"Latin America and the Caribbean has the most valuable capital."

"We have 8 billion people in mortal fright right now. Floods, rains, hurricanes, heat waves, fires. We're seeing enormous destruction of infrastructure. It's really a dangerous situation, but it's also an opportunity."

This is Jeremy Rifkin, economist, sociologist, political and environmental activist, business consultant, lecturer and author of more than twenty books, the most recent of which is entitled Planet Aqua, in which he calls for renaming the place where we live to recognize the role of water in all life-support systems.

The expert's central approach to climate change is based on the need to create a new economic model that takes advantage of technological advances to consolidate the Third Industrial Revolution, without further degrading nature and generating more equity. About the region, Rifkin says that it has the possibility of being emblematic of this revolution because of its natural privileges.

Rifkin was the keynote speaker at the I Economic Forum of Latin America and the Caribbean, organized by CAF - Development Bank of Latin America and the Caribbean - recently in Panama City.

Professor Rifkin, are we facing the worst crisis in history?
Yes, but to solve it we have to redo the entire economic model. We cannot use the textbook we have now. The Enlightenment, the Age of Progress, the Industrial Revolution, all the things, how we approach science and how we organize the economy, all of that is what has brought us to this tipping point of climate change.

How do we build that new model?
In 2001, working with the European Union, we decided to look at how the big economic model changes had happened, to see if we could get a roadmap. And we discovered that there had been a couple of big economic paradigm shifts, both related to infrastructure and that they came together through history. They had a common denominator: a time when five technologies emerged by chance and then converged to create an infrastructure that changed the way we organized every aspect of our lives.

What are these five distinct technological revolutions?
The first, new communication revolutions. The second, new energy regimes. The third, new modes of mobility and logistics. The fourth, new ways of treating and managing water, which is the essential component of the other three. And the fifth, new approaches to inhabitants.

The First Industrial Revolution was in the 19th century...
Yes, in Great Britain. At that time, the revolution in communication was steam printing. No more manual presses. They coupled that with a telegraphy system in the latter half of the century that allowed instant communication. The power system was collapsed; they had exhausted the forest. So they went down to the ground and dug out the coal to produce power and coal air. The mobility revolution was rails and locomotives. As for the water revolution, they were the first, since the fall of Rome, to put in very extensive water systems and purification systems. The people revolution was urban development because the rails went from city to city. That led us to national markets, nation-state governance, trading companies, etc.

What was the second model change?
The Second Industrial Revolution was the United States in the 20th century. The communications revolution was Alexander Graham Bell's telephone. We connected the continent in a very short time. The energy revolution was the finding of oil in Texas. The mobility revolution was Henry Ford's internal combustion engine. The water revolution was creating these big hydroelectric power dams that were then replicated around the world. That took us from urban to suburban development by highways; and it took us to globalizations and government institutions like the UN, the World Bank, the Monetary Fund, the OECD, etc.

And what do you see now?
What we see now is the Third Industrial Revolution. The communication revolution has already emerged: the Internet. We have 4.5 billion human beings connected with a small telephone in their hands, a device that has more computing power than the instruments of the astronauts who went to the Moon in the 1970s. I want to emphasize that everything is distributed. We have an energy revolution, with millions and millions of people around the world harvesting the sun and the wind; the mobility revolution, electric and battery-powered transportation, and increasingly with autonomous transportation, managed with big data through Internet communications.

What is happening with water?
The water revolution is that we are not getting out of water. We go from droughts to floods, but water molecules are not disappearing from the planet. They have been there for millions of years. What changes is when they fall, in what volumes, and when they do not. Floods, rains, warming, fires mean that the hydrosphere is redetermining a whole new ecosystem for the planet. There is no way to control it. We have to adapt to it instead of adapting it to us.

So where is the water revolution?
The water revolution is microgrids. There will be millions and millions of micro water grids, all distributed to collect water on the walls and the roof. You bring it to the ground, store it, and when there are droughts and heatwaves, you distribute it using Artificial Intelligence (AI) to do that.

Is all this going to transform the habitat?
The habitat revolution has to do with the move to 3D imaging. This overall framework determines a big change. It takes us from the subtractive manufacturing revolution of the first two industrial revolutions to the additive manufacturing revolution of the third. This is crucial for everything from tariffs to governance. In those first revolutions, you took a huge amount of material from nature and spent it all to create a final product. And that meant we ended up with half a thousand global companies, which account for a third of the world's GDP. These companies have only 65 million of the world's 3.5 billion workers. And so a two-century revolution was created that has gone mainly to the few, rather than the many.

What is additive manufacturing?
I'll give you an example. An architect named Mario Cucinella in Italy built a house out of clay in a couple of days. Zero emissions. Then he can move from a traditional seller-buyer market, from previous industrial revolutions, to a network of users from a supplier in the Third Industrial Revolution. He could then send the instructions for that house to a developer in the Philippines, putting them on his cell phone, at close to zero marginal cost, in 30 seconds. And this developer could build as many buildings as he wanted by paying a license fee. United Arab Emirates is going to have 25% of its buildings 3D printed by 2030. Saudi Arabia has 500 billion of investment funds moving forward. It's a tremendous shift. We know that, for every dollar we invest in this infrastructure, we have a $3 return in GDP.

There is no discussion about the great possibilities that AI brings for humanity, but at the same time there is debate about its high demand for electricity. Isn't that a big barrier?
That's the problem now, in terms of whether we can make this transition. In 2019, the amortized cost of solar and wind fell below all other energy; well below nuclear, oil and natural gas. The amortized cost continues to fall; the marginal cost is close to zero. In my book Planet Aqua I mention a study of 12,000 thermoelectric plants. You take uranium, oil and natural gas to heat water. The water creates the steam that drives the turbines for electricity. What they found in this study is that, if you use the sun and wind, which is cheaper, at least to heat the water and create the steam to drive the electric turbines, you save 95% of the water.

How is AI going to be used?
Elon Musk and some people are naïve about it. AI will be used for research and as executive assistance, but the primary mission of it is going to be to drive and manage the communication, energy, mobility, water and habit infrastructure of the new revolution.

Is the private sector part of the solution or part of the problem we are experiencing?
It is the solution. The market is talking, except that we are changing from the seller-buyer model to user networks. And the big business is going to be for small and medium-sized high-tech companies around the world. The technology is very distributed. You can ship software from one side to the other without paying tariffs. Someone develops it on the other side and pays you the fee. Think about the rise of medium and small high-tech companies around the world.

How do you look at Latin America and the Caribbean?
It has 650 million people and 60% of all the world's biodiversity. In this it is the richest region on the entire planet. It is impressive. There is an opportunity to move the region to world-class status for its people, because the infrastructure of the Second Industrial Revolution has not been fully developed, except in Brazil, Chile, Colombia and a few other places. There are not a lot of old interests involved, although of course there are still some fossil interests. That's good, because you don't have the old codes, regulations and standards. You start from scratch. That's a big step forward. If there is the will and resolve to make the change, that's another issue.

Can you elaborate a bit more on what this opportunity means for Latin America and the Caribbean?
We studied everything in the region, but what really struck me is that it has the most valuable capital in the world. We tend to think in the modern economy that capital is machines, inventory, return on investment, intellectual property rights. That's not capital. In nature, the only capital is the primary production of photosynthesis. Everything else we take to create our economic systems. That's the only capital that exists, and that's not a joke. What struck me when I looked at Latin America and the Caribbean is that 60% of all the biodiversity on the planet is in a very small portion of the world's land mass. Latin America and the Caribbean have everything to be emblematic of the next revolution. This is really a big deal.

And how do you unlock the potential of that revolution?
What I would suggest is to bring together universities, industry and trade associations, NGOs, governments and institutions to address this in 'deep dive' seminars. They have the talent, they need to come together. In North America there are some experiences.

What could be a good example?
We are going to move more towards bioregional governance because climate disasters don't care about political boundaries. Governments that share ecosystems are expanding their action to prepare, rescue, restore and maintain their ecological resources. The Great Lakes region accounts for 20% of the planet's remaining freshwater. The eight U.S. states and two Canadian provinces that make up the region are equivalent to the world's third largest economy and decided to create a $250 million to $300 million innovation center to open in 2027 to address all of this.

What is the role of geopolitics in this new revolution?
Everyone thinks we are going back to geopolitics. No, no more nation states and all that. This is what nobody seems to understand.

Professor Rifkin, what can you tell people about the critical moment we are living through?
First, that we have to adapt and that humanity has been able to adapt throughout history and, in that sense, that we are going to get out of this situation. And, second, that science will give us an answer.