Global-warming deniers have their reasons. One of the most common is an unwillingness to constrain their lifestyle. This reluctance, however, leads to political gridlock: it makes political parties worry that ambitious green policies—like banning cars from city centers or placing steep taxes on jet fuel to curb air travel—will get them voted out of office at the next election. France’s yellow-vest movement provides policymakers with an object lesson on what can happen when a significant segment of the population feels ignored. Faced with a potential backlash, politicians tend to proceed very cautiously.
Which is why they won’t save the world. According to Rifkin, that task will fall to large institutional investors with billions of dollars of capital at their disposal. That’s because pension funds and other big investors actually favor sustainable investments. Not so much out of ethics but rather for sound financial reasons: sustainable investments deliver stable, long-term returns. This is why Rifkin believes that the profit motive will be instrumental in saving the planet. He calls this intriguingly counter-intuitive prediction the Green New Deal, an optimistic vision of a world that succeeds in getting climate change under control. Thanks to big institutional investors.
2028: the end of world as we know it
Rifkin’s Green New Deal heralds a new industrial age. He argues that tomorrow’s green, digitalized world will be built on new communication technologies, new energy sources, and new mobility. And it may happen sooner than we think. “The fossil fuel civilization will probably collapse somewhere around 2028,” he says. Once the tipping point is reached, the pace of change will be very rapid, he believes, because solar and wind energy will be much cheaper than fossil energy and the change process will be sustained by market forces alone.
Investors of all people should be able to help us?
Once fossil fuels are no longer competitive, Rifkin argues, refineries, oil drilling platforms, pipelines, and nuclear power plants will become stranded assets—redundant, worthless, and unsightly. Rifkin cites a Citigroup report that estimates the value of these stranded assets at more than $100 trillion. Investors, particularly large institutional investors like U.S. pension funds, will avoid these worthless assets in favor of sustainable assets, the argument goes. And in doing so they will pave the way to a brave green new world.
Five imperatives for a sustainable world
Rifkin believes this transition can’t be left entirely to big investors. Some of the work will have to be done by people and organizations in every country, region, and community. Five imperatives are necessary for the Green New Deal to become a reality:
Large-scale investors must increasingly divest their fossil fuel holdings in favor of investments in the energy and other sectors that generate sustainable long-term returns.
Local and regional initiatives must deploy advanced technologies to achieve sustainable goals, which will gradually establish a new, decentralized infrastructure.
Actors other than energy companies will need to build decentralized systems for the transportation and storage of electricity.
High-speed data networks must interconnect ecologically optimized cities.
All the various modes of transport must be integrated to make human mobility as convenient and easy as possible, while cars powered by gasoline or diesel must become obsolete.
Rifkin believes that Volkswagen’s decision to stop making gas-powered cars by 2026 is right on. He argues that the transition to a fully functioning, zero-emission green economy is achievable before 2040. If everyone from pension funds to plain folks pitches in.