DeFazio muses on cap-and-trade & the 2010 gubernatorial race
Kari Chisholm
In separate conversations with the O and WW this week, Congressman Peter DeFazio talked about his future political plans - as well as his thoughts on a cap-and-trade policy to reduce atmospheric carbon. (His maverick position seems to have upset some typically supportive folks in the environmental community.)
First, the gubernatorial question. He told WW a bit about the timing:
When are you going to decide if you run for governor in 2010? I don’t know. A traditional time line for a viable candidate to announce would be Labor Day.
He expanded on those comments with the O's Jeff Mapes, including some thoughts about potential opponents:
DeFazio had a few things to say about his deliberations over whether to run for governor. He talked about a "lack of leadership" at the state level and the need for big structural changes. And he did indicate that he may be thinking of an early September deadline. "I don't think you can start too much later than that and do what you need to do to run a viable race," he said.He also said he doubted that Rep. Greg Walden, R-Ore., would run, saying of Walden: "By all signs he is on the (congressional) leadership path now." And he had another of his rather pointed comments when asked if he thought former Gov. John Kitzhaber would run.
"I would be a little surprised," he said. "When he left office he didn't seem thrilled about..." And at that point, the rest of his sentence was drowned out by laughter from editorial board members who recalled how Kitzhaber had famously pronounced the state "ungovernable" as he was leaving office.
As for cap and trade, here's what he told Mapes:
DeFazio has also become increasingly scathing of the push by the Democratic leadership - in both Congress and the Oregon Legislature - to set up a "cap and trade" system aimed at reducing greenhouse gases blamed for global warming.To DeFazio, who has always had a finely honed populist outrage with Wall Street, the idea of creating another financial market is folly.
"It is just infinitely game-able," he said, relating how Europe is now trading in "carbon futures" that give industries additional emission permits now in exchange for, say, trees that may or may not be planted in the future.
"These financial people, I mean, they are very smart people and they can figure out a way to monetize anything and it would just be nuts to go down that path."
That doesn't mean DeFazio is a climate change skeptic. He argues that it should be done with "old fashioned" regulation, of the same kind that reduced smog over our cities and cleaned the filth out of our rivers.
He expanded on the regulation idea with the WW:
I am a very old-fashioned guy. First you inventory the sources of pollution, then you cap them. You get people a schedule to reduce. You monitor them, and you fine the heck out of them if they don’t meet them [the standards].
Your thoughts?
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Apr 22, '09
Peter makes a lot of sense. I especially like this:
These financial people, I mean, they are very smart people and they can figure out a way to monetize anything and it would just be nuts to go down that path."
That doesn't mean DeFazio is a climate change skeptic. He argues that it should be done with "old fashioned" regulation, of the same kind that reduced smog over our cities and cleaned the filth out of our rivers.
I am a very old-fashioned guy. First you inventory the sources of pollution, then you cap them. You get people a schedule to reduce. You monitor them, and you fine the heck out of them if they don’t meet them [the standards]. <<
I'm old fashioned as well. This is the sort of thing the Democratic Party of decades ago would have supported, and given what we have seen in recent years, "These financial people, I mean, they are very smart people and they can figure out a way to monetize anything and it would just be nuts to go down that path."
makes perfect sense.
Now if both Peter and Dr. John run for Gov. that would be a tough choice. But at least we would have 2 outspoken public servants who would tell us exactly where they stand and have no problem standing in front of an audience and answering questions.
Apr 22, '09
He's absolutely right, and I hope to hell he runs. Cap and trade for CO2 is brought to you by the same people (and for the same reasons) as brought you collateralized debt obligations and the other toxic ingredients of the stew that is killing us now.
IN THEORY, cap and trade is just another form of carbon tax -- but in practice, it's a way to create a speculative market opportunity for financiers to profit from the right to pollute. The more you do to clamp down on the finagling, the more you wind up with a straight carbon tax.
DeFazio is the kind of guy who could sell a green tax shift, a switch from taxing the things we WANT more of (jobs, investment, savings) to taxing the things we DON'T WANT (pollution, use of nonrenewable resources, releasing toxics). Once you get your tax system to create the incentives to reduce pollution, you don't have to work so hard via regulation, AND you can help working folks by making jobs and employment more profitable than replacing people with machines.
See "Tax Waste, Not Work" by the excellent outfit "Redefining Progress." (free 23 page summary here:
http://www.rprogress.org/publications/1997/TaxWaste_sum.pdf)
11:35 p.m.
Apr 22, '09
There is a lot to like about DeFazio, but in his statement "I'm a very old-fashioned guy" he captures my major concern. The global economy is changing at warp speed. China's rising. India's rising. Brazil's rising. And so on and so on. I think we in Oregon need to change and engaged in global trade in ways we have not done in the past. I think that is our best economic future. I do not see DeFazio understanding this. I worry that the "old-fashioned guy" would try to take us back to some memory of our past Oregon economy - only there is no going back.
Apr 22, '09
There are old fashioned values we could use more of right now: honesty, candor, problem solving rather than preaching ideology, wit, civility, willingness to look at logistical details rather than just theory.
Dave, who do you think would be a better candidate to fit this?:
" I think we in Oregon need to change and engaged in global trade in ways we have not done in the past. I think that is our best economic future."
We need candidates in 2010 who engage in public debate and create a mandate for themselves should they be elected. I think we'd get more of that debate from DeFazio or Kitzhaber than from anyone else so far mentioned.
But if you know someone who would approach international trade even better than Vic Atiyeh ever did, please let us know.
Apr 22, '09
@Dave Porter: most of the ills associated with globalization have stemmed from people whose concept of history is knowing what happened last week, who have fallen for the idea that this round of globalization is somehow different from all the other ones.
And it's not. Sure, the toys are different, but the bottom line in the rise and fall of nations has never changed, and I'd far rather see someone in the Governor's chair who says that you shouldn't junk what has worked in favor of the trendy flavor of the month new wave idea without thinking it through carefully and seeing if it actually takes you where you want to go.
Given that Peter DeFazio has spent the last 29 years pushing against a tide of reaction that wanted to undo the entire Progressive Era (get rid of not just the New Deal but everything after 1906), he is absolutely in a good position to insist on a little "old-fashioned" regulation, like the kind that whizkids Clinton & Co. jettisoned (Glass-Steagall, e.g.).
Apr 23, '09
I'm troubled by DeFazio's temperament and what Mapes refers to as "pointed comments."
If you check Mapes's post, it begins with an exchange between Wyden's chief of staff, Josh Kardon, and DeFazio on timber issues. DeFazio's comments drew some pretty sharp words in rebuke from Kardon. Obviously, if DeFazio wants to be governor, he needs to work with our U.S. Senator, not irritate him and his staff.
When DeFazio talks about a "lack of leadership" at the state level, he is talking about our Democratic governor, and the Democratic majorities we elected to the state senate and state house. It was a long haul getting those majorities, especially after 16 years of Republican control of the state house. Doesn't DeFazio realize, if he wants to be governor, that he will need to work with folks like Peter Courtney and Dave Hunt, not suggest they lack leadership?
When DeFazio becomes increasingly "scathing" about efforts by state Democrats like Governor Kulongoski, and the chairs of the environmental committees, Jackie Dingfelder and Ben Cannon, to pursue a cap-and-trade system to reduce carbon emissions, and likens their efforts to Wall Street scams, doesn't he realize there are many Democrats in Oregon who support these efforts (including organizations like RePower Oregon), and that, if he becomes governor, he will need to work with them?
And I just don't get chuckling at the expense of former governor Kitzhaber with the folks down at the Big O. Kitzhaber is widely admired, and his endorsement is still sought after. This just seems reckless on DeFazio's part.
Are we going to have a race for governor here, and find a candidate to unite Democrats in 2010, or are we going to have a race between DeFazio and Novick to see who can offend the most of their fellow Democrats?
Apr 23, '09
The proper thing to do with Dingfelder, Canon and RePower Oregon is to tell them to take a hike (major cleaned up language) - "I will not be part of screwing the average Oregonian. You may want to feed billions to Wall Street - I don't."
That message will resonate with the average Oregonian. Following fools like Dingfelder & Canon will dramatically increase energy prices, hurt all Oregonians, especially the poor and ensure a Republican comeback.
Apr 23, '09
2 people I have known since long before blogs existed have questioned whether cap and trade is really the best road to achieve the goal, as their are potential logistical nightmares or worse.
I think Teddy K deserves all the criticism he gets--and I supported his election in the first place.
If Democrats can't question their own and must march in lock step, why are they different from Republicans?
6:04 a.m.
Apr 23, '09
So the takeaway from the interview is that because of a badly deregulated financial market, we should abandon all monetized / marketized solutions to problems, even if they work??
Every analysis I have seen, from the left, right, and middle is that cap and trade works to effectively reduce emissions.
Am I supposed to be excited about deFazio because he has "finely honed populist outrage"? Like Ross Perot or Huey Long?
Apr 23, '09
Paul g: Europe has cap and trade. Have their CO2 emissions dropped? No. Where is your evidence that it works?
7:50 a.m.
Apr 23, '09
@LT: I don't have a better candidate now. I do think the Democrats have a deep bench and some of our younger politicians understand the global economy much better than the older ones. I do think many of the Democrats now in Salem, as well as much of the Democratic base, probably, are stuck in some attitudes of provincialism, that is focusing just on what we can do in Oregon without regard for the larger world or the opportunities it presents. This worries me. I'm looking for a leader with global visions for Oregon.
@George Anonymuncule Seldes: We can both go after global markets and have Progressive Era style regulation of our economic activity. We need a solid system of regulation to make international trade work well. But I do want a Governor who understands in his/her bones that in the next few decades roughly 80% of the world's economic growth will be found in emerging markets and that China’s economy could well be twice the size of the US economy in 2050. Those markets are Oregon’s best opportunities for a solid economic future, IMHO.
Apr 23, '09
DeFazio may not be the final candidate for gov, but he is dead center on when he calls Cap and Trade a failed financial gimmick. He also hits close to home when he points out the lack of leadership in Salem from Gov K and other party leaders.
I will not easily vote for anyone trying to foist a financial gimmick onto the population that does nothing but encuorage manipulation of markets for private gain.
8:27 a.m.
Apr 23, '09
I certainly haven't seen any evidence that the European early growing pains had to do with speculators on the market; I think that's thin and would love to see evidence. And note DeFazio's careful "2006-07" notes - this isn't 2008 he's referring to. People agree Europe overallocated permits to start, and all the subsequent cap and trade systems have emphasized that measurement comes first so initial allocation is correct. There's now evidence that the European system is successfully reducing pollution, at a lower cost than old-fashioned legislation.
DeFazio also doesn't provide any evidence that the US's landmark cap-and-trade system, on sulfur dioxide, was played by the market. It was a spectacular success as far as I've seen.
8:36 a.m.
Apr 23, '09
Swamisan, the appropriate comparison is how Europe's emissions rates would have risen (or fallen) in the absence of cap and trade versus how much under different regulatory regimes.
I am just amazed at the rhetoric here. We are in danger of throwing out the baby with the bathwater. Not every marketization scheme has been a failure. Is anyone ready to argue that long haul trucking (deregulated under Carter), airline travel (Carter and Reagan), telephone service is worse now than it was, say, in the early 1970s?
Pollution tax credits are not a "gimmick." They have been around for nearly two decades and have a strong track record. Don't believe me, just delve into any of the natural resources literature. Cap and trade is just a variant on these methods.
I could take Kurt's phrase and turn it around: we should encourage manipulation of private gains for the public good.
We are still trying to learn what are the right lessons from the financial meltdown. The rise of new financial instruments combined with an asleep at the switch oversight system appears to be significantly at fault.
Unfortunately, it seems that some lessons are that shrill, outdated anti-capitalist rhetoric will sell with some segments of the left. if we go down that road, I predict we'll soon cede our majorities back to the GOP.
8:57 a.m.
Apr 23, '09
From what I've seen and read, it seems like Evan and Paul have this about right. I find DeFazio's commentary unfortunate.
I get that the guy is a "maverick" and wears it well, a lot of the time. But this interview with Mapes is not his shining hour.
Apr 23, '09
The comments on this blog have highlighted the key story here: DeFazio has generalized the issue here with the cap and trade mechanism, and unfortunately added to the problem rather than to the solution.
The main problem with EU ETS was overallocation: Oregon and the WCI and the EPA all intend to start MANDATORY GHG emissions reporting on 1/1/2010, well in advance of the first trade (i.e. 1/1/2012). This will go a long way toward preventing overallocation.
And the current legislation in the OR Leg is SB 80, which does not mandate a cap and trade. It mandates that the DEQ, ODOT, and OPUC plan and make rules to achieve OR statutory GHG goals. And they could move along the regulatory road that DeFazio prefers - in some instances that may be the best approach.
Cap and trade may play a part in achieving the goals, especially where the regulated community realizes that a well-regulated emissions credit market can achieve the emissions reductions at an overall lower cost.
But right now, it seems we have to deal with the unsophisticated posturing of an ambitious politician.
11:42 a.m.
Apr 23, '09
I see a lot of people defending cap and trade, which is fine. I don't see much addressed to his other point, that you can also simply regulate the bad stuff. Putting aside current sentiment, why is it wrong or unfortunate to point this out? I hear the same demonization of single payer--that no one who believes in it should say so, because that's not the most palatable plan.
Maybe he has an overly paranoid view of cap and trade; can you blame him based on recent wall street events? But that misses the point--it's valuable that defazio is pressing the discussion.
Delaney, too much partisan pollyannish behavior is why the PMA scandal can't get an ethics hearing, why Murtha is powerful despite admitting he's corrupt, etc. Defazio's Right.
Apr 23, '09
I've decided to support Peter DeFazio for governor.
He has a lot of good ideas.
And his worst idea - his economic illiteracy on global trade issues, will be minimized if he is in Mahonia Hall in Salem rather than in our national capitol trying to Smoot-Hawleyize us.
Apr 23, '09
Historic event, TJ--you and I agree on something. Thank you for saying this:
"I see a lot of people defending cap and trade, which is fine. I don't see much addressed to his other point, that you can also simply regulate the bad stuff. Putting aside current sentiment, why is it wrong or unfortunate to point this out?"
Apr 23, '09
Tory Joe,
"DeFazio's right"....therefore, DeFazio's right. That's your argument? God save the Queen.
There are reasonable arguments for regulation via a carbon tax, and DeFazio is entitled to make them. And then he should build a consensus among his colleagues, introduce some legislation, guide it through Congress, and get it done. I don't see him doing that.
There are reasonable arguments for cap-and-trade, as seen above. Those folks seem to be trying to build a coalition (RePower Oregon), and they have drafted legislation. They are trying to get consensus on SB 80 and get something done.
Unfortunately, DeFazio is going about likening advocates of cap-and-trade to corrupt Wall Street scammers and Enron crooks. I can't imagine his zingers sit well with many intelligent and honest Democrats in Salem trying to craft a solution to reduce carbon emissions.
An acerbic maverick who doesn't develop consensus among his colleagues and build coalitions to get things done may not be a good fit for Governor of Oregon.
Apr 23, '09
I guess we disagree. I hear DeFazio asking the same logistical questions about cap and trade that some people are asking about the Merritt Paulson plan to bring MLS to Portland.
In either case, asking how it would be paid for is not a "zinger".
I happen to like Peter DeFazio. I don't think his "zingers" are as sharp as some of the remarks we have heard from Novick.
SB 80 will or won't get out of committee, pass the Senate, pass in the House.
And I'd be careful of remarks like "many intelligent and honest Democrats in Salem trying to craft a solution to reduce carbon emissions".
Is it possible to be honest and intelligent and question the details of SB 80? If not, that could be a problem. "We have this great idea you should believe in" tends to make some people run away fast if they feel they are being told to obey and not ask questions.
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