Climate change: what would have Edward Theodore done?

With the growing debate about global warming and the developed world’s options, it is useful to delve into our recent past to look for alternative policies.

The current ALP policy is to develop an emissions trading scheme, essentially to create complex derivatives to fix the market - a market solution for market failure while trying to minimise the cost to the disadvantaged in our society.

The Greens’ solution is a Carbon Tax putting a price on the cost of pollution. It is less complex but it will be highly regressive. Those least able to mitigate their carbon imprint will be hurt the most. Polluters will adjust their behaviour by investing in new technologies at a rate equivalent to the marginal cost of the new tax. Consumers, where there are no ready alternatives, will have to pay more for the product or services.

Both of these measures will lead to gradual change, if the proponents of the dangers of global warming are to be believed both of these measures will be far too slow to mitigate the social, economic and environment costs of global warming.

In effect they are window dressings or a sop to the young generation commencing to exercise their political will in our society. They like to think that they can change society and see either a carbon tax or an emission trading scheme as a symbol of their empowerment. It does not matter if neither option will avert the crisis, what matters is that they are either listened to or ignored, empowered or irrelevant.

The Coalitions response under Tony Abbott is to turn its back on the Chicago school and return to old fashioned paternalistic conservatism, thus rejecting market solutions in favour of state regulation. This may be of course be a viable alternative if there is a real commitment to fixing the problem. However the underlying problem with Abbott’s position is to deny the need to take drastic measures just as he denies the existence of global warming as a serious threat to human inhabitation of our planet. Every time a regulatory approach threatens his political heartland he will fold.

The Twiggy Fortescues and Clive Palmers will make a phone call and the regulatory cost will suddenly become too great to be implemented.

What then should political activists who want to secure policies to avert the global crisis do? Should they continue to seek the political implementation of market-based schemes for the inner glow of fulfilment rather than saving the world or should other options be explored?

In the early days of the development of intensified capital through trusts and public corporations many countries experienced similar issues.

The power of intensified capital brought with it an imbalance in the market; no longer did supply and demand meet to create the price in the marketplace, capital was able to set the price with substantial mark ups. The production of the goods and services were often exploitative.

Democracy in the main was the mechanism that was used to achieve a balance between the rights of ordinary citizens and the new creations of intensified capital.

Theodore Roosevelt in the United States led the charge of Democratic Capitalism by empowering the state to regulate the market place to create a more even relationship between individuals, small firms and the new trusts or by products of intensified capital. His anti-trust legislation was designed to stop the exploitation in the oil, railway and meatworks.