Can Co-operative Structures Solve Public Policy Problems?

Parkland Institute:Co-op - Friendly Think Tank

David ThompsonAurora Institute

Vancouver, Canadawww.aurora.ca

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Parkland Institute

• Alberta research network

• In Faculty of Arts, University of Alberta

• Non-partisan

• Progressive think-tank – bridge academy and public/media

• CCPA, Fraser Institute

• Academic standards – peer review

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Parkland - Outputs

• Research reports, books, occasional papers• Conferences

– “Power for the People: Determining our Energy Future”

– Nov 17-19, 2006, University of Alberta– Keynote: John Ralston Saul– Go!

• Media – op-eds, articles, interviews, etc.• Policy options to solve problems

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Parkland – Research Areas

Public Policy Issues:• Energy

• Environmental problems

• Health care

• Poverty and social justice

• Democracy and government

• Fiscal, economic issues

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Traditional Public Policy Solutions

• Regulation– Statutes, regulations, codes– Essential, but not enough

• Fiscal– Spending and taxation powers– Essential, but not enough, not done here

• Voluntary approaches– Ineffective, inefficient, costly – OECD (2003)

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Traditional solutions not effective

• Why?– Create incentives for good outcomes– Accept structures that produce bad outcomes

• For-profit business corporation– Profit good motivator to increase production– Profit good motivator to reduce costs– Increasing production or reducing costs not

always a positive thing• Example: environmental harm from production and

externalization of costs

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Policy issue: Energy Security

• Raises questions of:– resource conservation– environmental protection– resource rents for owners (“royalties”)

• Parkland recommendations included structural changes: – Democratic management– Public interest mandate, not just profits– Didn’t address cooperatives specifically

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Policy Issue: Corporatization and Privatization

• Sell City drainage function to EPCOR?

• Huge asset – many billions of dollars

• EPCOR corporatized utility owner/operator– Power and water utilities here, Canada, US– No public control or accountability– Transparency very restricted

• Thus significant public debate on drainage

• City council vote

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Corporatization and Privatization

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Corporatization and Privatization

Parkland Report and presentation to City Council:• Reject proposal to sell off drainage

– Successful, despite millions spent by other side

• Reform EPCOR– Convert to utility cooperative– Utility cooperatives common throughout the world– Accountable to people served– Serve broader range of goals than just profit

maximization – e.g. environment

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Policy issue: Energy and democracy

• Parkland conference: “Power for the People” (Nov. 17-19)

• Panel: Can we transition to a post-carbon economy?

• Major challenge: Energy corporations– extremely profitable, politically powerful– aggressive at protecting their interests

• Can we ever succeed with this structure in the industry?

Transforming the Fossil Fuel Industry:Private sector ownership,Public interest mandate

Power for the People Conference Parkland Institute

University of AlbertaNovember 17-19, 2006

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Ownership vs. Interest Served

Public ownership Private ownership

Public interest

Private interest

Business corporations

Charities

Churches

Social enterprise

Crown corporations

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Issues in transforming the industry

• Legal capacity

• Financial capacity

• Trade challenges

• Corporate culture

• Political will

• Others…

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How is this emerging structural policy approach different?

• Old approach: alter rules (regulatory or fiscal)– Corporate programming conflicts with rules– Industry not cooperate / oppose– Limited success

• New approach: alter industry– Industry programming mirrors rules– Industry comply, cooperate– Far-reaching outcomes

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Why do we need a new policy approach?

• Why not just continue with the traditional policy instruments?

• Because outcomes not good enough in those policy areas

• Einstein:“Insanity is doing the same thing

over and over,

and expecting a different result”