THE ENERGY TRANSITION AND THE THIRD INDUSTRIAL REVOLUTION IN FRANCE
On July 30th 2014 the French Council of Ministers adopted a bill on « the energy transition for green growth. » The text will be discussed and amended, then passed by Parliament in 2015.
This is a project that is going in the right direction.
The goals are ambitious:
– Lower the share of nuclear power in electricity generation to 50% by 2025, compared to 75% in 2012,
– 40% reduction in emissions of greenhouse gases by 2030, leading to a 75% reduction by 2050, compared to levels in 1990,
– 50% reduction in final energy consumption by 2050, compared to 2012 consumption,
– Reduce final energy consumption of fossil fuels by 30% by 2030, compared to 2012,
– Increase the share of renewable energy to 23% of energy consumption in 2020, and 32% in 2030, compared to 14% in 2012,
– 50% reduction in waste accepted at storage facilities in 2025, compared to 2010, reuse or recycle 70% of construction waste in 2020.
The first part of the bill deals with the priority for energy efficiency in buildings, transport and the development of the circular economy.
For buildings, the main innovation is the requirement to significantly improve energy efficiency whenever major work is done (façade cleaning, re-roofing, attic conversions, etc.). As households rarely have work done purely to improve energy efficiency, the idea of combining energy-saving measures with ordinary maintenance or home improvement work is excellent.
Low energy consumption and low CO2 emitting transport is favoured: clean vehicles, infrastructure for plug-in electric and hybrid vehicles, development of advanced biofuels, carpooling, transport and distribution for supermarkets, driving bans for poor air quality.
The circular economy is endorsed for encouraging innovation in product design, integrating an extended lifespan early in the design process. It favours recycling and cooperation between firms: what is waste for one company is raw materials for another.
The second part of the project aims to diversify the energy mix by strongly promoting renewable energy (biomass, solar, wind, etc.) and enhancing their effectiveness in the existing power grid. For nuclear power, safety and the supply of information to citizens are further improved.
The third part deals with the governance of the system. The operating principle is sound: « turn your back on a top-down system dominated by a few experts and policy makers, in favour of a transparent co-implementation of policy guidelines ».
The energy mix is set up in the framework of one long-term program for energy. The nuclear energy production capacity is capped at its current level (63.2 GW). The government commissioner on the board of Electricité de France (EDF) may oppose an investment decision inconsistent with the long-term program for energy.
The territorial dimension is crucial: the regions are leaders in energy efficiency. They implement regional climate-air-energy plans and promote territorial platforms for energy renovation of buildings.
Some have criticized the bill, particularly because it makes a compromise with the nuclear lobby. France has the most powerful nuclear lobby in the world (by far). It is therefore difficult to avoid compromising with such a lobby!
The important thing is the start of a movement in the right direction. But we must be clear about the current movement. The Explanatory Memorandum suggests that the project promotes a new development without contradictions (it « aims to engage the entire country on the path of green growth that creates wealth, sustainable employment and progress ») and indicates that the project is part of a « harbinger of a possible third industrial revolution » movement.
No, this development is not without contradictions and the third industrial revolution has already begun.
The economist Joseph Schumpeter was able to analyse capitalism as a “continuous hurricane” with innovation as an engine, sometimes accelerating to create industrial revolutions. The first industrial revolution, based on steam power, began in the late eighteenth century and took place during much of the nineteenth century. The second industrial revolution, based on hydrocarbons and electricity, began in the late nineteenth century and expanded during the twentieth century.
The third industrial revolution began in the late twentieth century, is based on clusters of radical innovations articulating new information technology, energy and the environment. It will be implemented throughout the twenty-first century.
To understand these times of profound change, Schumpeter offers the bright concept of « creative destruction », destruction of an ancient world, creation of a new world.
The implementation of the future French law on « energy transition for green growth » must be part of a mobilizing and public-spirited project, which cannot avoid the process of creative destruction.
A movement of destruction and creation of real estate values is under way, because property values will increasingly depend on energy efficiency and environmental performance.
The reality is the same for employment. A study simulated a scenario of energy transition in France by 2030. This scenario plans 1.046,000 job losses (in new building construction, road transport, non-renewable energy, air transport) and expects 1,676,000 new jobs (in the renovation of buildings, renewable energy, public transport).
The challenge is a project which mobilizes territories and citizens, where job creation is significantly stronger than job destruction, where people, especially young people, gain new skills, and where new lifestyles, although using less energy, are more fulfilling than today.
Faced with this huge and exciting challenge, France cannot act alone. The energy and ecological transition will not occur in a narrow national framework, as proposed by some authors. It will only be possible in a European context.
Better still, the energy and environmental transition is an opportunity for a crisis exit in Europe, before its dialogue with other continents at the United Nations Climate Change Conference, to be held in Paris in December 2015.
 See Explanatory Memorandum and Bill – in French – adopted by the Council of Ministers on 2014 July 30.
 Explanatory Memorandum of the bill, page 9.
 Explanatory Memorandum of the bill, page 1.
 Explanatory Memorandum of the bill, page 4.
 J. Schumpeter. The theory of economic development (1911), Transaction Publishers, New Jersey, 2004.
 J. Carassus. Immobilier et bâtiment : valeur, développement durable et 3ème révolution industrielle. Réflexions immobilières IEIF n°66, 4th trimester 2013.
 See the significant impact of the level of the Energy Certificates on the price of individual homes in not tight housing markets in France Valeur verte des logements d’après les bases notariales, Notaires de France, Dinamic, 2013.
 P. Quirion. L’effet net sur l’emploi de la transition énergétique en France : une analyse input-output du scénario négaWatt, CIRED, Nogent sur Marne, 2013.
 P. Murer. La transition énergétique, Editions Mille et une nuits, Paris, 2014.
 M. Aglietta, T. Brand, Un New Deal pour l’Europe, Odile Jacob, Paris, 2013, see especially in the concluding chapter, Le développement durable: nouvelle frontière de la croissance pour l’Europe. The authors, experts in money and finance, make an explicit link between recovery from the financial crisis and energy and environmental transition.