Climate change: what would have Edward Theodore done?

Another Theodore on the other side of the world Edward Theodore, Treasurer and Premier of Queensland, and for a short period Treasurer of Australia, led the charge for a democratic socialist response to the imbalance of power in the marketplace.

The creation of state-owned enterprise meant that goods and services could be produced with reduced exploitation and could compete in the market place for consumers. The very existence of the publicly owned enterprise changed the behaviour of intensified capital to reduce exploitation of both the workforce and the marketplace.

While regulation could be utilised to effect change, without strong leadership willing to take on political elites the traditional democratic capitalist response will be no more effective than the policies of creating a price for carbon or for pollution.

So what would be the Democratic Socialist policy option?

The creation of a publicly owned corporation that would establish low emission and renewable energy power stations which would sell into the national electricity market is more viable.

This publicly owned company would be exempt from all income taxes and state payroll taxes, thus leading to cheaper costs for low emission and renewable energy. The publicly owned low emission and renewable power company would have a mandate to reinvest all profits back into renewable and low emission technology.

The publicly owned company would not only have a mandate to operate domestically but also to export its technological improvements either under license or directly to other countries.

The Queensland government transformed the energy sector by mandating that 13 per cent of energy must be sourced from gas. So, too, could the federal government by going much further by mandating that energy retailers must source 25 per cent of energy from low emission technology and 15 per cent from renewables by 2030.

To assist this goal, low emission power generation and renewable power generation stations should have their income tax reduced by 50 per cent. So rather than putting a price on carbon, the policy should be to reduce the tax on new economic activity in the generation of low emission and renewable energy.

In other words by mandating the mix of energy and making investment in both low emission and renewable energy attractive, and the end product cheaper than the carbon polluting sources, we will change the market.

The state can be a powerful force in building new industries and providing jobs, rather than trying to impose penalties and costs on the old energy producing sector.

A carbon price would not have seen any change in the Queensland energy sector; it was economic rationing that did this, it forced investment in, and the creation of, new industries and importantly new jobs.