected across every region, enveloping landmasses around
the world. This infrastructure transition will have to move quickly and be at least
partially in place in the coming years if we are to hold the increase of
temperature on Earth to 1.5°C or below.

How Much Will It Cost?

How much investment are we talking about to mend parts of the Second
Industrial Revolution and decommission other parts that move into the stranded
assets column? And how much investment will we need to spend on the smart
new zero-emission Third Industrial Revolution infrastructure? Oxford
Economics reports that the nations of the world will need to increase the
proportion of GDP to infrastructure from the 3 percent per year expected under
current trends to 3.5 percent per annum—certainly doable.5
Some countries are stepping up quickly while others are crawling woefully
behind. McKinsey reports that the United States ranks an embarrassing twelfth
on the list, having invested only 2.3 percent of GDP on infrastructure from 2010
to 2015, and its ratio of investment to GDP continues to fall with each passing
year.6
At least the public around the world seems to understand the importance of
infrastructure to the general well-being, with 73 percent of respondents in a
recent international survey saying that “investing in infrastructure is vital to
[their country’s] future economic growth” and 59 percent saying that they “do
not believe enough is being done to meet their country’s infrastructure needs.”7
Now, the United States may be on the verge of catching up. Infrastructure
spending has risen from near invisibility in political circles to become a
controversial red-hot public issue with the growing realization that the nation’s
crumbling infrastructure is now at a breaking point, costing the American
economy literally hundreds of billions of dollars in losses, and becoming a
matter of national security. The problem is compounded by the damage inflicted
by climate-related disasters on already weakened infrastructure.
President Trump is championing a $1.5 trillion infrastructure rollout over ten
years—mainly to mend the aged twentieth-century Second Industrial Revolution
infrastructure. All is not as it seems. The White House is offering up only $200
billion in federal financing, mostly in the form of tax credits, with the bulk of the
financing to come from the states.8 The Democrats are calling for a $1 trillion
infrastructure package financed by the federal government, which would include
mending the Second Industrial Revolution infrastructure and overlaying the
build-out of a smart digital green Third Industrial Revolution infrastructure that
can take the country into a zero-emission society and address climate change.9
In reality, the Trump plan is paltry but not a radical departure from the
federal government’s share of financing the country’s infrastructure, which in
recent years has averaged around 25 percent of the total cost, with the rest of the
infrastructure commitment left to the states. Moreover, the federal tax breaks the
president is promoting are more in line with what the government customarily
does to assist the states and stimulate market forces that accompany
infrastructure-related projects. But, unfortunately, the tax breaks the White
House has in mind are almost universally connected to bolstering the antiquated
fossil fuel infrastructure, much of which is quickly becoming stranded assets.
The wiser course of action would be for the federal government to provide tax
credits, tax deductions, tax penalties, grants, and low-interest loans to encourage
a Green New Deal transition and let both the marketplace and the states use the
incentives to quickly speed the transition from a fossil fuel civilization to a zero-
carbon emission society.
However, the federal government should take a significant responsibility,
along with the states, for financing some of the build-out of the national power
grid, which will serve as the backbone of the Third Industrial Revolution
infrastructure. There is precedent for this. The backbone of the Second Industrial
Revolution infrastructure was the Eisenhower-era National Interstate and
Defense Highways Act of 1956. This public works project connected the
country, created the suburbs, and established a totally integrated mobility and
logistics infrastructure across America. The infrastructure cost the federal
government an estimated $425 billion (in 2006 dollars) to lay out thousands of
miles of roads over a period of thirty-seven years.10 The federal government
covered 90 percent of the financing, paid for by a slight increase in the gasoline
tax, and the states covered the remaining 10 percent of the bill.11 The smart
national power grid in the twenty-first century, providing seamless digital
interconnectivity to enable the sharing of electricity from renewable energy
sources across every region of the country, is analogous to the build-out of the
Interstate Highway System, which provided a seamless interconnectivity for
mobility across the country in the twentieth century.
Or taking the analogy one step further, KEMA, a former leading European
energy, electricity, and engineering consultancy, made the point years ago that
the “smart grid is to the electric energy sector what the Internet was to the
communications sector and should be viewed and supported on that basis.”12
There is another parallel between the Third Industrial Revolution’s smart
digital infrastructure and the Interstate Highway System. President Dwight D.
Eisenhower was keen on erecting a vast interstate highway system, in part
because of his own personal experience in the military. In 1919, when he was a
young colonel in the army, he participated in a motor convoy across the
continental United States on the historic Lincoln Highway—at that time the first
road across America. The journey was designed to focus attention on improving
America’s highways and took over two months to complete. Later, in an
autobiography, he quipped that “the trip had been difficult, tiring, and fun,” but
the memory of all the delays across the country stayed with him during his
military career. In World War II, General Eisenhower pondered his earlier
experience after observing the German Autobahn—at that time the world’s only
national highway system—and later remarked that “the old convoy had started
me thinking about good, two-lane highways, but Germany had made me see the
wisdom of broader ribbons across the land.”13
When Eisenhower became president in 1953, he already had in mind “the
grand plan” for an interstate highway system connecting all of the American
economy and society. Defense and security issues were a constant companion.
He was particularly concerned about the possible mass-evacuation of urban
populations in the event of a nuclear attack and the need to move military
equipment, where needed, in the case of an invasion, and saw an interstate
highway system as critical to national security and defense. This was not the
only reason for engaging in an interstate mobility infrastructure project. In his
speech to the National Governors Association in 1954, the president listed a
number of other objectives, including public safety on the roads, easing traffic
congestion, and improving logistics in the production and distribution of goods
and services. However, in his speech to the governors, he again emphasized that
defense issues were also a priority and warned the elected officials of “the
appalling inadequacies to meet the demands of catastrophe or defense should an
atomic war come.” The final piece of legislation was called the Federal Aid
Highway Act of 1956, but is popularly known as the National Interstate and
Defense Highways Act.
Like the Interstate Highway System, the emerging smart national power grid
is digitally connecting the American economy and society and increasing the
nation’s efficiency, productivity, and economic well-being, and, when finished,
will also address security concerns that, at least in part, gave rise to the Interstate
Highway System. In the 1950s, the threat was nuclear war. Today, the threat is
cyber war. On the upside, the smart national power grid is managing an ever
more diverse and complex energy infrastructure made up of literally millions of
players in dense relationships on ever-shifting platforms. Yet, the very
complexity of the current system makes it increasingly vulnerable to
cyberattacks. Nor is this merely a theoretical issue. The nation’s power grid and
electricity system has already been hacked by agents of foreign countries, and
there is growing concern that hostile powers as well as rogue terrorist groups are
turning their attention to disabling our large electricity transformers, high-
voltage transmission lines, electricity generation plants, and electricity
distribution systems. If electricity were to be disabled across an entire region or
the whole country over weeks and even months, the economy would collapse,
society would crumble, and government would be virtually inoperable at every
level.
This prospect keeps elected officials, the military, and the business
community up at night wondering if and when a cyberattack might occur,
knowing that we are wholly unprepared at this point in time across the entire
national electricity grid. Hurried discussions are now occurring at the local, state,
and federal levels and within the power and electricity industry on how to
quickly harden every aspect of the emerging national smart grid, from the large
power transformers and long-distance high-voltage transmission lines to the final
distribution of electricity to end users. There is at a minimum an agreement on
one factor—that is, the key to cybersecurity rests in deepening resiliency and,
that, in turn, requires an expansion of distributed power in every community.
The installation of microgrids will be our nation’s frontline insurance. Were a
cyberattack to happen anywhere in the country, homeowners, businesses, and
entire communities would be able to quickly go off-grid, reaggregate, and share
electricity neighborhood to neighborhood, which would allow society to
continue functioning. It would be difficult for anyone to argue that the threat of
cyber warfare against the nation’s power and electricity grid is any less a
national security issue.
Just as the ever-present threat of a cyberattack demands continuous
vigilance, so too does the threat of catastrophic climate events that are escalating
exponentially across the country, resulting in tens of billions of dollars in
damage to local ecosystems and loss of property, human life, and commerce.
Cyberattacks and climate disasters are both going to escalate in the years ahead,
making the questions of both cybersecurity and climate resilience the highest
priority national security issues facing the country.
With the interstate highway precedent in mind, let’s run the numbers to get a
tentative sketch of the areas that need to be funded to lay down a smart, zero-
emission Green New Deal infrastructure to address climate change and
transform the American economy and society. How much funding is each area
likely to need, and how will the costs be divided between the federal government
and the states? It is interesting to note that the $476 billion price tag that the
Electric Power Research Institute projected for building the national smart grid
is nearly identical to the cost of the interstate highways, and it, too, is projected
to result in economic benefits far beyond its cost.14 Over the initial ten-year
build-out of the national power grid, the federal government would only have to
invest approximately $50 billion per year.
The ten-year federal government infrastructure commitment should also
include an additional $50 billion a year in the form of tax credits, tax deductions,
grants, and low-interest loans to spur solar and wind installations, the adoption
of electric and fuel-cell vehicles, and other aggregate efficiencies that will take
America’s businesses, workers, and families into the green era. By way of
comparison, in 2016 federal tax preferences in the form of tax credits for
renewable energy were an estimated $10.9 billion, while an estimated $2.7
billion in tax preferences were given over to energy efficiency or electricity
transmission.15 The estimated tax credit for plug-in electric vehicles between
2018 and 2022 is projected at $7.5 billion.16
Federal tax credits and other incentives have been instrumental in
encouraging the installation of solar and wind technology, creating the market
for green energies in the United States. The Solar Energy Investment Tax Credit
allows homeowners to deduct 30 percent of the cost of installation of solar
panels from their taxes. As of 2018, more than five million homes were powered
by solar electricity. Wind power has equally benefited from tax credits, with
enough wind now being captured in America to power 17.5 million homes.
While past tax preferences helped spawn the solar and wind market, increased
energy efficiencies, and the introduction of electric vehicles, to get to scale in a
wholesale transformation into a green energy era, these tax preferences need to
be at least tripled over the next twenty years.
Finally, the federal government should set aside $15 billion per year to
retrofit the nation’s residential, commercial, industrial, and institutional building
stock. A comprehensive study undertaken by the Rockefeller Foundation and
Deutsche Bank estimates that the retrofitting of residential, commercial, and
institutional buildings will cost approximately $279 billion over a ten-year
period. That study was conducted in 2012. It’s likely that today the costs will
exceed $300 billion. Moreover, our global team estimates that the scope and
magnitude of the retrofit is likely to take upward of twenty years to successfully
complete.
The Rockefeller/Deutsche Bank study projected that this critical investment
alone will result in $1 trillion of energy savings over a ten-year period, which is
a savings of 30 percent annually on all the spending on electricity used in the
United States. A nationwide retrofitting of the building stock would also create
3.3 million cumulative job years of employment and reduce the country’s global
warming emissions by 10 percent.17
In total, the federal government’s initial ten-year infrastructure plan would
amount to $115 billion per year: $50 billion per year in the partial financing of
the national power grid; $50 billion per year in tax credits, tax deductions,
grants, low-interest loans, and other incentives to stimulate solar and wind
installations, the purchase of electric vehicles, the installing of charging stations,
and other green components of an emerging Third Industrial Revolution
infrastructure; and $15 billion per year to retrofit the nation’s residential,
commercial, industrial, and institutional building stock to speed the transition
into a zero-carbon emission economy. The total federal budget for the ten-year
infrastructure deployment would ring up at $1.15 trillion. This would give the
country at least a “bare bones” national smart grid and accompanying
infrastructure that is up and functioning. The price tag is not much more than the
Pentagon’s annual budget in 2019 alone.
Can it be done in ten years? The Brattle Group says that “major transmission
projects,” which are the key component of an integrated national power grid,
“require 10 or more years on average for planning, development, approval, and
construction.”18 So yes, it’s possible.
Still, the federal government’s commitment of $115 billion annually over a
ten-year period represents only a partial down payment on what the country will
need to do to transition into a fully operational smart zero-emission green
economy. Significant additional dollars will be required to build out the Third
Industrial Revolution infrastructure. As alluded to earlier, the burden of
financing the transition is going to fall primarily on states, counties, and
municipalities. In all the debate currently swirling in Washington political circles
about the role of the federal government in building out and managing a smart
new national infrastructure, the reality is that the federal government plays a
small role in maintaining the nation’s infrastructure. It’s worth noting that state
and local governments—and not the federal government—own 93 percent of the
country’s infrastructure and pay 75 percent of the cost of maintaining and
improving it.19
Assuming that the Green New Deal infrastructure transition will roughly
follow that same 75/25 state/federal split, this would require a commitment of
around $345 billion per year on the part of the states to match the $115 billion
per year commitment by the federal government, for a combined total of $460
billion per year in infrastructure spending over a ten-year time period. Recall
that the Brattle Group estimates that between 2031 and 2050, an additional $40
billion in new investment annually will be required for just the scale-up in
“transmission investment” for the smart grid to keep up with electricity
demands. Other studies will include additional infrastructure costs in the scale-
up over an extended period of time.
It needs to be reemphasized that the current infrastructure proposals being
debated in Congress have a ten-year timeline. While it would be possible, in the
best-case scenario, to build out a juvenile Third Industrial Revolution
infrastructure within ten years, a mature, integrated, and operational zero-
emission smart green infrastructure will require an additional ten years to be
fully established. What we’re talking about here is a twenty-year generational
transformation into a nationwide Third Industrial Revolution paradigm.
Assuming a continued combined investment by the federal government and
states at the same level for an additional ten years, we are looking at
approximately $9.2 trillion in funding over a twenty-year time period.
Even assuming that the US GDP doesn’t continue to grow but remains
around $20 trillion per year—the GDP for 2018—the total investment comes out
to around an additional 2.3 percent of GDP annually above and beyond the 2.3
percent currently invested in just mending and maintaining the old twentieth-
century infrastructure. That’s 4.6 percent of GDP annually to lay out and deploy
a state-of-the-art, smart, zero-carbon emission digital infrastructure to manage a
twenty-first-century resilient economy. Lest the powers that be blink at a
doubling of our current dismal 2.3 percent of GDP to 4.6 percent annual
spending on infrastructure, it should be noted that the People’s Republic of
China spent an annual average of 8.3 percent of its GDP on infrastructure
between 2010 and 2015.20
These numbers tell us what is likely in store for the United States and how its
position in the world economy will be affected in the coming half-century if its
annual investment in infrastructure remains so far below China’s. What we’re
saying here is that if we want the United States to continue to be among the
leading nations of the world, doubling our annual spending on infrastructure is
reasonable, and the twenty-year timeline to transition into a smart zero-carbon
Third Industrial Revolution economy is possible, but only if all the stars align.
Again, these are estimates in a rapidly changing technological landscape, and are
likely to be continuously revised and updated as the country moves through this
historic infrastructure transition.
This $9.2 trillion projected cost of the smart national power grid and
accompanying infrastructure scale-up over twenty years is slightly lower than
cost projections in some other studies. That’s because the exponential plunge in
the costs of solar and wind energy technology, battery storage, and electric and
fuel-cell transport, plus the accompanying aggregate efficiencies that come with
the Internet of Things built environment, will likely continue unabated over the
twenty-year span, dramatically reducing the overall cost of a nationwide smart
green infrastructure deployment. Then, too, across-the-board tax credits, tax
deductions, grants, low-interest loans and other incentives, as well as graduated
penalties, working alongside falling costs, are likely to accelerate the adoption of
the infrastructure in homes, businesses, and neighborhoods, and across
communities. This has certainly been the history with the introduction of solar
and wind energy technology, and it soon will happen with electric transport.
This is a key point that needs to be emphasized. 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, 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 billions of players around the world to assemble and reassemble, and
disaggregate and reaggregate, their own component parts of it where they live
and work and while they commute, in continuously evolving blockchained
platforms.
Much of the smart infrastructure, then, is going to come online because of
the generous tax credits and other incentives combined with the exponentially
falling cost curve of the infrastructure components and processes. In the Green
New Deal, infrastructure is potentially participatory and democratized and
always metamorphosing into new patterns if overseen by commons governance
rather than private corporate governance in each region. The $9.2 trillion price
tag reflects the way this digital distributed infrastructure is likely to emerge and
evolve in the coming decades.
When all is said and done, let’s not forget that all these infrastructure
improvements will add $3 to the US GDP for every dollar invested and create
millions of new jobs.21

Finding the Money

So, where is the money going to come from to finance a federal and state
government rollout of a $9.2 trillion twenty-year Green New Deal infrastructure
across America? Let’s begin by weighing in at the federal government level.
With a changing of the guard in the US Congress and at the White House, it
might be possible to initiate a higher graduated tax rate for the super-rich, which
America had in the 1950s and ’60s, the period of our country’s greatest growth
and prosperity. That is certainly reasonable and justifiable, especially given the
deepening gulf between the super-rich and an ever-more impoverished American
workforce. According to Mark Mazur, director of the Urban-Brookings Tax
Policy Center, if a marginal tax of 70 percent were imposed on the income of the
super-rich—individuals making $10 million a year or more, and then only after
the first $10 million in income—it would bring in an additional $72 billion in
revenue per year for the federal government.22
Bill Gates, the second-richest individual in the world, worth $90 billion, and
Warren Buffett, the third-richest, worth $84 billion, agree that the super-rich
should be taxed at a far higher rate and have publicly advocated a change in the
laws to address the growing inequality between the super-rich and the rest of the
population.23 In a February 2019 interview with Stephen Colbert on CBS, Gates
was unequivocal on the issue, saying, “I think you can make the tax system take
a much higher portion from people with great wealth,” adding that “these
fortunes were not made from ordinary income, so you probably have to look to
the capital gains rate and the estate tax if you want to create more equity there.”24
Buffett agrees, saying, “The wealthy are definitely undertaxed relative to the
general population.”25
The revenue raised from increasing the tax rate on the super-rich could and
should be used to help fund a Green New Deal to rebuild the economy, which
would create new business opportunities and the mass employment that go with
the green infrastructure shift. Still, this new source of revenue won’t be enough
to get the job done.
We could also redeploy some of the billions of dollars that go into the
Pentagon budget. That, too, seems more than reasonable. The American Society
of Civil Engineers estimates that the United States will need an additional $206
billion a year beyond what we are already spending on infrastructure build-out
just to get the nation up to a passing B grade.26 This seems like a small amount
of money to begin the transition into a smart green Third Industrial Revolution
infrastructure to rebuild the American economy and address climate change—
especially when in 2017 alone, the cumulative damage from climate disasters in
the United States cost $300 billion.27 That’s just for one year!
For those raised voices saying that the US government can’t afford a
significant upgrade in the nation’s infrastructure, consider that the defense
budget for just the year 2019 is $716 billion, one of the largest in US history.28
According to the Congressional Budget Office, funding for weapons systems
takes up about one-third of the budget of the Department of Defense (DoD).29
The United States’ defense budget is larger than the total combined military
budgets of China, Russia, the United Kingdom, France, India, Japan, and Saudi
Arabia.30 Surely there’s something terribly wrong in the way the federal
government is allocating funds to protect “the national security” of the
homeland. We ought to consider reallocating at least a small part of the DoD’s
priorities from ever more costly expenditures on weapons systems we will never
use to the military’s new paramount role in protecting the country against cyber
wars and managing climate-related disaster response and relief missions, which
will increasingly be seen as the most important national security issues facing
our communities and country in the decades to come. An additional $30 billion
could be garnered for the federal government’s contribution to the Green New
Deal by simply cutting 12.6 percent of the overblown and outsized weapons
systems budget of the DoD, which amounts to only approximately 4 percent of
the total military budget for 2019. If we’re not even willing to reprioritize this
tiny fraction of the current DoD budget to secure a resilient smart national power
grid to address cyber war and catastrophic climate events, then we’re putting the
country in deep jeopardy.
Additional federal revenue can come from terminating the nearly $15 billion
in federal subsidies given to the oil, gas, and coal industries each year.31 There is
no longer any justification for subsidizing the fossil fuel sector, whose assets are
quickly becoming stranded.
Just adding up the above numbers, here’s what we get. The federal
government could raise $70 billion per year on new taxes on the super-rich, $30
billion by cutting 12.6 percent of weapons development and procurement, and an
additional $15 billion by ending subsidies for the fossil fuel sector, for a total of
$115 billion in revenue per year available to finance the federal government’s
portion of the transition to a zero-emission green infrastructure.
Of course, this is just one of many potential scenarios for raising the funds
necessary to deploy the federal government’s contribution to a Green New Deal
scale-up over the next two decades. There are many other possible combinations
that could be brought to bear. For example, a small percentage of the proposed
universal carbon tax revenue could be used to help finance both the federal and
the state governments’ contributions to the Green New Deal rollout, with the rest
of the revenue being distributed to American families so that the burden of
carbon taxes remains in the hands of the fossil fuel industry. But the point is this.
All of these numbers are readily actionable without significant compromise to
the vast wealth of the super-rich, Pentagon preparedness, and the financial well-
being of millions of American families.
That said, the other, equally promising place to look for the money, at least in
part, is the trillions of dollars in public and private pension funds that are just
now turning their eye to the vast investment opportunities that accompany a
wholesale transition into a green Third Industrial Revolution. Pension fever is
already in the air in the United States and on the lips of politicians in both
political parties. In February 2019, The Hill, the publication that keeps elected
officials, the federal bureaucracy, and lobbies abreast of happenings across the
government, published an opinion piece by Ingo Walter, professor emeritus of
finance at NYU’s Stern School of Business, and Clive Lipshitz, managing
partner of Tradewind Interstate Advisors, titled “Public Pensions and
Infrastructure: A Match Made in Heaven,” suggesting that the giant national pool
of workers’ public pension funds is sparking a romance with government that
will help finance an upgraded twenty-first-century infrastructure.32 Some of this
financial pool is going to come onboard and invest in the rollout of the national
power grid and in the greening of federal government–owned physical assets.
This is a certainty. Figuring out how to strike the proper balance between the
federal government’s direct funding of the infrastructure shift and financing the
build-out with pension fund capital and other sources of private capital will
likely be the central dynamic that plays out in Congress and the White House
between the Democratic and Republican parties. The deliberation could bring
both political parties together across the aisle to get on with the inevitable
transition into a zero-emission economy.
This “match made in heaven” comes with an important caveat. Any use of
unionized pension funds in green infrastructure investments and related projects
must include unionized workforces in the roll-outs, wherever possible, so that
workers’ pension capital isn’t used, once again, to finance companies that are
anti-union and that consciously eliminate union jobs on their worksites. Since
only 11 percent of the American workforce is currently unionized and there will
be green infrastructure projects that can’t fill workloads with sufficient unionized
workforces, there will need to be at least a guarantee that protects the rights of
workers to organize and collectively bargain, if they so choose.
The matchmaker in the coming together of public and private pension funds
and the green infrastructure build-out is green banks. Their mission is to provide
a percentage of available capital for the express purpose of financing large-scale
build-outs of the Third Industrial Revolution green infrastructure. Over the past
decade, the UK, Japan, Australia, Malaysia, and other countries have created
green banks that have invested in green energy to the tune of $40 billion or
more.33 As early as 2012, the International Trade Union Confederation weighed
in, urging the creation of green banks that could act as clearinghouses to bring
together the vast pool of workers’ global pension funds with green infrastructure
investments.34
In the United States, Chris Van Hollen, then a congressman and now a
senator from Maryland, introduced the Green Bank Act of 2014, the first of its
kind at the federal level. (Chris Murphy of Connecticut introduced its Senate
companion bill.) It authorized an initial $10 billion issue of US Treasury bonds
to capitalize a bank that would provide “loans, loan guarantees, debt
securitization, insurance, portfolio insurance, and other forms of financing
support or risk management” to finance green infrastructure-scale projects and
jump-start the transition into a green infrastructure.35 Van Hollen’s bill was never
enacted into law, but he succeeded in breathing life into the idea of green banks
in America. By 2016, New York, Connecticut, California, Hawaii, Rhode Island,
and Montgomery County, Maryland, all had green banks up and running, and
other jurisdictions were in the process of establishing them.36
Since states are responsible for most of the infrastructure, it became clear
that any federal initiative to institutionalize a national green bank would have to
modify its modus operandi to adjust to the many state green bank initiatives
already well underway. So, when Van Hollen reintroduced legislation calling for
a national green bank in 2016, the new bill did not allow the federal government
to directly finance green infrastructure; rather, it mandated that the US green
bank be restricted to lending funds to state and municipal green banks, who
would then be responsible for directly underwriting green infrastructure
initiatives.37
By 2019, the establishment of green banks had spread around the world. In
March of that year, officials from twenty-three mostly developing countries,
representing 56 percent of the world’s population and accounting for 26 percent
of global GDP and 43 percent of global CO2 emissions, held a Green Bank
Design Summit in Paris with the purpose of establishing their own green banks.38
Institutional investors were at the table, and pension funds and other investment
funds were ready to scale.
The new push to establish green banks in developing countries and transition
into a smart Third Industrial Revolution infrastructure is a clear sign that the
Green New Deal vision is universal in appeal. Interestingly, there is a growing
consensus that this smart green infrastructure revolution can move even more
quickly in emerging nations, for the simple reason that their liability is also their
asset. In other words, lacking infrastructure, developing countries are finding
that they can move more quickly to deploy a virgin green infrastructure
accompanied by the appropriate codes, regulations, and standards than highly
developed nations that have to decommission or build on an older Second
Industrial Revolution infrastructure. Solar and wind installations are
mushrooming across the developing world.
Back in 2011, Dr. Kandeh Yumkella, then director general of the United
Nations Industrial Development Organization (UNIDO), and I began a
conversation on how the developing countries could begin embracing and
deploying the smart Third Industrial Revolution vision. We jointly introduced
the concept in 2011 at UNIDO’s biennial General Conference. Yumkella
declared, “We are at the beginning of a Third Industrial Revolution,” and then
asked, “How do we share knowledge, share capital and investments around the
world, to make this revolution really happen?”39 UNIDO took up the challenge
of bringing the UN and developing countries into a green postcarbon narrative
and infrastructure deployment.
Green banks are proliferating in developing countries and industrialized
nations. However the financial mix is put together, pension fund capital will be a
driving force in the transformation. It’s a win-win for the Green New Deal
deployment.
Tens of millions of workers will invest their pension funds in their countries’
future, ensuring unionized workforces when possible, protecting the rights of
workers to organize, securing reliable returns on their pension funds, addressing
the issue of climate change head-on, and spurring the vast new business
opportunities and employment that accompany a transformation of their nations’
infrastructure in the emerging green era.
Here in the United States, irrespective of whatever green national bank bill
might be enacted into law, public pension funds, and even a growing number of
private pension funds, are going to do some of the heavy lifting in financing a
Green New Deal at the federal level. Still, their primary interest is going to be in
underwriting the much bigger green infrastructure investment at the state and
local levels, to the tune of $345 billion annually over the next twenty years.
But first, there is a spoiler at the party that needs to be addressed. Let me
explain. Since infrastructure is, by its very nature, a public good that every
citizen needs to access and use, infrastructure services were always thought of as
a public service provided by local, state, and national governments. However, a
shift has taken place at the state and local levels, with more and more existing
public infrastructure being sold off or leased as concessions to the private sector
and new infrastructure being privatized from the get-go. These are called
“public-private partnerships.” Part of the explanation for the shift lies in the
change in the political landscape that began in the early 1980s with the ascent to
power of Margaret Thatcher and Ronald Reagan, both of whom embraced
privatization and deregulation. The rationale was and still is that government
agencies overseeing and operating government-financed and -managed
infrastructure, without competition biting at their heels, eventually become
lethargic bureaucracies, slow to innovate, and poor managers when they finally
do so.
This is part and parcel of what has become the neoliberal ideology that
favors privatizing these key infrastructure services and letting the “open
marketplace” take a run at managing them henceforward. I should add, in
passing, that no good evidence was ever provided to back up this claim that
infrastructure would be better served in private hands. The rail service, the
electricity grid, the postal service, the public health service, public television,
and other government services seem to function very effectively, at least in the
more developed nations. Still, the politicization of public infrastructure captured
the public’s attention, at least enough to embolden neoliberal governments, from
Thatcher and Reagan to Blair and Clinton, to hand over many of their traditional
infrastructure responsibilities to the private sector and the whims and caprices of
the marketplace. I suspect that if ever an extensive history of this period were
done, we might find that the private sector, already sated in the conventional
markets, was anxious to grab hold of these potentially lucrative public
infrastructure services that came wrapped up with a built-in captive audience
that had little choice but to use them—a princely proposition for the
marketplace.
In more recent years, there has been a second wave of privatization of
infrastructure, primarily in response to an increase in public debt and, in some
countries, the public desire to reduce tax commitments in an era where wages,
especially among the middle and working classes, have not kept up with the cost
of living. It’s not surprising, then, that local and state governments have looked
to privatizing more and more of their public infrastructure. However, private
companies overseeing infrastructure are often far more aggressive in squeezing
profits out of what they regard as more of a business than a service, which often
leads to what industry watchers call “asset stripping.” This is a common
problem, experienced over and over again, with privately run prisons, toll roads,
schools, and the like.

Taking Back the Infrastructure

The entrance of pension funds into the investment of infrastructure brings a new
class of owners onto the field, different in many respects from private companies
in how they relate to infrastructure. Pension fund trustees are more likely to see
themselves as custodians or stewards, allowing them to take a more socially
responsible approach to how they invest. Trustees of public pension funds in
particular, but now private pension funds as well, have been among the
trailblazers in adopting the ESG principles of socially responsible investing,
prodded, in large part, by their members and union leaders. These pension funds
bring a different mentality, potentially more responsive to investing “social
capital” in infrastructure projects.
In the last several years, pension funds have begun to reposition their
portfolios away from traditional investments in equities, which are viewed as
overvalued, risky, short-term investments subject to gyrations between
overheated bull markets and ever-deeper recessions. Pension fund trustees are
becoming more interested in less volatile and more secure long-term investments
in green bonds with predictable returns, and infrastructure fits the bill. A recent
study conducted by PwC and the Global Infrastructure Investor Association
(GIIA) titled Global Infrastructure Investment makes this very point, saying that
“the last decade has seen a transformation in the world’s economic
infrastructure … driven by an influx of capital seeking long-term stable returns,”
with much of it coming from pension funds.40
For public employee pension funds, investment in public infrastructure is a
no-brainer: the very employment of their members is in the public sector, and
therefore, they have an intimate appreciation of the importance of public
services. But both public and private pension funds are more likely to be
responsive to investments in infrastructure, especially if it’s in the same region
where members live and work, since the investment secures an additional benefit
of improved infrastructure services for them and their families.
This is already occurring. The giant Quebec pension fund Caisse de dépôt et
placement du Québec (CDPQ) assembled sufficient financial resources to
develop and operate the light rail system in Montreal.41 Dutch pension funds
have joined into partnerships with local engineering companies and invested in
new road construction in their regions.42
In the long run, pension funds’ investment in public infrastructure is going to
be a better way to go than global corporations privatizing infrastructure and
running it as a solely for-profit business.
Now I’d like to get personal on why I’ve delved into such detail on the
question of global companies privatizing infrastructure versus direct investment
by pension funds in the build-out of public infrastructure. Recall the Google
initiative in Toronto, where the company is hoping to privatize, build out, and
manage a smart infrastructure that will eventually oversee the comings and
goings of an entire population in a metropolitan region. Although disturbing, this
is the next big market for the giant internet companies and ICT companies. Larry
Page said it himself, apparently so enamored with digital technologies’ inherent
efficiencies and benefits that he did not consider even for a moment that the
public might be repelled by the notion. I can tell you, from experience working
with regions across the EU in the deployment of their long-term green
infrastructure roadmaps, that the privatization of public infrastructure in the
hands of giant global companies, especially the internet, ICT, and telecom
companies, is a universal nonstarter.
On the other hand, public financing of infrastructure comes with its own
problems. Up front is the government’s need to minimize the ratio of debt to
GDP on its books. It’s a requirement across the EU. In America, local and state
governments are mindful of the same restraints and are aware that the kind of
investment needed will not come just from a commensurate hike in taxes or a
dive into deeper debt. How, then, do we navigate through the maze and find a
pragmatic formula to finance a twenty-first-century smart green infrastructure?
The message heard with more resonance across the financial community is that
we should look to the trillions of dollars of investment opportunity coming from
the untapped pool of public and private pension fund capital.
For their part, pension funds are willing and eager to invest. But there is a
catch. The real problem is a lack of camera-ready large-scale Third Industrial
Revolution infrastructure projects in which to invest. This is not unique to the
American market. This is a problem around the world, where cities, regions, and
countries are tinkering with thousands of small, unconnected pilot projects with
little initiative to scale an infrastructure transformation. For example, in the UK,
at present, there is only one mega-infrastructure project being deployed that is
financed by a consortium of pension funds: London’s £4.2 billion “super-sewer,”
known as the Thames Tideway Tunnel, billed as the “biggest overhaul of the
capital’s waste plumbing system since Victorian times.”43
Chris Rule, the chief investment officer at the Local Pensions Partnership,
which oversees a £12 billion Lancashire County pension fund, bluntly says, “My
perception is that pension funds are quite receptive to investing in UK
infrastructure. [The problem] is supply and demand. There is more money
seeking investments than there are available. That is pushing down yields.”
Adrian Jones, a director in the infrastructure debt team at Allianz Global
Investors, echoes the theme heard by both pension investors and insurance
companies, the other major players seeking investment opportunities in big
infrastructure developments: “We don’t see that there is a need for radical reform
to get more money into infrastructure. What we need are more investible
projects.”44 The universal complaint coming from pension fund trustees is No
more pilots! Give us some big-scale Third Industrial Revolution infrastructure
deployments to invest in over a period of time with stable returns and we’re in.
To sum up, with municipal, county, and state governments across the United
States uneasy about increasing their debt-to-GDP ratio or raising taxes to finance
large-scale infrastructure projects, and pension funds eager to invest at scale, the
conditions exist for a long-term collaboration that can transition regions across
America quickly into a green zero-carbon public infrastructure.
There is another snag that needs to be addressed to get America to the
starting line for a Green New Deal. Most of the infrastructure investment at the
local level in the United States is financed with tax-exempt municipal bonds.
This poses a problem. Local governments will often choose to finance
infrastructure projects via public procurement, rather than enter into financial
arrangements with private companies in public-private partnerships, because the
up-front tax-exempt municipal bonds are cheaper and more palatable, and an
easier sell to a public that is understandably skittish about privatizing
infrastructure. But private companies, in turn, complain that they often can’t
compete with cheaper investments made possible by tax-exempt municipal
bonds and can’t justify the smaller returns on investments they would have to
accept to win a public-private partnership deal.
Pension funds, however, have shown a greater willingness to invest in green
municipal bonds, and even accept lower returns for the opportunity to become
investment partners with local governments, because their primary interest is
guaranteeing a stable return for their pension fund members. Nonetheless, they
are not wholly sold on diving into the tax-exempt municipal bond market,
because pension funds are also tax-exempt and therefore do not secure any
additional value by investing in tax-exempt municipal bonds. Now, however,
pension fund advisors are floating a new proposal that is gaining traction as
cities and states attempt to lure the pool of public and private pension funds into
the purchase of green public bonds. The idea is to provide an incentive to
pension funds in the form of a tax credit for investing in green public bonds.
David Seltzer of Mercator Advisors introduced the idea at the National
Conference on Public Employment Retirement Systems in 2017. Seltzer
suggested that “pension funds could monetize tax credits attached to debt or
equity investments.” He explained that “pension funds could convert
nonrefundable tax credits to cash by applying them against their liability to the
US Treasury to remit retiree withholding tax on paid benefits.”45
Unlike the numerous tax advantage schemes in the federal tax code that
benefit global corporations, a slew of subsidized industries, the financial
community, and the very wealthy, this tax credit, though small in comparison, is
designed to merely provide a sufficient return to allow pension funds to invest in
green bonds funding American infrastructure projects. The extra benefit is that if
the tax credit were to be instituted to allow billions of dollars in pension funds to
divest from the fossil fuel industry and reinvest in the Green New Deal Third
Industrial Revolution infrastructure, it would not only help secure the retirement
of 73 million American workers but also ensure the well-being of their heirs in a
climate change world.
Although tax credits would certainly draw hesitant pension funds to invest in
green municipal bonds, there is still the issue of cities and states being saddled
with increasing public debt. To temper the public debt, cities and states will have
to entertain some form of public-private partnerships. But here again, 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.

ESCOs: The Business Model for a Green New Deal

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.
Performance contracts do away entirely with seller/buyer markets, replacing
them with provider/user networks in which the ESCO takes 100 percent of the
responsibility for financing all of the work and secures a return on its capital
investment based on its success in generating the new green energies and energy
efficiencies being contracted.
The emergent public-private partnership between governments and ESCOs
puts the technical expertise and best practices of private enterprise at the service
of the public, in a win-win mode, creating a powerful new dynamic between the
public and private sectors. Pension funds, in turn, are the best partner to finance
many of these public-private partnerships. The financing will come from the
deferred wages of millions of American workers who will benefit from a stable
and reliable return on their pensions, the prospect of millions of new jobs in the
emerging green economy, and a near-zero-carbon green future for their children
and grandchildren. For the first time, this new economic model brings together
local and state governments, the business community, and American workers
into a powerful partnership, each enabling the other to transform the very nature
of the social contract.
Here’s how the new collaboration works. First, local and state governments
issue a call for tender. ESCOs bid for the contract to build out part or all of the
infrastructure, with the following conditions. The company that wins the bid is
responsible for funding the infrastructure build-out. The ESCO’s return on
capital investment comes from the revenue earned from the installation of solar
and wind technologies and the generation of green electricity and the efficiency
gains in electricity transmission in the build-out and management of the smart
national power grid, as well as the energy efficiency gains brought on by other
types of performance-contracting work: retrofitting buildings; installing energy
storage equipment in and around facilities; installing IoT sensors to monitor and
improve energy efficiencies; installing charging stations for electric vehicles;
and reconditioning production facilities, processes, and supply chains to upgrade
aggregate efficiencies at every stage of business operations; etc.
Governments and ESCOs can also enter into a variation on the performance
contract. For example, the government agency can secure the financing for the
performance contract with the help of the ESCO, which often has open channels
to financing such projects. In this variation, the government agency is
responsible for the repayment of the financing, but the ESCO is still liable for
the savings guarantee that covers the payments and cost of the project. Any
losses still fall on the shoulder of the ESCO. The appeal in this second route is
that government agencies enjoy a tax exemption on their public projects, making
it more attractive to both the ESCO and the government agency.46
Performance contracts can also allow for the client to begin sharing the
benefits of the green energy being generated and the energy efficiencies coming
online while the work is being done and before the ESCO’s investment is fully
paid back. These modified performance contracts are called “energy savings
contracts.” Generally, the ESCO will receive the lion’s share of the harvested
energy as well as energy efficiencies attained—usually 85 percent—until the
company’s investment is fully returned and the contract terminated, after which
the client receives all future benefits.47 The city, county, or state, in return, ends
up with a smart, efficient low-carbon infrastructure without liability for either
the capital investment or any financial losses incurred during the project.
Socially responsible pension funds committed to doing well by doing good are
the appropriate financing mechanism for ESCOs engaged in green energy
production and energy savings build-outs.
ESCOs operate in the private realm as well as the public realm. Privately
held residential real estate and particularly low- and moderate-income housing,
older commercial business districts, which are often in disadvantaged
communities, and industrial and technical parks will have to transition their
infrastructures into a green Third Industrial Revolution paradigm. The ESCO
business model operates the same way whether in the government space, the
commercial domain, or civil society. Generous tax credits and graduated tax
penalties will need to be established for residential, commercial, industrial, and
institutional infrastructure transitions in every municipality, county, and state to
encourage the Green New Deal transformation.
Whether we are talking about transitioning the public or private
infrastructure from a dirty fossil fuel–laden society to a clean green society, the
overwhelming reality is that the poorest communities are the most vulnerable
and least-considered in the process. And it’s here that the public-private
partnership between local governments and ESCOs is likely to have the biggest
impact, by helping these at-risk communities transition into the Green New Deal
infrastructure and take advantage of the new business and employment
opportunities that accompany it, while simultaneously addressing the growing
public health emergency precipitated by climate change.
In a landmark county-by-county study on how climate change is likely to
affect every community in America published in the journal Science in June
2017, the authors report that the nation’s poorest communities across the South
and southern Midwest will suffer the most from rising temperatures, with loss of
GDP by the end of the century that could be as much as 20 percent of their
income. Solomon Hsiang, the lead author and professor of public policy at the
University of California, Berkeley, warns that “if we continue on the current
path, our analysis indicates it may result in the largest transfer of wealth from the
poor to the rich in the country’s history.”48
Not surprisingly, climate change is also having a dramatic impact on public
health in America, again affecting the poorest communities, whose populations
have the least access to adequate health services and to the financial wherewithal
to undertake remediation and adaptation initiatives brought on by climate change
events. Already, the radical change in the climate is exacting an ever-mounting
adverse effect on public health, with exposure to ozone and particulate matter
pollution brought on by greenhouse gas emissions leading to diminished lung
function, most notably asthma, and exposure to smoke from spreading wildfires;
increased exposure to allergens with warmer seasonal temperatures; heat-related
sickness and death, including heat stroke and cardiovascular disease; and
increased exposure to vector-borne diseases brought on by a shift in the
geographic range of insects; et al.
The inseparable relationship between climate change and a growing public
health emergency has become real for the millions of people in the United States
and around the world who have been subjected to the hurricanes, floods,
droughts, and wildfires caused by climate change. Aside from the immediate
threat to life posed by these disasters, there is the secondary effect caused by the
contamination of water.
In many older communities across America, sewage systems serve a dual
purpose, combining wastewater being sent along to wastewater treatment plants
with stormwater drainage. But now, more severe storms and hurricanes are
flooding the sewage/drainage infrastructure, forcing untreated sewage and storm
runoff to back up and overflow into homes, businesses, neighborhoods, and local
streams and rivers in many parts of the United States, posing a serious threat to
public health. And it’s only going to get worse with the ever-changing climate.
 Unfortunately, this is happening at the same time that the municipalities have
been selling off their freshwater and sanitation systems to private companies
which are often reluctant to upgrade antiquated water, sewage, and drainage
systems for fear of declining profit margins.
Cities in the United States and elsewhere are becoming aware of the threat to
public health and safety posed by the conjunction of dilapidated water, sewage,
and drainage systems with climate change–induced floods and have recently
begun to re-municipalize these critical infrastructures to gain back public control
over what has traditionally been one of the most critical public services
administered by government to safeguard public health.
Here again, the poor are the most vulnerable because their communities
generally have the oldest and most compromised infrastructures, the least access
to adequate public health services, and are the least serviced by remediation and
adaptation programs.
For all these reasons, ESCO intervention on the part of both local and state
governments and the private sector should be prioritized in the most
disadvantaged communities and among the poorest populations in the country.
Performance contracting is as much about adapting to climate change, making
sure nobody is left behind and ensuring the public health of the community by
building resilience into every aspect of a community’s economic and social life,
as it is about efficiency, productivity, and GDP. Indeed, in the context of
performance contracting, they are indistinguishable.
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 well-being.
Last but not least, the success of performance contracts is wholly dependent
on the training and deployment of potentially millions of semiskilled, skilled,
and professional workers who retrofit the residential, commercial, industrial, and
public building stock across America, build out the national smart power grid,
install the solar and wind technologies, lay the broadband cable, embed the IoT
technology, produce the electric and fuel-cell vehicles, manufacture and install
the electric charging stations and energy storage facilities, and lay out the smart
solar roads across the country. Energy service companies operating in
performance contracts equally benefit the ESCO, the workforce, and the
community.
Performance contracting is not just a new sidebar of capitalism but rather a
fundamental disruption of the capitalist model, forcing a paradigmatic transition
in how society structures economic life in the twenty-first century. I remember
my first day in marketing class at the Wharton School back in 1963. The
marketing professor wrote on the blackboard the Latin phrase caveat emptor,
“let the buyer beware,” and informed the students that if they learned nothing
else in his class, they should remember this cardinal rule. The saying refers to
what economists call “information asymmetry,” meaning that the seller never
wants the buyer to know all the information he or she has on the product or
service, including its real costs, actual performance, life cycle, and so on. This
lack of transparency built into the system puts the buyer at a distinct
disadvantage. Some of the asymmetry in the relationship is tempered by
company warranties, but these inevitably fall short of protecting the buyer.
Performance contracting eliminates this bias of market transactions between
sellers and buyers and, with it, the unequal and weighted advantage that always
accrues to the seller, by eliminating sellers and buyers in markets altogether and
replacing the traditional capitalist model with providers and users in networks.
It’s worth repeating that in performance contracting, the ESCO can only
recoup its investment by ensuring its own performance. This means, for
example, achieving sufficient gains in energy generation and aggregate
efficiencies to make the investment pay off. The user, in turn, gets a free ride.
Once the ESCO’s investment makes its return, the user enjoys a steady stream of
green energy and energy efficiencies accruing from the equipment installed and
accompanying efficiency processes put in place.
The underlying feature of ESCOs is that their services are designed to
increase the aggregate efficiencies, productivity, and generativity of their clients’
business operations and, by doing so, reduce the fixed and marginal costs of their
operations, reduce their carbon footprint, and hone circularity and resilience
deep into every aspect of the clients’ business practices. Many ESCOs extend
their services after the initial performance contract has paid out, especially in the
commercial and industrial sectors, by managing the continuous upgrade of the
services for their users.
ESCOs, to date, have played more of a niche role, often scaling small, siloed
projects. Now, however, the urgent need to scale up a Green New Deal Third
Industrial Revolution infrastructure across neighborhoods, cities, regions, and
continents in less than a generation has ramped up the ante as well as the cachet
of this new business model.
Navigant Consulting published a report ranking the current top ESCO
performers in 2017. (Navigant is a partner in the TIR Consulting Group LLC
consortium.) The top ten companies were (1) Schneider Electric, (2) Siemens,
(3) Ameresco, (4) NORESCO, (5) Trane, (6) Honeywell, (7) Johnson Controls,
(8) McKinstry, (9) Energy Systems Group, and (10) AECOM.49 Both Schneider
and Siemens have participated in TIR Consulting LLC’s regional roadmaps over
the past decade.
In 2013, Siemens CEO Peter Löscher invited me to the company’s annual
meeting to talk with the board of directors, and later to have an extended
conversation with the twenty global division leaders, on how to begin creating
the business models and scaling opportunities for the build-out of a Third
Industrial Revolution infrastructure. When I met with the division heads, it
became clear that they were, for the most part, working independently from one
another. Siemens’ divisions include IT, energy, logistics, and infrastructure, all
key components for deploying a smart green infrastructure. The timing of the
meeting was fortuitous, as the company was in the process of rebranding as a
“solution provider” to help create smart sustainable cities. The infrastructure
build-out provided the story line for the various divisions at Siemens to leave
their silos and become a more cohesive and inclusive solution provider.
At the meeting, we discussed the ESCO performance-contracting model as a
new business mechanism for scaling up smart infrastructure across metropolitan
and rural regions. Five years later, Siemens was ready for prime time. The
company invited me to New York City on February 8, 2018, to present the Third
Industrial Revolution narrative to its assembled clients, customers, developers,
members of infrastructure organizations, investment banks, and policy advisors.
The conference was appropriately titled “Investing in Tomorrow: Digitalizing
North American Cities.” Part of the conference was dedicated to performance
contracting for Third Industrial Revolution rollouts.
Although Siemens ranked sixty-sixth among the Fortune 500 Global
Companies in 2018, no single company will be able to go it alone and scale up a
twenty-year construction site in every city, region, and country to transition the
world economy into a zero-carbon Third Industrial Revolution paradigm. More
likely, Siemens and hundreds of other large companies will join with thousands
of regional, high-tech small- and medium-sized enterprises, blockchained in
cooperatives, in an ESCO performance-contracting business model, financed by
a consortium of global and national pension funds, working with local
municipalities and regions to provision the scale-up of a smart Green New Deal
infrastructure. This distributed ESCO blockchain model is likely to be the
favored approach to quickly transitioning local and regional economies, given
the tight fifteen-to-twenty-year time frame hovering over us.
Left at the wayside is the old neoliberal model of global companies going it
alone, using conventional business practices to build out and manage the new
green infrastructure as a private venture, giving them leverage and control over
both the infrastructure and accompanying services.
The new performance-contracting model, by contrast, 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
“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 is the essence of “social capitalism” and represents a pragmatic business
model that can speed the transition into a near-zero emission era in the short time
horizon before us. If the seller/buyer market was the appropriate business model
for a fossil fuel civilization and the Age of Progress, ESCO provider/user
networks engaged in performance contracts are the signature business model for
building and managing a sustainable green civilization in the emerging Age of
Resilience.
 7

MOBILIZING SOCIETY

Saving Life on Earth

It’s heartening to watch the Green New Deal spread across America, Europe,
and the world. To this degree, ideas do indeed have consequences. We are a
storytelling species. We live by our narratives and the stories we share, and by
doing so, come to know ourselves as a collective social being. The Green New
Deal is a “story line” that has evolved and matured over the years, taking on ever
more sophisticated and nuanced meanings. And now humanity finds itself in the
throes of either a potential endgame or, hopefully, a new beginning. The Green
New Deal gives us our collective voice and a shared sense of our common
mission. What we so desperately need now is to turn the story line into a
powerful narrative that can take us forward.
To this end, America’s entrance into the conversation is crucial. While the
“can-do” attitude is in our cultural DNA, it’s the “American spirit” that
unleashes it. That spirit has always been hopeful of a better future, with
successive generations willing to pledge their lives, their fortunes, and their
sacred honor to noble tasks, even at times to the point of reckless disregard for
the practicalities and obstacles along the way. We see this time and again in the
unleashing of the entrepreneurial spirit, not just in the marketplace but also in
civil society. Americans’ most unique quality is not fearing failure, be it
pecuniary or social in nature. Often when I visit friends and colleagues in other
countries, their conversation slips to America’s risk-taking attitude and
willingness to fail and start over, to learn from defeat, to never quit.
This is exactly the attitude humanity needs now to weather the climate storm
that’s coming—a fearless resilience in the face of the unknown, willingness to
meet it head-on, and, when pushed down, to stand up again. But this time
around, the tomorrows are not going to be like those we experienced in the past.
Anyone who tells you that the Green New Deal is going to preserve the way of
life we know, sugarcoating the greening of society, is kidding you. Our
tomorrows are going to be fraught with escalating climate events that are going
to take an immense toll on our communities, our ecosystems, and our common
biosphere.
We are entering into a frontier of a new kind. Nature is rewilding, and we
have to learn how to live with the uncertainty while adapting moment to moment
to its surprises. We are going to need to cast aside any notion previously
entertained about pacifying nature and molding and shaping it to serve humanity.
Now we will need to regroup, gather our collective strength, learn to live by our
wits, and find within ourselves the deep resilience that will allow us to survive
and carry on into an unknown future that awaits our species and fellow creatures
here on this little blue oasis in the universe. The sudden willingness of a younger
generation of Americans and young people all over the world to do battle on
climate change is a welcome turn of events, and long overdue.

A Missive from Europe

Mindful of the powerful Green New Deal clarion call sounded at the beginning
of 2019 by a younger generation of activists and newly elected officials at the
local, state, and national levels here in the United States, I’d like to bring my
fellow Americans up to date on the most recent developments around the Green
New Deal in Europe, announced just months before this writing by the European
Commission, so that European and American activists can share notes on the
great mobilization ahead.
On November 28, 2018, the European Union unveiled the next stage of its
journey to decarbonize the continent and bring on a more sustainable future. The
European Commission is calling for a climate-neutral Europe by 2050, a zero-
emission ecological society stretching across the entire expanse of the European
continent.1 The twenty-eight member states are all coming along, some more
enthusiastically, others with a grumble, but everyone realizing that this is not the
time to retreat but, rather, to redouble our efforts.
Here is a brief run-up to the EU climate-neutral 2050 game plan. We began
in August 2016 by getting the EU member states comfortable with the new
climate targets that would be proposed by the end of 2018. I joined EU
Commission vice president Maroš Šefčovič in Slovakia on July 9, 2016, during
Slovakia’s presidency of the Council of the European Union. Šefčovič
introduced the outline of the new directives and goals of the EU Energy Union,
tying the new renewable energy targets, energy efficiency targets, and CO2
reduction targets for 2030 and 2050 to the smart Europe rollout. I was asked to
present the case for a smart infrastructure transformation that could bring the EU
into a postcarbon era before midcentury.2
We followed up the next year, on January 31, 2017. I delivered a similar
message cued to the financial community in a presentation at the European
Central Bank with the theme “A History of the Future—The World in 2025.”3
A week later, on February 7, Vice President Šefčovič and I joined Markku
Markkula, the president of the Committee of the Regions, in a high-level
conference hosted by that committee titled “Investing in Europe: Building a
Coalition of Smart Cities & Regions.”4 It was important to bring the EU’s
powerful but often overlooked 350 governing regions into the fold, given that
the ultimate success of the plan to decarbonize Europe and transition to a green
era by 2050 would lie with the scale-up of a smart green infrastructure
customized to each region. Šefčovič emphasized that a sustainable future “relies
on regions and cities to deliver” on the EU’s targets for increasing renewable
energy, accelerating energy efficiency, and reducing the carbon footprint. We
briefed the representatives of the regions on the progress being made in the three
green lighthouse regions we were working with in Hauts-de-France, the twenty-
three cities from Rotterdam to The Hague in the Netherlands, and the Grand
Duchy of Luxembourg.
With the Council of the European Union, the EU’s Central Bank, and the
Committee of the Regions briefed and enthusiastic, Šefčovič and his team spent
the next twenty-two months working on the much-anticipated EU Commission
2050 report, which was delivered on November 28, 2018, by Šefčovič, Miguel
Arias Cañete, the commissioner for climate action and energy, and Violeta Bulc,
the commissioner for transport.
Vice President Šefčovič informed the EU member states that “our strategy
now shows that by 2050, it is realistic to make Europe both climate-neutral and
prosperous.” Commissioner Cañete made note of the historic importance of this
EU milestone, saying that “today, we are stepping up our efforts as we propose a
strategy for Europe to become the world’s first major economy to go climate
neutral by 2050.”5 According to the report, renewable energy consumption had
spiked from 9 percent in 2005 to 17 percent in 2018 and was on schedule to meet
the 20-20-20 target of 20 percent renewable energy consumption across the 28
member states along with the other two targets of a 20 percent increase in energy
efficiency and a 20 percent reduction in CO2 emissions, by the 2020 deadline.6
Going forward, the plan requires joint action earmarked in seven strategic
areas: energy efficiency; deployment of renewables; clean, safe, and connected
mobility; competitive industries and a circular economy; infrastructure and
interconnections; bioeconomy and natural carbon sinks; and carbon capture and
storage to address remaining emissions.
With 2020 targets in reach, the EU has set still even more aggressive new
targets of 32 percent renewable energy, a 32.5 percent increase in energy
efficiency, and a 45 percent reduction in greenhouse gas emissions, all by 2030,
and a target to be nearly carbon-free by 2050.7 But the report acknowledged that
although the EU was leading the world into a zero-emission postcarbon era,
efforts were still far too slow, given the newly released IPCC report warning that
the world’s nations only have twelve years left to transform their economies out
of a carbon culture or risk sliding over the 1.5°C rise in Earth’s temperature and
into an inevitable free fall, taking us deeply into the sixth mass extinction.
I’d like to share the first few lines of the EU Commission report, which I
think will resonate with the Green New Deal activist message moving across
America:

The Strategy therefore outlines a vision of the economic and

societal transformations required, engaging all sectors of the
economy and society, to achieve the transition to net-zero
greenhouse gas emissions by 2050. It seeks to ensure that this
transition is socially fair—not leaving any EU citizen or region
behind—and enhances the competitiveness of the EU economy and
industry on global markets, securing high quality jobs and
sustainable growth in Europe.8

These lines are particularly moving. The EU has transitioned from having a
laundry list of projects to articulating “a vision of the economic and societal
transformations” that will usher in a new era in the European Union. This is
Europe’s key message to America’s Green New Deal activists and activists
around the world. The vast majority of cities, regions, and nations are still mired
in siloed green projects and initiatives tucked inside the body of an outdated
twentieth-century fossil fuel economic paradigm and its accompanying business
model and form of governance.
 Many of the Green New Deal declarations, manifestos, reports, and studies
being scrutinized in the public debate read more like a story line at best, or a
shopping list at worst. Each of these items alone seems so very technical and
scanty. They fall short of steering the kind of shift in consciousness that can take
us on the journey before us.

Thinking Like a Species

At this critical juncture in history, the Green New Deal story lines need to be put
together in a coherent economic and philosophic narrative that can create a sense
of our collective identity as a species and bring humanity into a new worldview,
giving us a glocal heartbeat. Absent the story, all the ideas get lost in a jumble of
items, none of which connect to the others. Every idea becomes a fought-over
non sequitur, sapping us of the strength for the imaginative leap needed to take
us into the next era of history.
All of which takes us back to chapter 1, “It’s the Infrastructure, Stupid!” The
great paradigm changes in human history are infrastructure revolutions that
change our temporal/spatial orientation, our economic models, our forms of
governance, our cognition, and our very worldview. The convergence of new
communication technologies, new sources of energy, and new modes of mobility
and logistics to manage, power, and move the economy and society changes the
way we think about the world around us.
Forager/hunter primitive infrastructures, which dominated most of our
200,000-year history, were remarkably similar in their narratives, each exhibiting
what anthropologists call a “mythological consciousness” and tribal governance.
The advent of agriculture 10,000 years ago and the subsequent emergence of the
great hydraulic agricultural infrastructures in Sumer in the Middle East, the
Indus Valley in India, and the Yangtze River Valley in China gave rise to
“theological consciousness” and centralized governing empires. The First
Industrial Revolution infrastructure in the nineteenth century gave rise to
“ideological consciousness” and the birth of national markets and nation-state
governance. The Second Industrial Revolution global infrastructure in the
twentieth century gave rise to “psychological consciousness” and the beginnings
of global markets and global governing bodies. The Third Industrial Revolution
glocal infrastructure emerging in the twenty-first century is giving birth to
“biosphere consciousness” and peer assembly governance. The biosphere,
stretching up into the atmosphere and down through the lithosphere and into the
oceans, is where all the creatures on Earth live, interact, and flourish.
Each of these great paradigm shifts was accompanied by the evolution of our
empathic impulse to larger collectivities and worldviews. In forager/hunter
societies, empathy extended only to blood ties and kinship and the sharing of a
common ancestral worldview. In the great hydraulic agricultural civilizations,
empathy extended to those who shared a common religious affiliation. The great
religions formed during this era, giving rise to non-blood-related “figurative
families” based on religious ties. All converts to Judaism began to empathize
with fellow Jews as their extended figurative family. The same with Hindus,
Buddhists, Christians, and Muslims. In the First Industrial Revolution in the
nineteenth century, empathy extended to figurative families based on a collective
sense of national loyalty to the Motherland or Fatherland. Citizens began to
empathize with each other based on their nation-state identity. In the Second
Industrial Revolution in the twentieth century, empathy extended to like-minded
cosmopolitan and professional ties in an increasingly borderless world. In the
emerging Third Industrial Revolution, a generation of digital natives Skyping in
global classrooms, interacting on Facebook and Instagram, gaming in virtual
worlds, and obsessively traveling the physical world are beginning to see
themselves as a planetary cohort inhabiting a common biosphere. They are
extending empathy in a more expansive way, coming to think of themselves as
members of a threatened species and empathizing with their common plight on a
destabilizing Earth. And a growing number of young people are beginning to
take a final step beyond, empathizing with all the other creatures with whom we
share an evolutionary heritage.9
A younger generation beset by climate change is waking up to a reality that
is both unnerving and revelatory at the same time. We are beginning to
understand that the Earth is embedded in an untold number of interacting
agencies—the conjoined movements of the hydrosphere, lithosphere,
atmosphere, biosphere, and magnetosphere; the temporal sequencing of the
Earth’s circadian, lunar, and circannual rhythms and the changing of the seasons;
and the ebbs and flows of nature brought on by the continuous interactions of the
Earth’s myriad creatures—all bumping up against each other in an array of
feedbacks so subtle that we can barely begin to take in how each encounter
changes the dynamics of the system as a whole. Yet, somehow the Earth seems
to continually evolve, readjust, adapt, and maintain its equilibrium, much like a
planetary organism. At least up until now!
We have suddenly been sensitized to the consequences of disturbing the
burial grounds of a previous geological era. We dug up the remains of earlier life
that once existed on the planet and that was transformed into coal, oil, and
natural gas. We have been living off this stored “body” of energy for the past two
hundred years while casting off the waste in the form of CO2 emissions into the
atmosphere. The great disruption triggered positive feedback across the Earth’s
agencies, bringing us to the sixth extinction event in our planet’s history.
We now know that every piece of coal, every drop of oil, and every cubic
foot of natural gas that twelve generations of human beings have used to create
our carbon-based industrial civilization have had consequences that are now
reshaping the dynamics of the Earth. What we are learning from climate change
is that everything we do affects the workings of everything else on Earth and has
consequences for the well-being of all the creatures with whom we cohabit this
planet.
Awareness of the planetary agencies that affect our very existence is a
humbling experience and the central lesson that climate change is teaching us.
Learning to live among rather than rule over these agencies that traverse the
Earth is what takes us from dominion to stewardship and from human-centric
detachment to deep participation with the living Earth. This is the great shift in
temporal-spatial orientation that gives us a biosphere perspective.
This fundamental transformation in human consciousness is the silver lining
—the imaginative breakthrough—that, if truly internalized and harnessed, is
what will give us a fighting chance of riding out the great climate disruption and
surviving and maybe even flourishing in new ways over eons to come in a world
very different than the one we all know today.

The Three Elephants in the Room

The EU, with its 512 million citizens, has, until recently, led the charge into a
zero-emission green economy. The People’s Republic of China, with its nearly
1.4 billion people, has roared onto the field in recent years with its plan to
transition into a postcarbon era. And now the United States, with its 325 million
citizens, is poised to join the herd. Without all three elephants marching in sync,
sharing best practices, establishing common codes, regulations, standards, and
incentives, and reaching out together to bring the rest of humanity into the fold,
the race to a zero-carbon civilization in less than twenty years will be lost.
In working with the leadership in both the European Union and China, I’ve
come to see that both governments are on the same path to address climate
change. They both understand that the mission is the quick decoupling of every
sector and industry from the Second Industrial Revolution infrastructure and
their recoupling in the emerging Third Industrial Revolution infrastructure. The
EU calls the Third Industrial Revolution “Smart Europe,” and China calls the
Third Industrial Revolution “China Internet Plus.” They are similar plans, and,
despite the two governments’ squabbles, disagreements, and occasional
suspicions of each other, they share common ground.
First, recall that the EU is China’s largest trading partner, and China is the
EU’s second-largest trading partner and relatively soon will likely be its largest,
binding the two governing giants in a common commercial domain.10 Second,
both the EU and China share a common Eurasian landmass stretching from
Shanghai to the Port of Rotterdam, binding them together across the largest
contiguous geographical space in the world. Third, both the EU and China are
clear about their role at this moment in world history: to address climate change
and preserve life on Earth. Fourth, both the EU and China are reaching out
beyond their borders to assist other regions in making the transition to a
postcarbon civilization. On this last point, China has taken a commanding lead
with its Belt and Road Initiative. The initiative was announced by President Xi
Jinping in 2013 and takes its inspiration from the ancient Silk Road, the trade
route that connected China, Asia, and the West.11
The vision is to build out a twenty-first-century smart digital infrastructure
that can connect all of Eurasia, creating the largest integrated commercial space
in history. The Belt and Road Initiative is more than just a new global trade
initiative combined with conventional infrastructure investment to ensure
adequate transport and logistics corridors and speed commerce across Eurasian
supply chains and markets. Rather, it is part of a bigger philosophical agenda on
the part of China to establish what it calls an “ecological civilization.”12
In 2012, the Chinese Communist Party signaled an extraordinary shift in its
governance and worldview by embedding the term “ecological civilization” into
the heart of its constitution and making it the theme of its twelfth Five-Year Plan,
and all Five-Year Plans thereafter. In practice, the Chinese government has
stipulated that all future economic planning and development in China must
adhere to and harmonize with the guiding principles of nature and the Earth’s
operating systems.
The ecological civilization is the core not only of China’s domestic policy
but also of its Belt and Road Initiative. The vision takes China from a
geopolitical worldview that dominated the politics of nations through the First
and Second Industrial Revolutions of the nineteenth and twentieth centuries in a
fossil fuel civilization to a biosphere worldview that will increasingly guide
international affairs in the Third Industrial Revolution of the twenty-first century
at the dawn of an ecological era.
This is not to suggest that traditional geopolitics suddenly disappears with
the Belt and Road Initiative. The struggle between geopolitics and biosphere
politics among China, the European Union, the United States, and, for that
matter, the rest of the nations of the world will be protracted over the remaining
course of the twenty-first century. But what is sure is that the geopolitical
worldview wedded to a fossil fuel civilization is dying, and the biosphere
worldview of an ecological civilization is emergent and represents the next stage
of the human journey. This is the larger picture in which a green vision,
narrative, and transition are emerging, not only in China, but also in the
European Union and now just getting off the ground in America and throughout
the world.
In September 2018, the European Commission and the High Representative
of the Union for Foreign Affairs and Security Policy published a joint
communication, “Connecting Europe and Asia Strategy,” outlining the EU’s
approach to creating a seamless Eurasian smart infrastructure. The EU made it
clear that its efforts to assist communities and countries across Eurasia, like
China’s Belt and Road Initiative, will focus on the building out of smart digital
networks that bring together telecom and internet connectivity, the revving up of
renewable energy generation, the decarbonization of transport and the
digitization of mobility, the prioritization of energy efficiencies across the
building stock, and all of the other infrastructure components of the Third
Industrial Revolution.13
The EU joint communication notes that indispensable to the success of a
digitally connected smart Eurasia infrastructure will be developing universally
accepted codes, regulations, standards, incentives, and penalties, agreed upon by
all the participating nations, in a spirit of “transparency,” that would enable the
deployment of an integrated smart commercial space across the world’s largest
landmass.
The EU-China collaboration is vital to divesting from the fossil fuel
civilization and reinvesting in the ecological civilization. Both superpowers are
already far along in the transformation. While critics can rightfully argue that
China is still pouring investment dollars into fossil-fuel-related infrastructure
across the Belt and Road Initiative, it is quickly pivoting to renewable energy,
smart electricity grids, and electric transport networks that make up a Third
Industrial Revolution paradigm.
In May 2017, the Chinese Ministry of Environmental Protection, the
Ministry of Foreign Affairs, the National Development and Reform
Commission, and the Ministry of Commerce issued an unprecedented “Guidance
on Promoting the Green Belt and Road” as the very foundation of the Belt and
Road Initiative, with the goal of bringing nations, regions, and localities into a
global collaboration to build an ecological civilization. China is putting its
money where its mouth is, with scaled green infrastructure projects being
launched across all of Asia. I encourage readers to download the “Guidance” and
judge for themselves both the intent and the merit of the protocol.14
I took part in several of the early discussions on advancing the green Belt
and Road Initiative at the National Development and Reform Commission, the
State Council, China’s National Academy of Sciences, and the Ministry of
Industry and Information Technology and shared with the Chinese leadership our
efforts and initiatives at the European Commission and in the EU member states
and regions in transitioning into a green Third Industrial Revolution. In 2017, at
the request of China’s Ministry of Industry and Information Technology, I wrote
an introduction to its publication of Digital Silk Road: The Opportunities and
Challenges to Develop a Digital Economy Along the Belt and Road, the
government’s plan to invest over $1 trillion to assist nations and regions across
Eurasia in transitioning into a green zero-emission digitally connected
infrastructure.15
The Belt and Road Initiative is just the beginning of the great transformation
that will connect the human race across the globe over the course of the next half
century. Feasibility studies and deployment plans on laying out smart, digitally
enhanced high-voltage power grids across entire continents to share renewable
energies are already in play. A 2019 feasibility study on a proposed Pan-
American interregional power grid that will stretch from Alaska to Chile and
potentially be in place by 2030 has sparked a conversation across the Americas
on how this intercontinental technological alignment will likely affect the
economy, social life, and governance of nation-states in this region of the
world.16 Another report published in 2019 details plans to lay a submarine power
cable between Europe and North America to trade solar- and wind-generated
green electricity across the Atlantic Ocean.17 Similar feasibility and deployment
plans to establish an Africa-wide power grid and a European–African power grid
are afoot.
 We are in the early stages of creating a global interconnected electricity
power grid—a digital Pangaea—that is likely to come online in bits and pieces
between now and the late 2030s, connecting the human race for the first time in
history. Individuals, families, communities, and entire countries will be freed
from the geopolitics of the oil era, characterized by conflict and war in a zero-
sum game, and become increasingly engaged in a biosphere politics of deep
collaboration in sharing the free sun and wind that bathe the Earth.
Connecting the human family on a glocal scale across a smart digital
infrastructure is a singular event in the way humanity conducts its economic
affairs, social life, and governance. Still, there is growing concern and even fear
that China might seize this moment in history to fund and build out the smart
infrastructure and use it for leverage in the form of surveillance and intervention,
allowing it to exercise control over the lives of much of the human race. From
my own experience in China, I don’t think this is the intent. Even if it were, any
such effort would fail if localities, regions, and countries along the Belt and
Road were to exercise caution at the get-go and ensure that the build-out of the
infrastructure and its subsequent ownership and management within their
jurisdictions were under their various governments’ strict control.
Then, too, we need to remember that the very nature of the Third Industrial
Revolution digital infrastructure favors distributed rather than centralized
control, and, to achieve network effects, it works best if the networks are open
and transparent rather than closed and proprietary, and scale laterally rather than
vertically to optimize aggregate efficiencies and circularity. The engineered
platforms favor flexibility and redundancy, the two key elements in establishing
regional resilience in a climate change world.
Were the intention of any nation-state or renegade group to surveil, control,
cripple, or take down the networks, cheap, simple technology components built
into the system at the end user’s door will allow families, neighborhoods,
communities, businesses, and local and regional governments to go off-grid at a
moment’s notice and decentralize and reaggregate their operations. There is no
conceivable path by which a superpower could hold hostage several billion
people in millions of communities if they chose to simply go off a Eurasian
power grid, or for that matter a global power grid, and go it alone in harvesting
their solar and wind energy in their neighborhoods and surrounding
communities.
Humanity is moving toward a glocal, digitally interconnected green world.
The EU and China are currently leading the way. The United States needs to
come to the table. These three elephants in the room need to begin to cooperate
and help build in the safeguards and assurances that will enable this transition
into a Green New Deal. The politics of the biosphere era will inevitably cluster
around the codes, regulations, and standards of operation that allow for
transparency across this emergent digital infrastructure and accompanying
networks, always with the focus on the freedom of every locality and region to
govern its infrastructure as a public commons.
A last word on this matter. If the three elephants can’t put geopolitics behind
them and begin to collaborate along a biosphere gradient, recognizing that we
are an imperiled species on an imperiled Earth, we are doomed. While our
respective loyalties and commitments are diverse, climate change is forcing us to
think of ourselves as an “endangered species” for the first time. Living with that
new reality brings the human race together in a common bond that we’ve never
before experienced.
The younger generation gets it. They are staring down into a potential
environmental chasm. They don’t want to hear their practical-minded, hardened,
and even cynical elders say that a Green New Deal is unrealistic or a fantasy and
that life is a zero-sum game. At this moment in history, we need to trust each
other, all of us, beyond political boundaries, and begin to think as a species.
What does all this mean for the excitement building around a Green New
Deal for America and other countries not yet fully engaged in either the narrative
or the process? What lessons can we learn? First and foremost, the climate crisis
is here and the transition to a zero-carbon society must be fast, because we’re
running out of time. But second, we need to realize that there is a gaping
difference between 1932 and the present. This may be hard to hear for activists
who want to repeat the New Deal agenda of the 1930s. It isn’t going to happen
the same way this time. Today, market forces are deconstructing the fossil fuel
civilization. The speed and scope of the disruption are without parallel. The old
fossil fuel energies are creating a carbon bubble that is unlike any economic
disruption in human history. The key sectors of the economy—
ICT/telecommunications/internet, electricity, transport, and buildings—are
quickly decoupling from fossil fuels and recoupling with renewable energies,
establishing the pathway to a Third Industrial Revolution.
This decoupling of sector after sector from fossil fuels and recoupling to
cleaner renewable energies and green technologies is speeding us out of the
fossil fuel culture. Some studies project that tipping point as early as 2023 and
others as late as 2035. Balancing the various scenarios and projections, the
inflection point is likely going to occur somewhere down the middle with a
collapse of the fossil fuel civilization coming at or around 2028.
The thing to bear in mind is that the collapse of the fossil fuel civilization is
inevitable, despite any efforts by the fossil fuel industries to forestall it. Market
forces are far more powerful than whatever lobbying maneuvers the fossil fuel
industry might entertain. This, too, might be difficult to hear for those activists
still wedded to the idea that the market is never on the side of the people. I am
certainly aware that this is often the case, and for a lifetime I have been critical
of various aspects of market capitalism. This time, however, and with this
disruption, the market is a guardian angel looking over humanity.
But the invisible hand alone will not steer us into the Age of Resilience.
Building a new ecological civilization from the ashes will require a far more
collective response that marshals our public capital, market capital, and social
capital at every level of governance and engages the deep participation of the
entire body politic.
In the Age of Progress, we could each aspire to go it alone in the
marketplace, or at least that’s what the powers that be wanted us to believe. In
the climate change world that is now here, we already know that the Age of
Progress is history and our future lies in an Age of Resilience that will require a
collective effort in every community on a scale never before experienced in our
short history on Earth.
From here on out, the name of the game is “thoughtful speed.” We need to
expedite the transition into the green era brought on by the sectorial decoupling
from fossil fuels and accelerate the build-out of a Green New Deal zero-carbon
infrastructure across America and around the world.

The Twenty-Three Key Initiatives of the Green New Deal

A consensus has been emerging around twenty-three key themes and initiatives
that need to be enjoined simultaneously to begin the Green New Deal journey.
Here they are.

First, the federal government should impose an immediate across-the-board

aggressive rising carbon tax, with a significant portion of the revenues
returned to US citizens through lump-sum rebates so that families,
especially the most vulnerable, will receive more in carbon dividends than
they pay in higher energy prices, and the remainder of the revenue used
 by the federal government and the states to help finance the Green New
Deal infrastructure.
Second, the federal government should establish a quick phasedown and
elimination of the $15 billion in annual fossil fuel subsidies.
Third, the federal government, in tandem with the fifty states, should
prepare and deploy a seamless national smart power grid across the
United States to provide sufficient green electricity capacity to power a
nationwide smart distributed Third Industrial Revolution infrastructure.
The federal government should finance a significant portion of the build-
out of the national smart grid, while the states pick up the remaining
financing. A juvenile bare-bones national smart grid infrastructure should
be operational by 2030, and a fully mature operational power grid should
be online before 2040.
Fourth, the federal, state, municipal, and county governments should
provide tax credits and other incentives to encourage the accelerated
installation of solar and wind technologies, where viable, across the built
environment and landscape to transition the nation into zero-emission
green energies generated at near-zero marginal cost. The mix of solar and
wind installations should prioritize neighborhood and community
microgrids to build flexibility and resilience into the infrastructure.
Microgrid cooperatives should be able to easily disconnect from the main
power grid during or after a climate event or cyberterrorist attack and
share locally generated solar and wind power in their neighborhoods. The
federal government should also reprioritize the use of public lands and
immediately phase out all fossil fuel concessions and phase in a vast
increase in solar and wind installations.
Fifth, the federal, state, municipal, and county governments should provide
tax credits and other incentives for the installation of energy storage
technology in homes, commercial buildings, and industrial and
institutional facilities to provide backup power both to manage
intermittent energy across the power grid and to provide the on-site
supply of emergency power should the power grid be compromised
because of a climate disaster or a cyberterrorist attack.
Sixth, the federal, state, municipal, and county governments should
introduce broadband and the Internet of Things, conditional on the
potential health and environmental impacts of wireless versus cable
connection. The states should prioritize broadband installation in rural
 communities and disadvantaged communities.
Seventh, all industries using data centers should receive federal tax credits
for installing 100 percent renewable energies on and around their data
center facilities by 2030, allowing them to run totally off-grid to ensure
the security of data if the power grid is crippled or goes down due to
climate-related events or cyberterrorism.
Eighth, federal and state tax credits should be granted for the purchase of
electric vehicles, and graduated tax hikes should be imposed on the
purchase of internal combustion vehicles. To speed the process, vouchers
to be used to purchase electric vehicles should be offered for trading in
clunkers (internal combustion vehicles). The vouchers should exceed the
trade-in value of the internal combustion vehicles. The federal
government should immediately set a date of 2030 for eliminating the sale
and registration of all new internal combustion vehicles—cars, trucks, and
buses.
Ninth, the federal government and state, municipal, and county governments
should provide tax credits for installing electric charging stations in and
around residential, commercial, and industrial building sites to power
electric vehicles. Real estate companies and landlords owning dwellings
with multiple occupants should be encouraged to install sufficient
charging stations and should receive a tax credit for doing so and an
escalating tax hike over time for not providing the service.
Tenth, the federal government should mandate and finance the transition of
all federal property to green zero-emission assets and infrastructure by
2030, using procurement to boost green businesses. The federal
government and state, municipal, and county governments should also
immediately introduce an across-the-board set of generous tax credits and
deductions, grants, and low-interest loans to encourage the retrofitting of
the nation’s residential, commercial, industrial, and institutional building
stock and the conversion from gas and oil heating to electric heating by
renewable energy from the grid, with the goal of increasing energy
efficiency, reducing global warming emissions, and bolstening resilience
to climate-related disruptions. Additional supplementary tax credits,
deductions, grants, and low-interest loans should be extended to low- and
middle-income rental properties and homeowners to encourage retrofits.
All federal tax credits should be contingent on the states immediately
mandating targets requiring that all existing residential and commercial
 buildings reduce greenhouse gas emissions by 40 percent below 1990
levels by 2030 and be zero net energy before 2040, and that all new
residential buildings be zero net energy by 2025 and new commercial
buildings be zero net energy by 2030.
Eleventh, the federal government and state governments should establish
and deploy plans to phase out petrochemical agriculture and introduce
organic and ecological agricultural practices and boost regional
agricultural production for local markets over a twenty-year period, with
the goal of moving toward 100 percent organic certification by 2040. The
federal government and state governments should provide deep subsidies
and robust incentives to encourage a speedy transformation.
Twelfth, the federal government and state governments should provide tax
credits and other incentives to encourage farmers to utilize carbon-
farming techniques and to reforest and rewild marginal land to capture
and sequester CO2 from the atmosphere and serve as carbon capture sinks.
The federal government should also reprioritize the use of public lands by
reforesting, where applicable, to capture and sequester CO2 emissions.
Thirteenth, the federal government, states, municipalities, and counties
should prioritize and finance the upgrading of all water systems, sewage
systems, and stormwater drains by 2040 to be resilient to the climate
change–induced hurricanes, storms, and floods that are a growing threat
to public health. In drought-prone areas of the country, measures will need
to be taken to install water storage via cisterns across the built
environment to provide emergency backup access to water if the power
grid were to go down because of a climate event or a cyberattack. Where
applicable, cities should re-municipalize all water-related systems that
have been privatized over the years to ensure public oversight and control
of water.
Fourteenth, the federal government and state, municipal, and county
governments should mandate the embedding of circularity processes into
every supply chain and across every industry by 2030 to dramatically
reduce carbon emissions and build resilience against climate change into
all aspects of the economy, civil society, and governance, and provide
appropriate incentives and penalties.
Fifteenth, the federal government, in tandem with the states, should
redeploy an increasing percentage of military expenditures, without
compromising national or state security, to pay for federal troops and state
 National Guards to manage climate-related disaster response and relief
missions, from first responders to long-term restoration initiatives.
Sixteenth, the federal government should enact legislation to establish a
national green bank that can provide funds to state, county, and municipal
green banks that, in turn, can leverage those funds in securing sufficient
financing and, especially, public and private pension funds and other
investment capital for scaled green infrastructure build-outs. The national
green bank’s provisioning of funds to state, municipal, and county green
banks should be contingent on state and local governing jurisdictions
mandating a target of 50 percent of their electricity generation coming
from solar, wind, and other appropriate renewable energies by 2030 and
100 percent of their electricity coming from renewable energy before
2040.
Seventeenth, the use of union pension fund capital to finance federal, state,
municipal, and county Third Industrial Revolution infrastructure projects
should be conditional on ensuring that unionized workforces are
employed wherever possible. Since only 11 percent of the American
workforce is unionized, all Third Industrial Revolution infrastructure
projects must also protect the right of workers to organize and safeguard
collective bargaining rights. The state, municipal, and county
governments should also provide “just transition” funds for communities
that are economically dependent on the extracting, refining, and
distributing of fossil fuels and should prioritize the transition from these
stranded industries into the new green businesses and employment
opportunities of a Third Industrial Revolution.
Eighteenth, the student generation will need to learn the skills and develop
the talents that will enable them to create new businesses and become
gainfully employed in a Green New Deal economy. The federal
government and state governments should establish service programs
patterned after the Peace Corps, VISTA, and AmeriCorps. These federal-
and state-financed programs—Green Corps, Climate Corps, Conservation
Corps, Infrastructure Corps—will provide a living wage to high school
and college graduates apprenticing with industries in communities across
the country to learn the skills that will be needed to mobilize a smart
twenty-first-century workforce. These new federal- and state-administered
youth apprenticeship organizations will also train a younger generation to
use these newly acquired skills in disaster response and relief missions,
 serving as first responders and in recovery efforts in local communities,
working alongside federal government troops and state National Guards.
Nineteenth, the federal government, states, municipalities, and counties
should prioritize Green New Deal business opportunities in the most
disadvantaged communities and provide appropriate training for the new
employment opportunities that come with the scale-up of the green
infrastructure. Generous tax credits, grants, low-interest loans, and other
incentives to upgrade all public health services should be prioritized to the
poorest communities facing public health risks brought on by climate
change.
Twentieth, to ensure a more fair and just society, more equitable tax laws
should be enacted at the federal, state, and local levels that reduce the vast
disparity between the super-rich and the rest of the population, with the
revenues accrued being used to advance the transition categories that
make up the Green New Deal.
Twenty-first, the various departments and agencies of the federal and state
governments should reprioritize their funding and substantially increase
research and development in all of the areas that accompany the
transformation into green technologies and Third Industrial Revolution
infrastructure deployment. Every level of government should give
particular attention to funding research, development, and deployment in
the hard-to-abate sectors to accelerate the transition from fossil fuel–based
to biological-based processes and products. Governments should harness
the best expertise and talent in public and private universities and research
institutes in joint R&D collaborations to advance the transition into the
green energies and sustainable technologies of a Green New Deal Third
Industrial Revolution.
Twenty-second, the various departments and agencies of the federal
government, in tandem with state governments, should establish an
accelerated time frame for creating the regulations, codes, and standards
to facilitate a seamless integration of broadband, renewable energy power
generation and distribution, autonomous electric and fuel-cell vehicle
transport, zero-emission Internet of Things nodal buildings, and all of the
other regulations, codes, and standards necessary to ensure an
interconnected and uninterrupted smart IoT Third Industrial Revolution
infrastructure functioning across America.
Twenty-third, the US government should join with the European Union, the
 People’s Republic of China, and all other willing nations in a formal
ongoing collaboration to identify, support, and implement the universal
codes, regulations, standards, and incentives and penalties that need to be
put in place to enable both global interconnectivity and transparency in
the deployment and operation of a smart green glocal infrastructure.

In the first six months of the new presidency and US Congress in 2021,
Congress should enact Green New Deal laws, signed by the president, covering
all of these twenty-three initiatives needed to jump-start a twenty-year
emergency build-out of a green zero-emission Third Industrial Revolution
infrastructure across America.

Peer Assembly Governance

We noted earlier that the design and engineering of infrastructures both enable
and constrain the types of business models and forms of governance that
accompany them. Recall that in the case of the First and Second Industrial
Revolutions, the infrastructures were engineered to be centralized, enclosed in
intellectual property, and vertically integrated to create economies of scale in
order to return sufficient profits to investors because of the huge up-front costs
of locating, extracting, shipping, refining, and delivering coal, oil, natural gas,
and petrochemicals to end users. All other sectors, in turn, had to organize their
supply chains and value chains and the production of their goods and services in
a similar fashion because of their total dependence on the same energy sources
and infrastructure dynamics. The temporal/spatial reach of the First Industrial
Revolution infrastructure gave rise to national markets and nation-state
governance to oversee them. The Second Industrial Revolution infrastructure
gave rise to global markets and international organizations like the United
Nations, the World Bank, the OECD, and the World Trade Organization to
comanage governance alongside nation-states.
As described early on, the Third Industrial Revolution infrastructure comes
with a different design and engineering construction. The platform is weighted
toward being distributed in operation rather than centralized, and the system
itself is optimized if it remains open and transparent to create the network effect
rather than being closed off in intellectual property. Last, the distributed open
and transparent nature of the system is most efficient and productive if its
operations are laterally scaled rather than vertically integrated.
 Giant internet companies, early on, seized hold of many of the platforms in
vertically scaled global monopolies, but that is not likely to last, because they
ultimately cannot compete with the millions of high-tech small- and medium-
sized enterprises blockchained across competencies and operating in
cooperatives overseen by commons governance. The latter’s organizational style
is far more agile and functions with far less overhead, while ensuring that the
revenue generated stays within the cooperative enterprises and the communities
where they reside, rather than much of it being siphoned off in the form of
profits to outside investors.
To ensure a fair playing field, however, the federal government should
vigorously enforce antitrust laws, applying the same standards in regulating the
activity of ICT companies, electricity companies, and transport and logistics
companies that have been used in the past to secure an open commercial space
for enterprises to thrive.
The distributed, open-sourced, and laterally scaled design and engineering
principles built into the Third Industrial Revolution infrastructure favor an
accompanying distributed, open, transparent, and laterally scaled regulatory
regime to facilitate and coordinate this new approach to commerce. Our twenty
years of experience in the European Union suggest that the codes, regulations,
and standards that need to be put in place to operate a green infrastructure across
the continent will remain the responsibility of the member states and the
European Commission. However, the build-out and scale-up of the Green New
Deal economy will ultimately be the responsibility of the 350 governing regions
and cities of Europe, with each customizing the infrastructure to its own goals,
deliverables, and aspirations within the confines of the EU-wide codes,
regulations, and standards, allowing them to interconnect across borders in a
coherent continental smart infrastructure.
This is not FDR’s New Deal, with the federal government building and
operating gigantic dams to generate and distribute cheap hydroelectricity across
America but, rather, a distributed Green New Deal for the twenty-first century
centered around locally harvested renewable energies and managed by regional
infrastructures that connect across borders like Wi-Fi. In the twenty-first century,
every state, city, and county in America, 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 Third Industrial Revolution infrastructure works most effectively and
efficiently if it’s laterally scaled and connects a multitude of small players. This
is not a theoretical conjecture. As mentioned in chapter 2, the four giant power
and electricity companies in Germany learned this lesson the hard way and were
left with billions of dollars in stranded assets in less than twelve years from the
time that solar and wind energy came online. Recall that in Germany, small
players—farmers, SMEs, and neighborhood associations—established electricity
cooperatives, secured bank loans, and installed solar- and wind-energy-
generating technologies on-site, using some of the green electricity off-grid and
selling the surplus back to the grid. Today, nearly 25 percent of all the electricity
powering Germany comes from solar and wind, and much of that green energy is
generated by small cooperatives.18 The Big Four power and electricity
companies are generating less than 5 percent of the green energies of the twenty-
first century and have, for the most part, been eliminated from renewable power
generation.19
Distributed energy in every region goes hand in hand with distributed
governance. This is what we mean by “power to the people”—fifty state
economies made up of smart high-tech SMEs organized into laterally scaled
cooperatives, all connected to a smart green Third Industrial Revolution
infrastructure, managing, powering, and moving their goods and services across
value chains at low fixed costs, near-zero marginal costs, and with a near-zero
carbon footprint. While each state will be charged with the task of building out
and scaling up a Third Industrial Revolution, the goals and deliverables in each
jurisdiction will be customized to the specific needs of that state. But to be
effective, all the states will need to connect across their borders and collaborate
on a smart national power grid to create lateral economies of scale and network
effects.
With this consideration in mind, the National Governors Association, the
National Conference of State Legislatures, the United States Conference of
Mayors, and the National Association of Counties should pass resolutions
calling on each state to voluntarily establish Green New Deal “peer assemblies”
made up of elected officials of the cities and counties and representatives from
local chambers of commerce, labor unions, economic development agencies,
public and private universities, and civic organizations. These peer assemblies,
overseen by state, municipal, and county governments, will be tasked with
establishing Green New Deal roadmaps to transition their economies and
communities into the green era. It’s not necessary for every state to sign on from
the get-go, but at least to have a number of first-movers step forward in order to
create a threshold effect. Other states will likely come onboard quickly as public
pressure builds for a Green New Deal in their communities.
The powers that be in the nation’s capital might look askance at the states,
municipalities, and counties grabbing hold of the planning and deployment of
the smart green infrastructure transformation for the country, but that’s already
begun. A quiet revolution has been occurring over the past several years below
the national radar screen in states across the country. While the nation’s capital
wasn’t looking, twenty-nine states and three territories adopted Renewable
Portfolio Standards (RPS) requiring that a mandated percentage of the electricity
sold by their utilities come from renewable energy sources.20 The states are
backing up their RPS with renewable energy credits to encourage both wind and
solar installations.
Even though the United States government has dropped out of the Paris
Agreement on climate change, nineteen states and Puerto Rico have thus far
agreed to comply with the protocol, and other states are expected to soon
follow.21 A number of governors are currently developing plans to get 100
percent of their electricity from zero-carbon sources. California and Hawaii have
already established a 2045 deadline to meet this mandate, and the governors of
Colorado, New York, New Jersey, and Illinois have pledged to follow suit.22 The
states are on the move.
Here’s what the federal government can do to maintain the momentum.
Lawmakers on Capitol Hill should agree to provide each state with a one-off $60
million grant to cover a three-year period, with agreement by each state to match
it. These funds should be used exclusively by state governments to establish and
staff an operational center whose sole purpose is to organize and coordinate peer
assemblies across their cities and counties for the express purpose of preparing
Green New Deal roadmaps customized to each locality’s goals, needs, and
existing green sustainability programs and initiatives.
Again, while the federal government provides some infrastructure funding,
states, municipalities, and counties are financially responsible for 75 percent of
it. The infrastructure deployment in a federal republic like the United States is,
for the most part, driven by each of the states. Anyone who is unaware of this
and believes that the federal government is going to unilaterally orchestrate an
infrastructure transition and impose it on the states will be in for a rude
awakening.
The concept of state oversight provides the ideal governing framework for
building out a distributed Third Industrial Revolution. From the very beginning
of the United States of America, the states and their citizens have zealously
guarded what they regard as their fundamental right to govern as they choose
and have been wary of federal government encroachment on their freedoms. At
the same time, states are always looking over their shoulders at their fellow
states in a competitive race to be Best in Show, bringing new business
opportunities, employment, and other benefits to their residents. Now that
America’s Big Three states of New York, California, and Texas are in a race to a
green economy and society, with all the attendant benefits, other states are likely
to quickly jump into the game. They won’t need to be forced against their will.
We’ve come to realize in the European Union that the distributed nature of
the Third Industrial Revolution infrastructure makes its speedy adoption and
scaling more likely if it is conceptualized and introduced by the communities
and regions where it will be deployed. Still, the states will have to work with
each other, and with the federal government, to determine the codes, regulations,
and standards of operations that will need to be put in place to ensure that the
distributed green infrastructure can be quickly installed and connected across
governing jurisdictions.
The key to a distributed Green New Deal will be the scaling up of energy
service companies—ESCOs—and financial mechanisms for their deployment in
all fifty states. Toward this end, following the 2020 national elections, the
National Governors Association, the National Conference of State Legislatures,
the United States Conference of Mayors, and the National Association of
Counties should convene a weeklong emergency conference bringing together
the key industries and businesses—from SMEs to Fortune 500 companies—
whose competencies will be necessary to build out and scale up a Third
Industrial Revolution infrastructure. The competencies should include the ICT
sector, the telecom sector, the electronics industry, electric power utilities, the
transport and logistics industries, the real estate sector, the facilities management
sector, the construction sector, the manufacturing industries, the agricultural and
life sciences sectors, and the travel and tourism industry, alongside
representatives from the national financial, banking, and insurance communities.
The purpose of the national emergency conference of states, municipalities,
and counties, and industries across all of the sectors of the economy, is to
establish the ESCO business model and to set up state and local green banks to
finance the development of Third Industrial Revolution infrastructures.
As of 2017, the global ESCO market was approximately $15 billion. It is
expected to grow at a compound annual growth rate of 8.3 percent and amount
to a $30.8 billion market by 2026.23 Although this is an estimable growth rate in
normal times, it is inadequate to the task of transforming the US and global
infrastructure into a zero-emission era, given the time constraints imposed by
rapidly escalating climate change.
What’s needed is tenfold growth over a ten-year period, comparable to
America’s World War II mobilization from a peacetime economy to a wartime
economy. Now, as then, all the industries, sectors, and competencies that would
need to come together—this time to form ESCOs operating within and across all
fifty states—already exist. They merely need to regroup across their
competencies under the umbrella of the new ESCO performance-contracting
business model.
Generous tax credits and a thoughtful streamlining of codes, regulations, and
standards to speed up the scale of the infrastructure build-out in municipalities,
counties, and states will be essential to moving forward—on a wartime-like
footing—in the shift to the new business model.
Those who would argue against extending generous tax credits should be
reminded that each year billions of dollars in tax credits and other incentives are
dished out by states and localities to subsidize sports stadiums and conference
centers and to encourage companies to locate industrial plants and commercial
complexes in their communities in exchange for a few thousand jobs here and
there—with a much smaller return to the economy and tax base. States and
localities would be far better served by issuing state and local tax credits to
accelerate the transition into a smart green zero-emission economy, with the vast
opportunities that would accrue to SMEs and a redeployment of the workforce in
every community.
From our experience in the EU with establishing peer assemblies, the
optimum is three hundred citizens within any given region participating ad hoc
and providing input and feedback at every stage of engagement. Peer assemblies
are not focus groups or stakeholder groups but rather a cross-section of the
public who will be intimately involved in the ongoing deliberations and the
preparation of the proposals and initiatives that will be incorporated into their
jurisdiction’s Green New Deal roadmap.
The governor, mayors, and county executives become the facilitators and are
responsible both for selecting the cross-section of participants and for overseeing
the operations of the peer assemblies in their respective jurisdictions.
Each peer assembly will want to reach out and secure technical support. The
states’ public universities might be tasked with bringing together professional
and technical talent from both their own institutions and private universities,
community colleges, trade and technical institutes, think tanks, research
institutes, and local charitable foundations to provide valuable expertise from
across the academic and professional disciplines.
Within six months of establishing Green New Deal peer assemblies, the
governor and legislature of each state should convene their own weeklong
emergency conference with several thousand city and county peer assembly
representatives in attendance. The conference should cover all the various
aspects of a Green New Deal mobilization, including the preparation of city and
county roadmaps, deployment and financing, and best practices and expert
technical assistance from across the state and beyond.
The Green New Deal begins with preparing a detailed Third Industrial
Revolution roadmap, which typically takes ten months. City and county peer
assemblies should each prepare their own roadmap, congruent with the state’s.
The success or failure of a roadmap depends on whether the process itself is
viewed from its inception as a truly collaborative, open, and cross-disciplinary
exercise. It’s recommended that every peer selected by cities and counties sign a
socially responsible ethics agreement to collaborate rather than compete and to
act impartially rather than lobby for a special interest or cause. The peers need to
come to the task with a civic-minded community spirit if they are to succeed.
Roadmaps create a community esprit de corps—a feeling among the peers that
they are engaged in something bigger than themselves that will deeply affect
their families, communities, and generations yet to come.
The chairpersons of city and county government peer assemblies should
meet periodically with the governor’s office and the state legislature to report on
progress in their roadmap deliberations and receive feedback and assistance.
After the ten-month process, each municipality and county peer assembly will
publish an extensive roadmap detailing its customized Green New Deal plan and
next steps for initiating financing and local deployment of green infrastructure
megaprojects. They will also share their views on the codes, regulations,
standards, incentives, and penalties that need to be forthcoming from the state
legislature and governor’s office to expedite a statewide transition into the Green
New Deal Third Industrial Revolution paradigm.
The roadmap mission is not just to create a grab bag of favorite green
projects but rather to develop a comprehensive and systemic Third Industrial
Revolution infrastructure plan that can be deployed across the state over a period
of two decades. This integrative approach to scaling infrastructure is what’s been
sorely missing in Green New Deal proposals to date. It’s important to visualize
the build-out of a Third Industrial Revolution as a statewide multigenerational
construction site that will evolve over time and branch out in many directions as
circumstances dictate. Failure to understand the mission will lead to
fragmentation and ultimately descend back to small, siloed favorite green
projects without a transformational impact. The three Third Industrial
Revolution roadmaps prepared and now being deployed in the industrial regions
of Hauts-de-France, the twenty-three cities of the Metropolitan Region of
Rotterdam and The Hague, and the Grand Duchy of Luxembourg are open-
source and available to everyone.24
Many cities and counties across the United States have prepared green
sustainability roadmaps, and a few have even involved some form of peer
assembly in the deliberations; these localities will be an important source of
expertise in sharing best practices. None of the already existing green
development plans in play in municipalities, counties, and at the state level are
discarded in the Third Industrial Revolution roadmap process and subsequent
deployment; rather, they are embedded into the green infrastructure that connects
these projects in a seamless new economic paradigm. Absent this unifying vision
across each city, county, and state, we are back to thousands of well-meaning
green programs that remain attached to the dying fossil fuel infrastructure of the
twentieth century.
City, county, and state governments might want to establish websites to share
their Green New Deal roadmap deliberations and deployments in real time
across America. Engendering a nationwide dialogue on best practices and
accompanying opportunities and challenges can spin off multiple collaborations
across traditional political borders, creating a wholly new political dynamic
beyond voting for representatives at election time. This is the very nature of peer
assembly governance.
Peer assemblies continue to work beyond the roadmap stage through the
entire scale-up of a zero-emissions green infrastructure transition, with peers
rotating in and out of the process and across generations, ensuring continuity
beyond the turnover of elected officials every two or four years, guaranteeing
that the peer process itself is not held hostage by whatever political party or
elected official is holding office.
 The existential magnitude of the climate change crisis is of a kind humanity
has never before confronted. It requires a multigenerational form of commons
governance that can continue into the indefinite future. 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. Cities,
counties, states, and the federal government will all have to be engaged in a
political process without a closure date.
We have found that in the seven regional roadmap processes and subsequent
deployments we have been involved in, that although governments establish peer
assemblies, cabinet ministries, government bureaucracies, and special interests
are often uncomfortable with and hostile to sharing their turf. They may be
reluctant to say so publicly (who, in principle, wants to say they are opposed to
peer assemblies?) but they often find subtle ways to undermine the process, the
recommendations, and the deployments. They are far more comfortable with
focus groups and stakeholder groups that are often used and abused to help
bolster their executive and legislative agendas.
On the other hand, it is the executive and legislative branches of municipal,
county, and state governments that initiate and oversee peer assemblies who
have the ultimate responsibility of converting their recommendations, projects,
initiatives, and proposals into laws, protocols, and initiatives. Peer assemblies
are informal bodies that bring the voice of the public into the process and
encourage elected officials and government agencies to be more responsive and
integrative in their missions and assignments and to be more systemic and
attentive to the multiple perspectives rising up from their communities. Peer
assemblies lateralize governance by bringing the public into continuous
engagement with government to advance the commonweal. Their presence
requires a new generation of elected officials and government employees who
are comfortable with informal sharing of governance between elections rather
than exercising an exclusive territorial reign.
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
moments—local organizations, NGOs, religious bodies, schools, neighborhood
associations, and the business sector. While disaster preparedness and
emergencies are overseen by elected and appointed officials, disasters are often
so unexpected and all-consuming that they require the full and active
engagement of everyone, sometimes for weeks, months, and even years.
Between disasters, civil society organizations and the business community are in
continuous collaboration with public authorities, learning from past emergencies;
sharing best practices; integrating new ideas, programs, and response
mechanisms into their planning; and preparing for emergencies yet to come in an
ongoing conversation around the mission of securing the commonweal.
Climate change now puts every community in the world in harm’s way in a
continuous disaster mode. This is the truth of the matter. Peer assemblies will
soon become a necessity across the world if communities are to come to grips
with a runaway climate. Former California governor Jerry Brown, in his last few
days in office, got it right when he said that the wild changes in the weather are
“the new abnormal.”25
A final observation. Without peer assemblies, citizens everywhere in
America and around the world are going to feel less listened to, more abandoned
and left to their own wits, and deeply alienated from their governments. That
combination of fear and isolation, if left to simmer, is potentially explosive and
could easily tear apart the very fabric of civilized life. Peer assemblies are a way
to channel a community’s sense of powerlessness in the face of climate change
into a sense of shared responsibility for the biosphere that we will need in the
years ahead and centuries to come.
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 thirty years, between 1860 and 1890. The juvenile infrastructure for the
Second Industrial Revolution was built out in twenty-five years, between 1908
and 1933. The shorter time was 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. With this in mind, the Third Industrial Revolution
infrastructure can likely be built out in twenty 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.
Please do not let anyone tell you this can’t be done. By 2040, 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 and nationwide
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 the 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.
 ACKNOWLEDGMENTS

I would like to express my deep gratitude and thanks to my colleagues Daniel

Christensen and Claudia Salvador for their stellar contribution to the book. Their
research skills, sensitivity to details, and command of the language show up on
every page of the book. Their dedication to the task and commitment to tight
deadlines, which often went into the evenings and on weekends, kept the project
on schedule. I would also like to thank my close friend and colleague Angelo
Consoli for his advice on sections of the book dealing with the history of Green
New Deal–style transitions in the European Union.
I would also like to thank my editor Tim Bartlett, who quickly embraced the
project and moved mountains at St. Martin’s Press to spirit the book along its
journey from conception to final copy. Tim’s sage editorial suggestions and edits
helped smooth out the wrinkles and fine-tune the text. I would also like to
express my appreciation to India Cooper for the excellent copy editing that is
always essential to the publishing process. Thanks also to Dante Calfayan,
Katherine Jossi, and John Marino for their research assistance.
To my literary agent, Meg Thompson, thank you! Her enthusiasm and wise
counsel kept all of us on mission throughout the process. Thanks also to Sandy
Hodgman, my foreign rights literary agent, for engaging our publishers in
markets around the world.
Finally, my deep thanks to my wife, Carol Grunewald, for suggesting I write
this book. Many of the themes in the book come from countless conversations
over thirty years together that have shaped our common understanding of the
world we inhabit and our hopes for the future of humanity and our fellow
creatures with whom we share this Earth.
 NOTES

Please note that some of the links referenced throughout this work may no
longer be active.
INTRODUCTION
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CHAPTER 1
1. Brian Merchant, “With a Trillion Sensors, the Internet of Things Would Be the ‘Biggest Business in the
History of Electronics,’” Motherboard, October 29, 2013,
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business-in-the-history-of-electronics (accessed February 6, 2019).
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February 6, 2019).
3. Robert U. Ayres and Benjamin Warr, The Economic Growth Engine: How Energy and Work Drive
Material Prosperity (Northampton, MA: Edward Elgar Publishing, 2009), 334–37; John A. “Skip”
Laitner, “Linking Energy Efficiency to Economic Productivity: Recommendations for Improving the
Robustness of the U.S. Economy,” WIREs Energy and Environment 4 (May/June 2015): 235.
4. John A. “Skip” Laitner et al., The Long-Term Energy Efficiency Potential: What the Evidence Suggests
(Washington, DC: American Council for an Energy-Efficient Economy, 2012), 65.
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& Energy,” https://www.globalcovenantofmayors.org/about/ (accessed February 9, 2019).
6. David E. Nye, Electrifying America: Social Meanings of a New Technology, 1880–1940 (Cambridge,
MA: MIT Press, 1991), 239–321.
7. Xavier Sala-i-Martin, chief adviser, and Klaus Schwab, ed., The Global Competitiveness Report 2017–
2018 (Geneva: World Economic Forum, 2017), 329.
8. Jonathan Woetzel et al., Bridging Global Infrastructure Gaps: Has the World Made Progress?
McKinsey Global Institute report, 2017, 5.
9. Sala-i-Martin and Schwab, The Global Competitiveness Report 2017–2018, 303.
10. The White House, “Remarks by the President at a Campaign Event in Roanoke, Virginia,” July 13,
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19. “First Telegraph Messages from the Capitol,” US Senate,
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20. Lee Ann Potter and Wynell Schamel, “The Homestead Act of 1862,” Social Education 61, no. 6
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21. Richard Walker and Gray Brechin, “The Living New Deal: The Unsung Benefits of the New Deal for
the United States and California,” UC Berkeley Institute for Research on Labor and Employment
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22. Work Projects Administration, Final Report on the WPA Program, 1935–43 (Washington, DC: USGPO,
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24. Erica Interrante and Bingxin Yu, Contributions and Crossroads: Our National Road System’s Impact on
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30. Benny Evangelista, “Alphabet, Toronto Partner to Create Tech-Infused Neighborhood,” San Francisco
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Infused-Neighborhood.html (accessed February 22, 2019).
31. North Carolina State University, “Mayday 23: World Population Becomes More Urban Than Rural,”
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32. Jim Balsillie, “Sidewalk Toronto Has Only One Beneficiary, and It Is Not Toronto,” Globe and Mail,
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33. Ibid.
34. Ibid.
35. Vipal Monga and Jacquie McNish, “Local Resistance Builds to Google’s ‘Smart City’ in Toronto,” Wall
Street Journal, August 1, 2018, https://www.wsj.com/articles/local-resistance-builds-to-googles-smart-
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36. Ibid.; Ava Kofman, “Google’s ‘Smart City of Surveillance’ Faces New Resistance in Toronto,” The
Intercept, November 13, 2018, https://theintercept.com/2018/11/13/google-quayside-toronto-smart-
city/ (accessed February 2, 2019).
37. Jennings Brown, “Privacy Expert Resigns from Alphabet-Backed Smart City Project over Surveillance
Concerns,” Gizmodo, October 23, 2018, https://gizmodo.com/privacy-expert-resigns-from-alphabet-
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38. “Les Hauts-de-France envoient du rev3,” Région Hauts-de-France, October 18, 2018,
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CHAPTER 2
1. “2020 Climate & Energy Package,” European Commission,
https://ec.europa.eu/clima/policies/strategies/2020_en (accessed February 20, 2019).
2. “About the Group,” Green New Deal Group, https://www.greennewdealgroup.org/?page_id=2
(accessed February 9, 2019).
3. New Economics Foundation, A Green New Deal: Joined-Up Policies to Solve the Triple Crunch of the
Credit Crisis, Climate Change and High Oil Prices, July 20, 2008,
https://neweconomics.org/2008/07/green-new-deal (accessed March 12, 2019).
4. Katy Nicholson, ed., Toward a Transatlantic Green New Deal: Tackling the Climate and Economic
Crises, prepared by the Worldwatch Institute for the Heinrich Böll Foundation (Brussels: Heinrich-
Böll-Stiftung, 2009), 6 (quoted).
5. “Countdown to Copenhagen: Germany’s Responsibility for Climate Justice,” Oxfam Deutschland,
November 2009, https://www.oxfam.de/system/files/20091111_Programm.pdf (accessed February 7,
2019).
6. Philipp Schepelmann et al., A Green New Deal for Europe: Towards Green Modernisation in the Face
of Crisis, ed. Jacki Davis and Geoff Meade, vol. 1 (Brussels: Green European Foundation, 2009).
7. Edward B. Barbier, Rethinking the Economic Recovery: A Global Green New Deal, report prepared for
the United Nations Environment Programme, April 2009,
https://www.cbd.int/development/doc/UNEP-global-green-new-deal.pdf (accessed March 12, 2019).
8. Ibid., 16.
9. Enric Ruiz-Geli and Jeremy Rifkin, A Green New Deal: From Geopolitics to Biosphere Politics,
bilingual ed. (Barcelona, Basel, and New York: Actar, 2011).
10. New Deal 4 Europe, “Petition to the European Parliament,” http://www.newdeal4europe.eu/en/petition
(accessed February 5, 2019).
11. Jill Stein and Ajamu Baraka campaign, “The Green New Deal,” 2016,
https://d3n8a8pro7vhmx.cloudfront.net/jillstein/pages/27056/attachments/original/1478104990/green-
new-deal.pdf?1478104990 (accessed March 12, 2019).
12. Greg Carlock and Emily Mangan, A Green New Deal: A Progressive Vision for Environmental
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70. Ibid., 7.
CHAPTER 3
1. Isabella Burch and Jock Gilchrist, Survey of Global Activity to Phase Out Internal Combustion Engine
Vehicles, ed. Ann Hancock and Gemma Waaland, Center for Climate Change, September 2018
revision, https://climateprotection.org/wp-content/uploads/2018/10/Survey-on-Global-Activities-to-
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2. Alex Longley, “BofA Sees Oil Demand Peaking by 2030 as Electric Vehicles Boom,” Bloomberg,
January 22, 2018, https://www.bloomberg.com/news/articles/2018-01-22/bofa-sees-oil-demand-
peaking-by-2030-as-electric-vehicles-boom (accessed March 24, 2019); Batteries Update: Oil Demand
Could Peak by 2030, Fitch Ratings, 2018,
http://cdn.roxhillmedia.com/production/email/attachment/660001_670000/Fitch_Oil%20Demand%20Could%20Peak%2
(accessed March 24, 2019), 2.
3. Eric Garcetti, L.A.’s Green New Deal: Sustainable City pLAn, 2019,
http://plan.lamayor.org/sites/default/files/pLAn_2019_final.pdf (accessed May 9, 2019), 11.
4. Ron Bousso and Karolin Schaps, “Shell Sees Oil Demand Peaking by Late 2020s as Electric Car Sales
Grow,” Reuters, July 27, 2017, https://www.reuters.com/article/us-oil-demand-shell/shell-sees-oil-
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5. James Osborne, “Peak Oil Demand, a Theory with Many Doubters,” Houston Chronicle, March 9,
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6. “Daimler Trucks Is Connecting Its Trucks with the Internet,” Daimler Global Media Site, March 2016,
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7. Ibid.
8. Steven Montgomery,”The Future of Transportation Is Driverless, Shared and Networked,” Ford Social,
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9. Barbora Bondorová and Greg Archer, Does Sharing Cars Really Reduce Car Use? Transport &
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10. Lawrence D. Burns, “Sustainable Mobility: A Vision of Our Transport Future,” Nature 497 (2013):
182, doi:10.1038/497181a.
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24, 2019).
12. Burns, “Sustainable Mobility,” 182.
13. Gunnela Hahn et al., Framing Stranded Asset Risks in an Age of Disruption, Stockholm Environment
Institute, February 14, 2018, https://www.sei.org/publications/framing-stranded-assets-age-disruption/
(accessed March 24, 2019), 31.
14. Colin McKerracher, Electric Vehicles Outlook 2018, BloombergNEF, https://about.bnef.com/electric-
vehicle-outlook/ (accessed January 16, 2019).
15. Ibid.
16. Ibid.
17. Ibid.; Hahn et al., Framing Stranded Asset Risks in an Age of Disruption, 12.
18. Henbest et al., New Energy Outlook 2018.
19. Wood Mackenzie, The Rise and Fall of Black Gold, 2018, https://www.qualenergia.it/wp-
content/uploads/2017/10/Thought_Leadership___Peak_Oil_Demand_LowRes.pdf (accessed March 23,
2019), 4.
20. James Arbib and Tony Seba, Rethinking Transportation 2020–2030: The Disruption of Transportation
and the Collapse of the Internal-Combustion Vehicle and Oil Industries, a RethinkX Sector Disruption
Report, May 2017,
https://static1.squarespace.com/static/585c3439be65942f022bbf9b/t/591a2e4be6f2e1c13df930c5/1494888038959/Rethin
(accessed March 23, 2019), 7.
21. Ibid., 7.
22. Ibid.
23. INRIX, “Los Angeles Tops INRIX Global Congestion Ranking,” news release, 2017,
http://inrix.com/press-releases/scorecard-2017/ (accessed March 23, 2019).
24. Arbib and Seba, Rethinking Transportation 2020–2030, 8.
25. Ibid., 15, 32.
26. Longley, “BofA Sees Oil Demand Peaking by 2030 as Electric Vehicles Boom”; Bousso and Schaps,
“Shell Sees Oil Demand Peaking by Late 2020s.”
27. Tom DiChristopher, “Big Oil Is Sowing the Seeds for a ‘Super-Spike’ in Crude Prices Above $150,
Bernstein Warns,” CNBC, July 6, 2018, https://www.cnbc.com/2018/07/06/big-oil-sowing-the-seeds-
for-crude-prices-above-150-bernstein-warns.html (accessed May 10, 2019).
28. Ibid.
29. Assembly Bill No. 3232, Chapter 373 (Cal. 2018),
https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201720180AB3232 (accessed
March 23, 2019).
30. “Zero Net Energy,” California Public Utilities Commission, http://www.cpuc.ca.gov/zne/ (accessed
February 8, 2019).
31. Yolande Barnes, Paul Tostevin, and Vladimir Tikhnenko, Around the World in Dollars and Cents,
Savills World Research, 2016, http://pdf.savills.asia/selected-international-research/1601-around-the-
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32. Mike Betts et al., Global Construction 2030: A Global Forecast for the Construction Industry to 2030,
Global Construction Perspectives and Oxford Economics, 2015,
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33. Heidi Garrett-Peltier, Employment Estimates for Energy Efficiency Retrofits of Commercial Buildings,
University of Massachusetts Political Economy Research Institute, 2011,
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Workers and Their Unions to ‘Greening’ the Built Environment in Germany, the United Kingdom and
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Work in a Chilly Climate,” Toronto, November 2011, http://warming.apps01.yorku.ca/wp-
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35. The Internet of Things Business Index: A Quiet Revolution Gathers Pace, Economist Intelligence Unit,
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36. Jeremy Rifkin, The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons,
and the Eclipse of Capitalism (New York: Palgrave Macmillan, 2014).
37. Haier, “Haier Group Announces Phase 2.0 of Its Cornerstone ‘Rendanheyi’ Business Model,” Cision
PR Newswire, September 21, 2015, https://www.prnewswire.com/news-releases/haier-group-
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38. Jim Stengel, “Wisdom from the Oracle of Qingdao,” Forbes, November 13, 2012,
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39. Garrett-Peltier, Employment Estimates for Energy Efficiency Retrofits of Commercial Buildings, 2.
40. Kevin Muldoon-Smith and Paul Greenhalgh, “Understanding Climate-related Stranded Assets in the
Global Real Estate Sector,” in Stranded Assets and the Environment: Risk, Resilience and Opportunity,
ed. Ben Caldecott (London: Routledge, 2018), 154; Kevin Muldoon-Smith and Paul Greenhalgh,
“Suspect Foundations: Developing an Understanding of Climate-Related Stranded Assets in the Global
Real Estate Sector,” Energy Research & Social Science 54 (August 2019): 62.
41. M. J. Kelly, Britain’s Building Stock—A Carbon Challenge (London: DCLG, 2008).
42. Ben Caldecott, “Introduction: Stranded Assets and the Environment,” in Caldecott, Stranded Assets and
the Environment, 6.
43. “More Than 250 US Mayors Aim at 100% Renewable Energy by 2035,” United Nations, June 28,
2017, https://unfccc.int/news/more-than-250-us-mayors-aim-at-100-renewable-energy-by-2035
(accessed March 24, 2019).
44. Muldoon-Smith and Greenhalgh, “Understanding Climate-related Stranded Assets in the Global Real
Estate Sector,” 157.
45. Ibid., 158.
46. Ibid., 159.
47. Lara Ettenson, “U.S. Clean Energy Jobs Surpass Fossil Fuel Employment,” NRDC, February 1, 2017,
https://www.nrdc.org/experts/lara-ettenson/us-clean-energy-jobs-surpass-fossil-fuel-employment
(accessed February 25, 2019); US Department of Energy, 2017 U.S. Energy and Employment Report,
https://www.energy.gov/downloads/2017-us-energy-and-employment-report (accessed March 24,
2019).
48. Ettenson, “U.S. Clean Energy Jobs Surpass Fossil Fuel Employment.”
49. Brookings Institution, Advancing Inclusion Through Clean Energy Jobs, April 2019,
https://www.brookings.edu/wp-content/uploads/2019/04/2019.04_metro_Clean-Energy-
Jobs_Report_Muro-Tomer-Shivaran-Kane.pdf#page=14.
50. Ibid.
51. “Mayor Bowser Opens the DC Infrastructure Academy,” press release, March 12, 2018,
https://dc.gov/release/mayor-bowser-opens-dc-infrastructure-academy.
52. Fabio Monforti-Ferrario et al., Energy Use in the EU Food Sector: State of Play and Opportunities for
Improvement, ed. Fabio Monforti-Ferrario and Irene Pinedo Pascua, European Commission Joint
Research Centre, 2015,
http://publications.jrc.ec.europa.eu/repository/bitstream/JRC96121/ldna27247enn.pdf (accessed March
23, 2019), 7.
53. Pierre J. Gerber et al., Tackling Climate Change Through Livestock: A Global Assessment of Emissions
and Mitigation Opportunities (Rome: Food and Agriculture Organization of the United Nations, 2013),
xii.
54. Food and Agricultural Organization of the United Nations, Livestock and Landscapes, 2012,
http://www.fao.org/3/ar591e/ar591e.pdf (accessed March 23, 2019), 1.
55. Timothy P. Robinson et al., “Mapping the Global Distribution of Livestock,” PLoS ONE 9, no. 5
(2014): 1, doi:10.1371/journal.pone.0096084; Susan Solomon et al., AR4 Climate Change 2007: The
Physical Science Basis, Intergovernmental Panel on Climate Change,
https://www.ipcc.ch/report/ar4/wg1/ (accessed March 24, 2019), 33.
56. H. Steinfeld et al., Livestock’s Long Shadow (Rome: FAO, 2006), xxi.
57. Emily S. Cassidy et al., “Redefining Agricultural Yields: From Tonnes to People Nourished per
Hectare,” Environmental Research Letters 8, no. 3 (2013): 4, doi:10.1088/1748-9326/8/3/034015.
58. Janet Ranganathan et al., “Shifting Diets for a Sustainable Food Future,” World Resources Institute
Working Paper, 2016,
https://www.wri.org/sites/default/files/Shifting_Diets_for_a_Sustainable_Food_Future_0.pdf (accessed
March 23, 2019), 21.
59. Alyssa Newcomb, “From Taco Bell to Carl’s Jr., Grab-and-Go Vegetarian Options Are on the Rise,”
NBC News, February 6, 2019, https://www.nbcnews.com/business/consumer/taco-bell-mcdonald-s-
vegetarian-options-are-rise-n966986 (accessed March 6, 2019); Danielle Wiener-Bronner, “Burger
King Plans to Roll Out Impossible Whopper Across the United States,” CNN, April 29, 2019,
https://www.cnn.com/2019/04/29/business/burger-king-impossible-rollout/index.html (accessed May 9,
2019).
60. Monforti-Ferrario et al., Energy Use in the EU Food Sector, 7.
61. Helga Willer and Julia Lernoud, eds., The World of Organic Agriculture: Statistics and Emerging
Trends 2018, FiBL and IFOAM–Organics International,
https://shop.fibl.org/CHde/mwdownloads/download/link/id/1093/?ref=1 (accessed March 24, 2019).
62. Organic Trade Association, “Maturing U.S. Organic Sector Sees Steady Growth of 6.4 Percent in
2017,” news release, May 18, 2018, https://ota.com/news/press-releases/20236 (accessed February 14,
2019).
63. Karlee Weinmann, “Thanks to Co-op, Small Iowa Town Goes Big on Solar,” Institute for Local Self-
Reliance, February 3, 2017, https://ilsr.org/thanks-to-co-op-small-iowa-town-goes-big-on-solar
(accessed February 14, 2019).
64. Debbie Barker and Michael Pollan, “A Secret Weapon to Fight Climate Change: Dirt,” Washington
Post, December 4, 2015, https://www.washingtonpost.com/opinions/2015/12/04/fe22879e-990b-11e5-
8917-653b65c809eb_story.html?utm_term=.b2aa65cc4e76 (accessed March 7, 2019).
65. Jeff Stein, “Congress Just Passed an $867 Billion Farm Bill. Here’s What’s in It,” Washington Post,
December 12, 2018, https://www.washingtonpost.com/business/2018/12/11/congresss-billion-farm-bill-
is-out-heres-whats-it/?utm_term=.042ac7ab46fa (accessed March 6, 2019).
66. April Reese, “Public Lands Are Critical to Any Green New Deal,” Outside, April 8, 2019,
https://www.outsideonline.com/2393257/green-new-deal-public-lands-clean-energy (accessed April 8,
2019).
67. Matthew D. Merrill et al., Federal Lands Greenhouse Gas Emissions and Sequestration in the United
States: Estimates for 2005–14, US Geological Survey, 2018,
https://pubs.usgs.gov/sir/2018/5131/sir20185131.pdf (accessed May 9, 2019).
68. Ibid.
69. Ibid.
70. Marie-Jean-Antoine-Nicolas Caritat, Marquis de Condorcet, Outlines of an Historical View of the
Progress of the Human Mind (Philadelphia: M. Carey, 1796) https://oll.libertyfund.org/titles/1669
(accessed May 11, 2019).
CHAPTER 4
1. J.-F. Mercure et al., “Macroeconomic Impact of Stranded Fossil Fuel Assets,” Nature Climate Change
8, no. 7 (2018): 588–93, doi:10.1038/s41558-018-0182-1.
2. “Declaration of the European Parliament on Establishing a Green Hydrogen Economy and a Third
Industrial Revolution in Europe Through a Partnership with Committed Regions and Cities, SMEs and
Civil Society Organisations,” 2007, https://eur-lex.europa.eu/legal-content/EN/TXT/?
uri=CELEX%3A52007IP0197 (accessed March 23, 2019).
3. “Directive 2009/28/EC of the European Parliament and of the Council on the Promotion of the Use of
Energy from Renewable Sources,” Official Journal of the European Union (2009): L 140/17.
4. “Renewable Energy: Are Feed-in Tariffs Going out of Style?” Power-Technology, January 18, 2017,
https://www.power-technology.com/features/featurerenewable-energy-are-feed-in-tariffs-going-out-of-
style-5718419/ (accessed March 24, 2019).
5. David Coady et al., “How Large Are Global Fossil Fuel Subsidies?” World Development 91 (March
2017): 11, doi:10.1016/j.worlddev.2016.10.004.
6. Kingsmill Bond, 2020 Vision: Why You Should See the Fossil Fuel Peak Coming, Carbon Tracker,
September 2018, https://www.carbontracker.org/reports/2020-vision-why-you-should-see-the-fossil-
fuel-peak-coming/ (accessed March 23, 2019), 31.
7. Kingsmill Bond, Myths of the Energy Transition: Renewables Are Too Small to Matter, Carbon Tracker,
October 30, 2018, https://www.carbontracker.org/myths-of-the-transition-renewables-are-too-small/
(accessed March 23, 2019), 1.
8. Roger Fouquet, Heat, Power and Light: Revolutions in Energy Services (New York: Edward Elgar,
2008).
9. Bond, Myths of the Energy Transition, 3–4.
10. Bond, 2020 Vision, 4.
11. Ibid., 5.
12. Ibid., 32.
13. Bobby Magill, “2019 Outlook: Solar, Wind Could Hit 10 Percent of U.S. Electricity,” Bloomberg
Environment, December 26, 2018, https://news.bloombergenvironment.com/environment-and-
energy/2019-outlook-solar-wind-could-hit-10-percent-of-us-electricity (accessed March 23, 2019);
Bond, 2020 Vision, 18, 22.
14. Bond, 2020 Vision, 31.
15. Ibid.
16. Ibid., 32.
17. Magill, “2019 Outlook.”
18. Megan Mahajan, “Plunging Prices Mean Building New Renewable Energy Is Cheaper Than Running
Existing Coal,” Forbes, December 3, 2018,
https://www.forbes.com/sites/energyinnovation/2018/12/03/plunging-prices-mean-building-new-
renewable-energy-is-cheaper-than-running-existing-coal/#3918a07731f3 (accessed March 24, 2019).
19. Justin Wilkes, Jacopo Moccia, and Mihaela Dragan, Wind in Power: 2011 European Statistics,
European Wind Energy Association, February 2011, https://windeurope.org/about-
wind/statistics/european/wind-in-power-2011/ (accessed March 23, 2019), 6.
20. T. W. Brown et al., “Response to ‘Burden of Proof: A Comprehensive Review of the Feasibility of
100% Renewable-Electricity Systems,” Renewable and Sustainable Energy Reviews 92 (2018): 834–
47; Ben Elliston, Iain MacGill, and Mark Diesendorf, “Least Cost 100% Renewable Electricity
Scenarios in the Australian National Electricity Market,” Energy Policy 59 (August 2013): 270–82.
21. Kathryn Hopkins, “Fuel Prices: Iran Missile Launches Send Oil to $147 a Barrel Record,” The
Guardian, July 11, 2008, https://www.theguardian.com/business/2008/jul/12/oil.commodities (accessed
March 23, 2019).
22. Gebisa Ejeta, “Revitalizing Agricultural Research for Global Food Security,” Food Security 1, no. 4
(2018): 395, doi:10.1007/s12571-009-0045-8.
23. Jad Mouawad, “Exxon Mobil Profit Sets Record Again,” New York Times, February 1, 2008,
https://www.nytimes.com/2008/02/01/business/01cnd-exxon.html (accessed March 24, 2019).
24. Gunnela Hahn et al., Framing Stranded Asset Risks in an Age of Disruption, Stockholm Environment
Institute, March 2018, https://f88973py3n24eoxbq1o3o0fz-wpengine.netdna-ssl.com/wp-
content/uploads/2018/03/stranded-assets-age-disruption.pdf (accessed March 23, 2019), 14.
25. Ibid., 12, 15.
26. US Energy Information Administration, Annual Energy Outlook 2019, January 2019,
https://www.eia.gov/outlooks/aeo/ (accessed March 24, 2019), 72.
27. Christopher Arcus, “Wind & Solar + Storage Prices Smash Records,” CleanTechnica, January 11, 2018,
https://cleantechnica.com/2018/01/11/wind-solar-storage-prices-smash-records/ (accessed March 23,
2019).
28. “Tumbling Costs for Wind, Solar, Batteries Are Squeezing Fossil Fuels,” BloombergNEF, March 28,
2018, https://about.bnef.com/blog/tumbling-costs-wind-solar-batteries-squeezing-fossil-fuels (accessed
March 23, 2019).
29. Gavin Bade, “‘Eyes Wide Open’: Despite Climate Risks, Utilities Bet Big on Natural Gas,” Utility
Dive, September 27, 2016, https://www.utilitydive.com/news/eyes-wide-open-despite-climate-risks-
utilities-bet-big-on-natural-gas/426869/ (accessed March 24, 2019).
30. International Renewable Energy Agency, A New World: The Geopolitics of the Energy Transition,
January 2019, https://www.irena.org/publications/2019/Jan/A-New-World-The-Geopolitics-of-the-
Energy-Transformation (accessed March 23, 2019), 40.
31. Enerdata, “Natural Gas Production,” Global Energy Statistical Yearbook 2018,
https://yearbook.enerdata.net/natural-gas/world-natural-gas-production-statistics.html (accessed
February 19, 2019).
32. Mark Dyson, Alexander Engel, and Jamil Farbes, The Economics of Clean Energy Portfolios: How
Renewables and Distributed Energy Resources Are Outcompeting and Can Strand Investment in
Natural Gas–Fired Generation, Rocky Mountain Institute, May 2018, https://www.rmi.org/wp-
content/uploads/2018/05/RMI_Executive_Summary_Economics_of_Clean_Energy_Portfolios.pdf
(accessed March 23, 2019), 6.
33. Ibid.
34. Ibid., 8–9.
35. Ibid., 10.
36. Enerdata, “Crude Oil Production,” Global Energy Statistical Yearbook 2018,
https://yearbook.enerdata.net/crude-oil/world-production-statitistics.html [sic] (accessed February 19,
2019).
37. Julie Gordon and Jessica Jaganathan, “UPDATE 5—Massive Canada LNG Project Gets Green Light as
Asia Demand for Fuel Booms,” CNBC, October 2, 2018, https://www.cnbc.com/2018/10/02/reuters-
america-update-5-massive-canada-lng-project-gets-green-light-as-asia-demand-for-fuel-booms.html
(accessed March 22, 2019).
38. “Coastal GasLink,” TransCanada Operations, https://www.transcanada.com/en/operations/natural-
gas/coastal-gaslink/ (accessed February 19, 2019).
39. Gordon and Jaganathan, “UPDATE 5.”
40. Jurgen Weiss et al., LNG and Renewable Power: Risk and Opportunity in a Changing World, Brattle
Group, January 15, 2016,
https://brattlefiles.blob.core.windows.net/files/7222_lng_and_renewable_power_-
_risk_and_opportunity_in_a_changing_world.pdf (accessed March 22, 2019), iii.
41. International Renewable Energy Agency, A New World, 40.
42. Weiss et al., LNG and Renewable Power, v.
43. Ibid., vi–viii.
44. Akshat Rathi, “The EU has spent nearly $500 million on technology to fight climate change—with
little to show for it,” Quartz, October 23, 2018, https://qz.com/1431655/the-eu-spent-e424-million-on-
carbon-capture-with-little-to-show-for-it/ (accessed April 9, 2019); European Court of Auditors,
Demonstrating Carbon Capture and Storage and Innovative Renewables at Commercial Scale in the
EU: Intended Progress Not Achieved in the Past Decade, October 23, 2018,
https://www.eca.europa.eu/Lists/ECADocuments/SR18_24/SR_CCS_EN.pdf (accessed May 10, 2019).
45. Vaclav Smil, “Global Energy: The Latest Infatuations,” American Scientist 99 (May–June 2011): 212,
doi: 10.1511/2011.90.212.
46. Joe Room, “Mississippi Realizes How to Make a Clean Coal Plant Work: Run It on Natural Gas,”
ThinkProgress, June 22, 2017, https://thinkprogress.org/clean-coal-natural-gas-kemper-24e5e6db64fd/
(accessed April 5, 2019).
47. “Why Aren’t All Commercial Flights Powered by Sustainable Fuel?” The Economist, March 15, 2018,
https://www.economist.com/the-economist-explains/2018/03/15/why-arent-all-commercial-flights-
powered-by-sustainable-fuel (accessed May 2, 2019).
48. Bioways, D2.1 Bio-based products and applications potential, May 31, 2017,
http://www.bioways.eu/download.php?f=150&l=en&key=441a4e6a27f83a8e828b802c37adc6e1, 8–9.
49. Glenn-Marie Lange, Quentin Wodon, and Kevin Carey, eds., The Changing Wealth of Nations 2018:
Building a Sustainable Future (Washington, DC: World Bank, 2018), 103,
http://hdl.handle.net/10986/29001.
50. Ibid., 14.
51. Lange, Wodon, and Carey, The Changing Wealth of Nations, 111.
52. Lazard, “Lazard Releases Annual Levelized Cost of Energy and Levelized Cost of Storage Analyses,”
news release, November 8, 2018, https://www.lazard.com/media/450781/11-18-lcoelcos-press-release-
2018_final.pdf (accessed March 22, 2019).
53. Ibid.
54. Bank of England, “PRA Review Finds That 70% of Banks Recognise That Climate Change Poses
Financial Risks,” news release, September 26, 2018,
https://www.bankofengland.co.uk/news/2018/september/transition-in-thinking-the-impact-of-climate-
change-on-the-uk-banking-sector (accessed March 19, 2019).
55. Task Force on Climate-Related Financial Disclosures, Recommendations of the Task Force on Climate-
Related Financial Disclosures, June 2017, https://www.fsb-tcfd.org/wp-
content/uploads/2017/06/FINAL-TCFD-Report-062817.pdf (accessed March 24, 2019), iii.
56. Ibid., ii, citing Economist Intelligence Unit, The Cost of Inaction: Recognising the Value at Risk from
Climate Change, 2015, 41.
57. Task Force on Climate-Related Financial Disclosures, Recommendations, ii, citing International Energy
Agency, “Chapter 2: Energy Sector Investment to Meet Climate Goals,” in Perspectives for the Energy
Transition: Investment Needs for a Low-Carbon Energy System, OECD/IEA and IRENA, 2017, 51.
58. Economist Intelligence Unit, The Cost of Inaction: Recognising the Value at Risk from Climate Change,
2015, https://eiuperspectives.economist.com/sites/default/files/The%20cost%20of%20inaction_0.pdf
(accessed April 10, 2019), 17.
59. Task Force on Climate-Related Financial Disclosures, 2018 Status Report, September 2018,
https://www.fsb-tcfd.org/wp-content/uploads/2018/09/FINAL-2018-TCFD-Status-Report-092618.pdf
(accessed April 23, 2019), 2.
60. Bloomberg Philanthropies, “TCFD Publishes First Status Report While Industry Support Continues to
Grow,” news release, September 26, 2019, https://www.bloomberg.org/press/releases/tcfd-publishes-
first-status-report-industry-support-continues-grow/ (accessed March 24, 2019).
CHAPTER 5
1. Tom Harrison et al., Not Long Now: Survey of Fund Managers’ Responses to Climate-Related Risks
Facing Fossil Fuel Companies, Climate Change Collaboration and UK Sustainable Investment and
Finance Association, April 2018, http://uksif.org/wp-content/uploads/2018/04/UPDATED-UKSIF-Not-
Long-Now-Survey-report-2018-ilovepdf-compressed.pdf (accessed March 24, 2019), 3, 5; Felicia
Jackson, “Three Risks That Are Haunting Big Oil,” Forbes, April 26, 2018,
https://www.forbes.com/sites/feliciajackson/2018/04/26/three-risks-that-are-haunting-big-
oil/#335c06212739 (accessed March 29, 2019).
2. Thinking Ahead Institute, Global Pension Assets Study 2018, Willis Towers Watson, February 5, 2018,
https://www.thinkingaheadinstitute.org/en/Library/Public/Research-and-Ideas/2018/02/Global-Pension-
Asset-Survey-2018 (accessed March 23, 2019), 3, 5, 11.
3. International Trade Union Confederation, “Just Transition Centre,” https://www.ituc-csi.org/just-
transition-centre (accessed February 19, 2019).
4. Pension Rights Center, “How Many American Workers Participate in Workplace Retirement Plans?”
January 18, 2018, http://www.pensionrights.org/publications/statistic/how-many-american-workers-
participate-workplace-retirement-plans (accessed March 24, 2019).
5. Congressional Record, May 13, 1946, 4891–911.
6. Personal interview with William Winpisinger, July 18, 1977.
7. Nicholas Lemann, The Promised Land: The Great Black Migration and How It Changed America
(New York: Vintage Books, 1992), 5.
8. Willis Peterson and Yoav Kislev, “The Cotton Harvester in Retrospect: Labor Displacement or
Replacement?” University of Minnesota, Department of Agricultural and Applied Economics, Staff
Paper P81-25, September 1991, 1–2.
9. Lemann, The Promised Land, 6.
10. Marcus Jones, Black Migration in the United States: With Emphasis on Selected Central Cities
(Saratoga, CA: Century 21 Publishing, 1980), 46.
11. William Julius Wilson, The Declining Significance of Race (Chicago: University of Chicago Press,
1978), 93; Thomas J. Sugrue, “The Structures of Urban Poverty: The Reorganization of Space and
Work in Three Periods of American History,” in The Underclass Debate: Views from History, ed.
Michael Katz (Princeton: Princeton University Press, 1993), 102.
12. UAW data submitted to Hearings Before the United States Commission on Civil Rights, held in Detroit,
December 14–15, 1960 (Washington, DC: USGPO, 1961), 63–65.
13. John Judis, “The Jobless Recovery,” New Republic, March 15, 1993, 20.
14. Will Barnes, “The Second Industrialization of the American South,” 2007, posted by IDP August 1,
2013, https://libcom.org/library/second-industrialization-american-south (accessed April 16, 2019).
15. Jeremy Rifkin and Randy Barber, The North Will Rise Again: Pensions, Politics and Power in the
1980s (Boston: Beacon Press, 1978), 7.
16. Ibid., 10–11.
17. Ibid., 13.
18. Ibid.
19. Michael Decourcy Hinds, “Public Pension Funds Tempt States in Need,” New York Times, December 2,
1989, https://www.nytimes.com/1989/12/02/us/public-pension-funds-tempt-states-in-need.html
(accessed February 28, 2019); Jeffery Kaye, “Unions Map Investment Guidelines,” Washington Post,
March 9, 1980, https://www.washingtonpost.com/archive/business/1980/03/09/unions-map-investment-
guidelines/2008e77d-5e0a-42bf-99fb-6980854f0b77/?utm_term=.a04a4b604fbf (accessed April 10,
2019).
20. Owen Davis, “All Roads Lead to Wall Street,” Dissent Magazine, October 16, 2018,
https://www.dissentmagazine.org/online_articles/working-class-shareholder-labor-activism-finance
 (accessed February 19, 2019).
21. Richard Marens, “Waiting for the North to Rise: Revisiting Barber and Rifkin After a Generation of
Union Financial Activism in the U.S.,” Journal of Business Ethics 52, no. 1 (2004): 109.
22. Ibid.
23. Richard Marens, “Extending Frames and Breaking Windows: Labor Activists as Shareholder
Advocates,” Ephemera 7, no. 3 (2007): 457, http://www.ephemerajournal.org/sites/default/files/7-
3marens.pdf (accessed March 23, 2019).
24. “1,000+ Divestment Commitments,” Fossil Free, https://gofossilfree.org/divestment/commitments/
(accessed March 15, 2019).
25. ICLEI, New York City Moves to Divest Pension Funds from Billions of Dollars in Fossil Fuel Reserves,
2018, http://icleiusa.org/wp-content/uploads/2018/09/NYC-Divestment-Case-Study-ICLEI-USA.pdf
(accessed March 23, 2019), 9.
26. Oliver Milman, “New York City Plans to Divest $5bn from Fossil Fuels and Sue Oil Companies,” The
Guardian, January 10, 2018, https://www.theguardian.com/us-news/2018/jan/10/new-york-city-plans-
to-divest-5bn-from-fossil-fuels-and-sue-oil-companies (accessed February 4, 2019).
27. City of New York, Community Development Block Grant Disaster Recovery, “Impact of Hurricane
Sandy,” https://www1.nyc.gov/site/cdbgdr/about/About%20Hurricane%20Sandy.page (accessed
February 26, 2019).
28. Emily Cassidy, “5 Major Cities Threatened by Climate Change and Sea Level Rise,” City Fix, October
15, 2018, https://thecityfix.com/blog/5-major-cities-threatened-climate-change-sea-level-rise-emily-
cassidy/ (accessed March 23, 2019).
29. ICLEI, New York City Moves to Divest, 13.
30. City of New York, One New York: The Plan for a Strong and Just City, 2015,
http://www.nyc.gov/html/onenyc/downloads/pdf/publications/OneNYC.pdf (accessed March 23, 2019),
166.
31. Bill de Blasio and Sadiq Khan, “As New York and London Mayors, We Call on All Cities to Divest
from Fossil Fuels,” The Guardian, September 10, 2018,
https://www.theguardian.com/commentisfree/2018/sep/10/london-new-york-cities-divest-fossil-fuels-
bill-de-blasio-sadiq-khan (accessed March 24, 2019).
32. Ibid.
33. Gail Moss, “Biggest US Pension Funds ‘Must Consider Climate-Related Risks,’” Investments &
Pensions Europe, September 3, 2018, https://www.ipe.com/news/esg/biggest-us-pension-funds-must-
consider-climate-related-risks-updated/10026446.article (accessed March 23, 2019).
34. California State Legislature, “Bill Information,” SB-964, Public Employees’ Retirement Fund and
Teachers’ Retirement Fund: Investments: Climate-Related Financial Risk (2017–18),
https://leginfo.legislature.ca.gov/faces/billStatusClient.xhtml?bill_id=201720180SB964 (accessed
March 23, 2019).
35. Ibid.
36. California State Teachers’ Retirement System, “CalSTRS at a Glance,” fact sheet, January 2019,
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2019).
37. CalPERS, “CalPERS Board Elects Henry Jones as President, Theresa Taylor as Vice President,” news
release, January 22, 2019, https://www.calpers.ca.gov/page/newsroom/calpers-news/2019/board-elects-
president-vice-president (accessed March 24, 2019).
38. Ivan Penn and Peter Eavis, “PG&E Is Cleared in Deadly Tubbs Fire of 2017,” New York Times, January
24, 2019, https://www.nytimes.com/2019/01/24/business/energy-environment/pge-tubbs-fire.html
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39. Rob Smith, “The World’s Biggest Economies in 2018,” World Economic Forum, April 18, 2018,
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2019).
40. Patrick Collinson and Julia Kollewe, “UK Pension Funds Get Green Light to Dump Fossil Fuel
Investments,” The Guardian, June 18, 2018, https://www.theguardian.com/business/2018/jun/18/uk-
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41. Ibid.
42. Department for Work and Pensions, United Kingdom, Consultation on Clarifying and Strengthening
Trustees’ Investment Duties: The Occupational Pension Schemes (Investment and Disclosure)
(Amendment) Regulations 2018, June 2018,
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/716949/consultation-
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43. UNISON, Local Government Pension Funds—Divest from Carbon Campaign: A UNISON Guide,
January 2018, https://www.unison.org.uk/content/uploads/2018/01/Divest-from-carbon-campaign.pdf
(accessed March 23, 2019), 2.
44. Nina Chestney, “Ireland Commits to Divesting Public Funds from Fossil Fuel Companies,” Reuters,
July 12, 2018, https://www.reuters.com/article/us-ireland-fossilfuels-divestment/ireland-commits-to-
divesting-public-funds-from-fossil-fuel-companies-idUSKBN1K22AA (accessed February 19, 2019).
45. Richard Milne and David Sheppard, “Norway’s $1tn Wealth Fund Set to Cut Oil and Gas Stocks,”
Financial Times, March 8, 2019, https://www.ft.com/content/d32142a8-418f-11e9-b896-fe36ec32aece
(accessed March 8, 2019).
46. Douglas Appell, “South Korean Pension Funds Declare War on Coal,” Pensions & Investments,
October 5, 2018, https://www.pionline.com/article/20181005/ONLINE/181009888/south-korean-
pension-funds-declare-war-on-coal (accessed February 19, 2019).
47. Korea Sustainability Investing Forum, “Two Korean Pension Funds Worth US$22 Billion Exit Coal
Finance,” 350.org, October 4, 2018, http://world.350.org/east-asia/two-korean-pension-funds-worth-
us22-billion-exit-coal-finance/ (accessed February 19, 2019).
48. Peter Bosshard, Insuring Coal No More: The 2018 Scorecard on Insurance, Coal, and Climate Change,
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4–6.
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(accessed March 18, 2019); Aon Benfield, Weather, Climate & Catastrophic Insight: 2017 Annual
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50. Vitality Katsenelson, “Stocks Are Somewhere Between Tremendously and Enormously Overvalued,”
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51. Pew Charitable Trusts, “The State Pension Funding Gap: 2015,” April 20, 2017,
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52. Tom Sanzillo, “IEEFA Update: 2018 Ends with Energy Sector in Last Place in the S&P 500,” Institute
for Energy Economics and Financial Analysis, January 2, 2019, http://ieefa.org/ieefa-update-2018-
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53. Alison Moodie, “New York Pension Fund Could Have Made Billions by Divesting from Fossil Fuels—
Report,” The Guardian, March 4, 2016, https://www.theguardian.com/sustainable-
business/2016/mar/04/fossil-fuel-divestment-new-york-state-pension-fund-hurricane-sandy-ftse
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CHAPTER 6
1. Morgan Stanley Institute for Sustainable Investing, Sustainable Signals: New Data from the Individual
Investor, 2017, https://www.morganstanley.com/pub/content/dam/msdotcom/ideas/sustainable-
signals/pdf/Sustainable_Signals_Whitepaper.pdf (accessed March 23, 2019), 1.
2. Forum for Sustainable and Responsible Investment, “Sustainable Investing Assets Reach $12 Trillion
as Reported by the US SIF Foundation’s Biennial Report on US Sustainable, Responsible and Impact
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3. George Serafeim, Public Sentiment and the Price of Corporate Sustainability, Harvard Business School
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679–704, doi:10.1111/j.1468-036X.2009.00532.x; Gordon Clark, Andreas Finer, and Michael Viehs,
From the Stockholder to the Stakeholder: How Sustainability Can Drive Financial Outperformance,
University of Oxford and Arabesque Partners, March 2015,
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4. Jessica Taylor, Alex Lake, and Christina Weimann, The Carbon Scorecard, S&P Dow Jones Indices,
May 2018, https://us.spindices.com/documents/research/research-the-carbon-scorecard-may-2018.pdf
(accessed March 23, 2019), 1.
5. Ibid.
6. Jonathan Woetzel et al., Bridging Infrastructure Gaps: Has the World Made Progress? McKinsey &
Company, October 2017, https://www.mckinsey.com/industries/capital-projects-and-infrastructure/our-
insights/bridging-infrastructure-gaps-has-the-world-made-progress (accessed March 24, 2019), 5;
Jeffery Stupak, Economic Impact of Infrastructure Investment, Congressional Research Service,
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7. Ipsos, “Global Infrastructure Index—Public Satisfaction and Priorities 2018,” 2018,
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February 27, 2019), 5.
8. Lydia DePillis, “Trump Unveils Infrastructure Plan,” CNN, February 12, 2018,
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(accessed February 27, 2019).
9. Ed O’Keefe and Steven Mufson, “Senate Democrats Unveil a Trump-Size Infrastructure Plan,”
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a-trump-style-infrastructure-plan/2017/01/23/332be2dc-e1b3-11e6-a547-5fb9411d332c_story.html?
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10. “America’s Splurge,” The Economist, February 14, 2008,
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13. U.S. Department of Transportation Federal Highway Administration, “Why President Dwight D.
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 Estimate of the Investment Requirements and the Resultant Benefits of a Fully Functioning Smart Grid,
March 2011,
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15. Terry Dinan, Federal Support for Developing, Producing, and Using Fuels and Energy Technologies,
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16. The Plug-In Electric Vehicle Tax Credit, Congressional Research Service, November 6, 2018,
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19. Elizabeth McNichol, It’s Time for States to Invest in Infrastructure, Center on Budget and Policy
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20. Woetzel et al., Bridging Infrastructure Gaps, 5.
21. Jeffery Werling and Ronald Horst, Catching Up: Greater Focus Needed to Achieve a More Competitive
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22. Jeff Stein, “Ocasio-Cortez Wants Higher Taxes on Very Rich Americans. Here’s How Much Money
That Could Raise,” Washington Post, January 5, 2019,
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Context,” NOAA, January 8, 2018, https://www.climate.gov/news-features/blogs/beyond-data/2017-us-
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28. Jeff Stein, “U.S. Military Budget Inches Closer to $1 Trillion Mark, as Concerns over Federal Deficit
Grow,” Washington Post, June 19, 2018,
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29. Congressional Budget Office, “Weapon Systems,” https://www.cbo.gov/topics/defense-and-national-
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30. “U.S. Defense Spending Compared to Other Countries,” Peter G. Peterson Foundation, May 7, 2018,
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31. Dana Nuccitelli, “America Spends over $20bn per Year on Fossil Fuel Subsidies. Abolish Them,” The
Guardian, July 30, 2018, https://www.theguardian.com/environment/climate-consensus-97-per-
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32. Ingo Walter and Clive Lipshitz, “Public Pensions and Infrastructure: A Match Made in Heaven,” The
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33. Green Bank Network, “Green Bank Network Impact Through July 2018,”
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35. Devashree Saha and Mark Muro, “Green Bank Bill Nods to States,” Brookings blog The Avenue, May
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CHAPTER 7
1. European Commission, Communication from the Commission to the European Parliament, the
European Council, the Council, the European Economic and Social Committee, the Committee of the
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6. European Commission, Communication from the Commission, 4.
7. Ibid., 5.
8. Ibid.
9. Jeremy Rifkin, The Empathic Civilization (New York: Tarcher/Penguin, 2009).
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economic Analysis,” Journal of Cleaner Production 186 (2018): 131–45,
doi:10.1016/j.jclepro.2018.03.095.
18. Kerstine Appun, Felix Bieler, and Julian Wettengel, “Germany’s Energy Consumption and Power Mix
in Charts,” Clean Energy Wire, February 6, 2019; Rob Smith, “This Is How People in Europe Are
Helping Lead the Energy Charge,” World Economic Forum, April 25, 2018,
https://www.weforum.org/agenda/2018/04/how-europe-s-energy-citizens-are-leading-the-way-to-100-
renewable-power/ (accessed March 5, 2019).
19. Edith Bayer, Report on the German Power System, Version 1.2, ed. Mara Marthe Kleine, commissioned
by Agora Energiewende, 2015, 9.
20. “State Renewable Portfolio Standards and Goals,” National Conference of State Legislatures, February
1, 2019, http://www.ncsl.org/research/energy/renewable-portfolio-standards.aspx (accessed March 27,
2019).
21. Brad Plummer, “A ‘Green New Deal’ Is Far from Reality, but Climate Action Is Picking Up in the
States,” New York Times, February 8, 2019, https://www.nytimes.com/2019/02/08/climate/states-
global-warming.html (accessed March 27, 2019).
22. Ibid.
23. Tom Machinchick and Benjamin Freas, Navigant Research Leaderboard: ESCOs: Assessment of
Strategy and Execution for 14 Energy Services Companies, Navigant Research, 2017, 7.
24. TIR Consulting Group, “Office of Jeremy Rifkin,” https://www.foet.org/about/tir-consulting-group/
(accessed February 19, 2019).
25. “‘The New Abnormal’: Gov. Brown Warns of ‘Changed World’ as Fires Ravage California,” CBS Los
Angeles, November 11, 2018, https://losangeles.cbslocal.com/2018/11/11/gov-brown-abnormal-fire/
(accessed February 19, 2019).
 INDEX

The index that appeared in the print version of this title does not match the pages
in your e-book. Please use the search function on your e-reading device to search
for terms of interest. For your reference, the terms that appear in the print index
are listed below.

Africa
North Africa
power grid plans for
solar and wind energy in
South Africa
Age of Progress
Age of Resilience
aggregate energy efficiency
agriculture sector
carbon farming
digital operations
effect of animal rearing on greenhouse gas emissions
green electricity cooperatives
Internet of Things infrastructure
organic farming
percentage of crops and land used for animal feed
use of public land
and vegetarian or vegan diets
AIG
Alliance of Liberals and Democrats for Europe (ALDE)
Allianz
Alphabet Inc.. See also Google
American Society of Civil Engineers (ASCE) infrastructure report card
apartheid divestment movement
Apple
apprenticeships, green
Arias Cañete, Miguel
artificial intelligence (AI)
Ashton, Kevin
AT&T
autonomous (self-driving) electric vehicles
AXA
Balsillie, Jim
Bank of America
Bank of England
Prudential Regulation Authority (PRA)
Barber, Randy
Barbier, Edward
Bernhard, Wolfgang
Bernstein Research
Big Data
Bilicic, George
bio-based materials
biosphere consciousness
Blair, Tony
blockchain technology
Bloomberg, Michael
Bond, Kingsmill
Booker, Cory
Boston Tea Party
Bowser, Muriel
Brattle Group
Brown, Jerry
Buffett, Warren
building sector
decoupling from fossil fuel industry
nodal IoT buildings
retrofits
Bulc, Violeta
Burger King
Burns, Larry
Burrow, Sharan
Buttigieg, Pete
Byrd, Harry

Caldecott, Ben
Canada
and liquefied natural gas (LNG) pipeline
and natural gas
Toronto waterfront smart city project
capital
market capital
pension capital
public capital
social capital
capitalism
and near-zero marginal costs
and pension capital
pension fund divest/invest campaign
and Sharing Economy
social capitalism
 and socially responsible investment (SRI)
carbon bubble
carbon capture and storage
and agriculture sector
limitations of
process of
carbon tax
Carbon Tracker Initiative
Carney, Mark
Castro, Julián
Cavoukian, Ann
Changing Wealth of Nations 2018: Building a Sustainable Future, The (World Bank report)
China. See People’s Republic of China
Cisco
Citigroup
Claassen, Utz
climate change
and freshwater
and history of the Green New Deal
and peer assembly governance
and poverty
and public health
and stranded assets
and wealth
See also global warming; greenhouse gas emissions
climate change policy and leadership
climate-neutral 2050 game plan (European Union)
Global Covenant of Mayors for Climate & Energy
Intergovernmental Panel on Climate Change (IPCC)
Paris Agreement on Climate Change
20–20–20 mandate (European Union)
Climate Corps
climate strike (March 15, 2019)
Clinton, Bill
coal
and carbon capture and storage
as centralized source of energy
costs of
and First Industrial Revolution
and Germany
and Hauts-de-France (Green New Deal roadmap)
and pension capital debate (1946)
and railroads
and South Korea
and stranded assets
and US public land
Cohn-Bendit, Daniel
cold war
Commonwealth Edison
Communication Internet
Condorcet, Nicolas, Marquis de
ConocoPhillips
Conservation Corps
Consoli, Angelo
Cook, Tim
Copenhagen Climate Summit
Council of the European Union
German presidency of
Slovakian presidency of
CPS Energy
creative destruction
Currie, Helen
cyber war and cyber-attacks

Daimler Trucks & Buses

Data for Progress
Davos (World Economic Forum)
DC Infrastructure Academy
De Blasio, Bill
Di Lorenzo, Julie
digital natives
digital rights
DowDuPont Inc.
Dubai

Economics of Clean Energy Portfolio, The (Rocky Mountain Institute report)

Eisenhower, Dwight D.
Electric Power Research Institute (EPRI)
electric vehicles
autonomous (self-driving) electric vehicles
charging stations for
cost tipping point for
and declining price of lithium batteries
and employment
and energy storage
and government fuel economy standards
and Green New Deal key initiatives
investment in
and Los Angeles’s Green New Deal
and Mobility and Logistics Internet
and peak oil consumption
projected sales
and sustainable community pilot projects
tax incentives for
electricity sector
decoupling from fossil fuel industry
and Great Disruption warning signs
national smart grid
See also coal; fossil fuel industry; natural gas; oil; solar and wind energy
Employment Retirement Income Security Act (ERISA)
EnBW
Energy Performance Certificates (EPCs)
energy service companies (ESCOs)
business model
and investment in Third Industrial Revolution infrastructure transition
main feature of
and peer assembly governance
and performance contracting
top ten
ENIAC (first electronic computer)
E.ON
Eugster, Chris
European Commission
European Greens
European Parliament
European People’s Party–European Democrats (EPP–ED)
European Union
and building retrofits
Central Bank
climate-neutral 2050 game plan
Committee of the Regions
Energy Performance of Buildings Directive
A Green New Deal (declaration)
A Green New Deal for Europe (European Greens report)
Green New Deal Group
Green New Deal origins
taxation in
Third Industrial Revolution infrastructure in
and Toward a Transatlantic Green New Deal (German Green Party manifesto)
20–20–20 mandate
European United Left–Nordic Green Left (GUE–NGL)
Exelon Utilities

Facebook
Farmers Insurance Group
Federal Housing Administration (FHA)
feed-in tariffs
Fields, Mark
financial sector
Bank of America
Bank of England
and stranded assets
See also investment; pension funds
Financial Stability Board (FSB)
First Industrial Revolution
and building sector
definition of
and family and kinship
 and fossil fuels
ideological consciousness of
infrastructure of
and Morrill Land-Grant Acts (1862)
and railroads
and wealth
First Nations
5G broadband Internet
Fleissig, Will
Ford, Gerald
Ford, Henry
Ford Motor Company
Ford Smart Mobility
River Rouge plant (Detroit)
and union membership
Fortune 500 companies
fossil fuel industry
collapse of
decoupling of building sector from
decoupling of electricity sector from
decoupling of ICT and telecommunications sector from
decoupling of transportation sector from
infrastructure
post-tax subsidies for
See also coal; natural gas; oil; stranded assets
Franklin, Benjamin
French Revolution
Friedman, Milton
fuel-cell vehicles. See also electric vehicles

Gabriel, Sigmar
Garcetti, Eric
Gates, Bill
Geis, Aurora
Gen Z
general-purpose technology platform (society-wide infrastructure)
German Alliance for Work and the Environment
Germany
Autobahn
building retrofit project
Christian Democratic Union (CDU) party
and coal
distributed nature of green energies in
feed-in tariff for green electricity
Green Party
and peer assembly governance model
presidency of Council of the European Union
Social Democratic Party (SPD)
GI Bill
Giannakopoulou, Elena
Gillibrand, Kirsten
Global Covenant of Mayors for Climate & Energy
global warming
and agriculture sector
and building sector
and ICT/communication sector
mandates and protocols
public opinion on
and transportation sector
globalization
glocalization
Google
Sidewalk Labs
Gore, Al
Grand Duchy of Luxembourg (Green New Deal roadmap)
Great Depression
Great Disruption
consequences of
and feed-in tariffs
four phases of energy transition
signs of
transitional moment
and 20–20–20 mandate (European Union)
Great Recession
Green Bank Act of 2014
Green Bank Design Summit (2019, Paris)
green banks
Green Corps
Green New Deal
building retrofits
carbon-farming techniques
carbon tax
data centers
electric vehicles and charging stations
elimination of fossil fuel subsidies
energy storage technology
equitable tax laws
European origins of
5G broadband
global interconnectivity and transparency
Internet of Things
investment in Third Industrial Revolution infrastructure transition
just transition funds
labor movement
microgrids
military expenditures
national green bank
national smart power
organic and ecological agricultural practices
 and peer assembly governance
public lands
research and development
service programs
smart Third Industrial Revolution business development
and Sunrise Movement
supply chain circularity processes
twenty-three key initiatives of
Green New Deal (cont’d)
and US Green Party
US resolution
water, sewer, and drainage systems
Green New Deal: A Progressive Vision for Environmental Sustainability and Economic Stability (Data for
Progress report)
Green New Deal: Joined-Up Policies to Solve the Triple Crunch of the Credit Crisis, Climate Change and
High Oil Prices (Green New Deal Group declaration)
Green New Deal for Europe: Towards Green Modernisation in the Face of Crisis (European Greens report)
Green New Deal roadmaps
Grand Duchy of Luxembourg
Hauts-de-France (formerly Nord-Pas-de-Calais)
Metropolitan Region of Rotterdam and The Hague
San Antonio
Green Party (Germany)
Green Party (US)
Greenhalgh, Paul
greenhouse gas emissions
Greens–European Free Alliance (Greens/EFA)

Haier Group
Hanergy
hard-to-abate sectors
Harris, Kamala
Hauts-de-France (Green New Deal roadmap)
Heinrich Böll Foundation
Homestead Acts
Homo urbanus
Horgan, John
Hoyer, Steny
Hsiang, Solomon
human consciousness
Hurricane Sandy
hybrid economic system (sharing economy and provider/user networks)

ICT and telecommunications sector

and antitrust laws
data centers
decoupling from fossil fuel industry
5G broadband
and Green New Deal key initiatives
 and Green New Deal transition
infrastructure
internet companies
projected greenhouse emissions from
and Second Industrial Revolution
smartphones and tablets
and vertically scaled monopolies
ideological consciousness
infrastructure
American Society of Civil Engineers (ASCE) report card
costs of deteriorating and substandard
definition of
First Industrial Revolution
fossil fuel
general-purpose technology platform (society-wide infrastructure)
Internet of Things
nuclear energy
payoffs for improvements to and spending on
public-private partnerships and ownership of
Second Industrial Revolution
Third Industrial Revolution distributed infrastructure
Third Industrial Revolution laterally scaled infrastructure
Third Industrial Revolution open-source infrastructure
Trump administration’s plan
and wealth
workforce
World Economic Forum’s rankings
and World War II
See also investment in Third Industrial Revolution infrastructure transition
infrastructure academies
Infrastructure Corps
Intel
Intergovernmental Panel on Climate Change (IPCC)
International Renewable Energy Agency (IRENA)
International Trade Union Confederation (ITUC)
internet. See ICT/telecommunications sector
Internet of Things (IoT)
and aggregate energy efficiency
and agriculture sector
economic benefits of
and Green New Deal key initiatives
nodal IoT buildings
oversight of
sensors
three converged internets of
and Toronto waterfront smart city project
and transportation sector
investment
environmental, social, and governance practices (ESG)
impact investing
 socially responsible investment (SRI)
See also investment in Third Industrial Revolution infrastructure transition; pensions
investment in Third Industrial Revolution infrastructure transition
building retrofits
cost of initial ten-year infrastructure plan
and falling cost curve of infrastructure
federal investment
green banks
Interstate Highway System analogy
and peer assembly governance
Pentagon budget cuts
public and private pension funds
public opinion on
tax credits and other incentives
taxation on the super-rich
termination of fossil fuel subsidies
in the United States

Jim Crow laws

Jones, Adrian
“just transition” funds

Keynes, Maynard
Khan, Sadiq
kinship and family
Korea Gas Corporation

labor movement
Industrial Union of Electrical Workers
Machinists Union
and pension funds
and right-to-work laws
labor movement (cont’d)
United Automobile Workers (UAW)
United Steelworkers
land-grant public colleges and universities
Lazard
Leinen, Jo
Lemann, Nicholas
levelized cost of energy (LCOE)
definition of
of large solar installations
of nuclear power facilities
Lewis, John L.
Li Hejun
Li Keqiang
Lipshitz, Clive
liquefied natural gas (LNG) pipelines
Liu Zhenya
Löscher, Peter

Marens, Richard
marginal cost
definition of
and energy service companies (ESCO)
and green energy
and Internet of Things
near-zero marginal cost mobility
and Third Industrial Revolution infrastructure
Markey, Ed
Markkula, Markku
Marx, Karl
massive open online courses (MOOCs)
Mazur, Mark
McKellar, Kenneth
McKibben, Bill
McVey, Esther
Merkel, Angela
Metropolitan Region of Rotterdam and The Hague (Green New Deal roadmap)
Meyer, Richard
micro power plants
microgrids
Microsoft
midterm elections of 2018
Minimum Energy Efficiency Standards (MEES)
Mobility and Logistics Internet
autonomous (self-driving) electric vehicles
charging stations
decoupling from fossil fuel industry
Digital Solutions & Services (Daimler)
four foundational pillars of
fuel-cell vehicles
sensors
Morrill Land-Grant Acts (1862 and 1890)
Muldoon-Smith, Kevin
Murphy, Chris
mythological consciousness

National Interstate and Defense Highways Act (1956)

National Renewable Energy Laboratory (NREL)
national service programs
national smart grid
natural gas
neoliberalism
New Deal
Public Works Administration (PWA)
Tennessee Valley Authority
Work Projects Administration (WPA)
“New Deal 4 Europe” (European Federalist Movement petition)
nodal IoT buildings. See also building sector
nuclear attacks
nuclear energy
nuclear energy infrastructure

Obama, Barack
Ocasio-Cortez, Alexandria
oil
“Boston Oil Party of 1973”
devaluation of international oil companies
1973 OPEC oil embargo
oil bubble
oil-rich nations
projected peak demand for
One New York: The Plan for a Strong and Just City
One Planet Summit (2018)
Organization of the Petroleum Exporting Countries (OPEC)
O’Rourke, Beto
Oxford Sustainable Finance Programme

Pacific Railroad Acts

Page, Larry
Paris Agreement on Climate Change
Paris Climate Summit
Party of European Socialists (PES)
peak oil demand projections
peer assembly governance
Pelosi, Nancy
pension funds
California Public Employees’ Retirement System (CalPERS)
California State Teachers’ Retirement System (CalSTRS)
and climate change
divest/invest campaigns
and Employment Retirement Income Security Act (ERISA)
implications of fossil fuel sector’s collapse on
Ireland Strategic Investment Fund
and labor movement
Mayor’s Energy Efficiency Fund (London)
New York State Common Retirement Fund
in Norway
pension capital debate (1946)
prudent man rule
public pensions
pushback to fossil fuel divestment
and socially responsible investment (SRI)
in South Korea
and Taft-Hartley Bill
in the United States
People’s Republic of China
Belt and Road Initiative
decoupling of electricity sector from fossil fuel industry
and geopolitics
global sales of electric vehicles
infrastructure spending
natural gas production and demand
nodal buildings
renewable energy sector
Third Industrial Revolution infrastructure in
Thirteenth Five-Year Plan
Twelfth Five-Year Plan
performance contracting
PG&E
photovoltaic (PV) energy
Pramaggiore, Anne
Prentis, Dave
presidential campaign of 2012
provider/user networks
psychological consciousness

Rashid bin Saeed al Maktoum

Reagan, Ronald
religion
Renewable Energy Internet
decoupling from fossil fuel industry
five foundational pillars of
national smart grid
Research In Motion
Rethinking the Economic Recovery: A Global Green New Deal (UNEP report)
RethinkX
roadmaps. See Green New Deal roadmaps
Rocky Mountain Institute (RMI)
Romney, Mitt
Roosevelt, Franklin Delano
Royal Dutch Shell
Ruiz-Geli, Enric
Rule, Chis
RWE

San Antonio (Green New Deal roadmap)

Sanders, Bernie
SAP
Schmidt, Eric
Schumpeter, Joseph
Second Industrial Revolution
automobile sector
definition of
family and kinship of
 and fossil fuels
infrastructure of
invention of mechanical cotton picker
key sectors of
Morrill Land-Grant Acts
psychological consciousness of
and right-to-work laws
and segregation
US Interstate Highway System
and wealth
Šefčovič, Maroš
Select Committee on the Climate Crisis
sensors
and agricultural sector
and electricity sector
and energy service companies (ESCOs)
as foundational pillar of Mobility and Logistics Internet
and smart cities
and smart roads
Sharing Economy
Sidewalk Labs
Siemens
small and medium-sized enterprises (SMEs)
smart cities
smart grid
Smil, Vaclav
Smith School of Enterprise and Environment
social capital
social capitalism
socialism
socially responsible investment (SRI)
solar and wind energy
and agriculture sector
and building sector
cost of
and employment
generation of
and Great Disruption
and Green New Deal key initiatives
and People’s Republic of China
and pubic land
and Renewable Energy Internet
tax credits and other incentives for
and transportation sector
South Africa
Southern Company
specialized competencies
Stein, Jill
Steinmeier, Frank-Walter
stranded assets
 banking and insurance sectors
building sector
and creative destruction
definition of
electricity sector
and Germany
and Great Disruption warning signs
ICT and communication internet sectors
and “just transition” funds
and natural gas
and oil
and peer assembly governance
and Second Industrial Revolution
and Smith School of Enterprise and Environment
stranded workers and communities
and subsidies
transportation sector
subprime mortgage bubble
Summers, Larry
Sunrise Movement
surveillance
Swiss Re

Taft, Robert
Taft-Hartley Bill
tariffs, feed-in
Task Force on Climate-Related Financial Disclosures (TCFD)
Tett, Gillian
Thatcher, Margaret
Third Industrial Revolution
biosphere consciousness of
definition of
distributed infrastructure of
laterally scaled infrastructure of
open-source infrastructure of
power source
time needed to build infrastructure for
transportation medium
See also Communication Internet; Green New Deal; Green New Deal roadmaps; Internet of Things;
investment in Third Industrial Revolution infrastructure transition; Renewable Energy Internet
Third Industrial Revolution: A Radical New Sharing Economy, The (film)
Three Mile Island nuclear meltdown
TIR Consulting Group LLC
Toronto waterfront smart city project
Tory, John
Toshiba
Toward a Transatlantic Green New Deal: Tackling the Climate and Economic Crises (German Green Party
manifesto)
transportation sector
 decoupling from fossil fuel industry
and near-zero marginal cost mobility
transition to Third Industrial Revolution
US Interstate Highway System
See also electric vehicles; Mobility and Logistics Internet
Trudeau, Justin
Truman, Harry S.
Trumka, Richard
Trump, Donald
infrastructure plan
natural gas policy
Turmes, Claude
20–20–20 mandate (European Union)

Uber
United Arab Emirates
United Kingdom
Department for Work and Pensions (DWP) pension regulations
UNISON (union)
United Nations Environment Programme (UNEP)
United Nations Industrial Development Organization (UNIDO)
US Conference of Mayors
US Interstate Highway System

van Beurden, Ben

Van Hollen, Chris
Vattenfall

Walter, Ingo
Wang Yang
Warren, Elizabeth
Waterfront Toronto. See also Toronto waterfront smart city project
Watson, Thomas
wealth
and carbon bubble
and climate change
and fossil fuels
inequality
and pension capital
and public infrastructure
and taxation
Wealth of Nations, The (Smith)
Wikipedia
Wilson, Edward O.
wind energy. See solar and wind energy
Winpisinger, William
World Bank
World Economic Forum
Wylie, Bianca
Wynne, Kathleen

Xi Jinping

Yumkella, Kandeh

Zhang Ruimin
Zurich Insurance Group
ALSO BY JEREMY RIFKIN AND AVAILABLE FROM ST. MARTIN’S PRESS

The Zero Marginal Cost Society

The Third Industrial Revolution

 Praise for THE GREEN NEW DEAL

“Jeremy Rifkin’s The Green New Deal presents the most comprehensive and
compelling narrative to transition the U.S. energy, telecommunications, and
transportation sectors into a smart Third Industrial Revolution. While our
national leaders have been unable to find common ground, Rifkin provides a
bipartisan means to accelerate our nation’s path toward decarbonization.”
—Robert Wilhite, Managing Director, Navigant Consulting (Navigant
Global Energy is the largest energy and sustainability consulting team in
the industry)

“The United States is falling behind the European Union and now China in the
race to prepare our economies for the low-carbon future. Rifkin’s new book
gives the US the crucial narrative it needs to confront the ‘carbon bubble’ of
stranded assets increasingly threatening the stability of the global financial
system. And his advice is not just for the US. The 9,200 cities that are part of the
Global Covenant of Mayors for Climate & Energy have a lot to learn from
Rifkin’s work with pioneer smart cities and regions in Europe.”
—Maroš Šefčovič, Vice President of the European Commission and Co-
Chair of the Global Covenant of Mayors for Climate & Energy

“Rifkin is bold, prescient, and revolutionary. The urgent global public health and
humanitarian impacts of Climate Change are well upon us and accelerating.
Rifkin charts a tough and achievable path forward—distributed, open source,
glocal and green—and brings us to the threshold of a New Beginning.”
—James Orbinski, MD, former International President of Doctors Without
Borders

“The Green New Deal is impressive in its ability to connect the dots of
environmental, political, social, and geographical issues that define our
sustainable future. Rifkin has laid out a vast Green New Deal plan that is radical
and defensible for a historic twenty-year retrofit of the nation’s millions of
buildings to reduce global warming emissions, taking us into a green century.”
—Gordon Gill, Principal, Adrian Smith + Gordon Gill Architecture
(ranked the number one architecture firm in the United States of America
by Architect magazine)

“In The Green New Deal, Jeremy Rifkin presents a survival imperative for the
millions without work and for a planet that needs healing. In this timely book, he
defines the urgent steps that will need to be taken to transition from fossil fuels
to renewable energy and reclaim public infrastructure.”
—Dr. Vandana Shiva, feminist, ecologist, and recipient of the Right
Livelihood Award
 ABOUT THE AUTHOR

JEREMY RIFKIN, one of the most popular social thinkers of our time, is the
bestselling author of twenty books, including The Zero Marginal Cost Society
and The Third Industrial Revolution. His books have been translated into more
than thirty-five languages. Rifkin is an advisor to the European Union, the
People’s Republic of China, and heads of state around the world. He has taught
at the Wharton School’s Executive Education Program at the University of
Pennsylvania since 1995 and is the president of the Foundation on Economic
Trends in Washington, DC. You can sign up for email updates here.
 Thank you for buying this
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 CONTENTS

Title Page
Copyright Notice
Dedication
Introduction

PART I
THE GREAT DISRUPTION:
THE DECOUPLING STAMPEDE AND STRANDED FOSSIL FUEL
ASSETS

1. It’s the Infrastructure, Stupid!

2. Power to the People: The Sun and Wind Are Free
3. Zero-Carbon Living: Autonomous Electric Mobility, Nodal IoT Buildings,
and Smart Ecological Agriculture
4. The Tipping Point: The Collapse of the Fossil Fuel Civilization, Circa 2028

PART II
A GREEN NEW DEAL RISING FROM THE ASHES

5. Waking the Giant: Pension Power Finds Its Voice

6. The Economic Transformation: The New Social Capitalism
7. Mobilizing Society: Saving Life on Earth
Acknowledgments
Notes
Index
Also by Jeremy Rifkin
Praise for The Green New Deal
About the Author
Copyright
GREEN NEW DEAL. Copyright © 2019 by Jeremy Rifkin. All rights reserved. For information, address St.
Martin’s Publishing Group, 120 Broadway, New York, NY 10271.

www.stmartins.com

Cover design by Rob Grom

The Library of Congress has cataloged the print edition as follows.

Names: Rifkin, Jeremy, author.

Title: The green New Deal: why the fossil fuel civilization will collapse by 2028, and the bold economic
plan to save life on earth / Jeremy Rifkin.
Description: First edition. | New York: St. Martin’s Press, 2019. | Includes bibliographical references and
index.
Identifiers: LCCN 2019021341 | ISBN 9781250253200 (hardcover) | ISBN 9781250253217 (ebook)
Subjects: LCSH: Energy policy—Environmental aspects. | Clean energy—Government policy. | Sustainable
development—Government policy.
Classification: LCC HD9502.A2 R537 2019 | DDC 333.79—dc23
LC record available at https://lccn.loc.gov/2019021341

eISBN 9781250253217

Our ebooks may be purchased in bulk for promotional, educational, or business use. Please contact the
Macmillan Corporate and Premium Sales Department at 1-800-221-7945, extension 5442, or by email at
[email protected].

First Edition: September 2019