Policymakers in the tiny grand duchy of Luxembourg, in Europe, are pondering plans to achieve a 100 percent clean energy economy by 2050.
Luxembourg’s Ministry for the Economy and Chamber of Commerce last month endorsed proposals put together by a team under the leadership of renowned American adviser Jeremy Rifkin.
Deputy Prime Minister Etienne Schneider said the recommendations of the team’s 475-page strategic plan, The 3rd Industrial Revolution Strategy Study for the Grand Duchy of Luxembourg, “constitute a general direction for future development of the country.”
Skip Laitner, energy and resource economist with Economic and Human Dimensions Research Associates in Tucson, Arizona, and one of the authors of the plan, said around 300 people had collaborated on the document.
“The plan will greatly accelerate energy efficiency in all sectors and enable Luxembourg, by 2050, to be powered 100 percent by renewable energy technologies, even as we build out its digital infrastructure in ways that create a more robust economy,” he said.
“If my estimates are to be believed, it will require a cumulative investment approximately equal to one year's GDP [gross domestic product] over the next 34 years.”
Overall, the roadmap proposed by the team stays close to the thesis popularized by Rifkin in his 2011 book The Third Industrial Revolution, which sees economic growth arising from the confluence of renewable energy with communications technology and clean mobility.
On energy, the Luxembourg plan makes four specific proposals: upping building efficiency, finding cleaner alternatives to oil, covering up to 70 percent of all consumption through renewable sources (up from 3 percent today), and decreasing the share of imports.
It also advocates creating a national energy internet, a legal framework to promote renewable self-consumption and a "smart district" lighthouse project, while moving to a 100 percent electric-vehicle fleet by 2050.
“The phase-in and integration of the Renewable Energy Internet and the generation of near-zero marginal cost renewable energy in Luxembourg will enable every business, neighborhood, and homeowner to become a producer of electricity,” according to the plan.
The transition will lead to “a vast increase in aggregate efficiency and productivity, and an equally dramatic reduction in ecological footprint and the marginal cost of doing business,” predict the authors.
While the vision seems farfetched, Laitner told GTM that Luxembourg lawmakers were taking the plans seriously because of concerns over slowing economic productivity across the duchy.
Luxembourg is slated to spend around €2 billion (USD $2.2 billion) on energy this year, but the Rifkin study cites International Energy Agency data suggesting only 20 percent of this goes toward useful work.
Laitner has calculated that a mix of policies and price or investment incentives could result in a 30 percent reduction in energy requirements per unit of GDP, helping boost economic growth and job creation. “It’s a serious proposal,” he said.
A Luxembourg "social innovation network" called IMS (for "Inspiring More Sustainability") will now be responsible for assessing what elements of the third industrial revolution roadmap can be “taken to move this ahead,” according to Laitner.
While a website dedicated to Luxembourg’s third industrial revolution plan claims the duchy will be the first territory in the world to embrace Rifkin’s philosophy, Laitner said a number of other regions in Europe are studying similar proposals.
They include Lille, France; Rome, Italy; and Utrecht in the Netherlands. More widely, Rifkin is credited with having influenced policy at the European Union level, as well as advising leaders in Africa, China, the United Nations and the U.S.
Stephen Haw, a partner at the U.K. consultancy firm Baringa Partners, said, “We absolutely agree with the vision.”
However, he said there could be major challenges ahead for the roadmap.
Evolution in technology and markets may only enthuse early adopters, he said, so there would need to be a focus on what happens "behind the scenes...so customers don't have to engage all of the time.”
“The smart energy system is thrilling for the tech-savvy, affluent customer. But action and ownership is needed to avoid a two-track market where the fuel poor, vulnerable and non-homeowners lose out. We are putting a great burden of hope on the consumer, and most likely we will be disappointed. 'Prosumers' are a romantic concept, but potentially useless as an instrument for informing public policy, market change and business model design," said Haw.