It appears that presidential press secretaries are not the only ones doing headers into the hedges to avoid having to answer potentially embarrassing questions. Sean Spicer’s dive into the history books made for great journalistic sport and allowed Melissa McCarthy to show-OFF her considerable comedic talents.
Spicer’s hiding in the greenery is not exactly what’s implied by the term hedging. However, as I will explain a bit further on, companies and organizations like Google, Shell, Bank of America, the US Chamber of Commerce, and Amazon are doing their own version of the Spicey--a hedging maneuver they would have preferred to remain hidden from journalists and the climate defense community. Maneuvers the climate community should wish them not to engage in in the first place.
Investors understand hedging to be a strategy designed to offset a potential loss on one investment by purchasing a second investment that is expected to perform in the opposite way. Most of us engage in the practice whether we’re aware of it or not. The purchase of health or auto insurance, for example, is a form of hedging.
Hedging in politics is not very different from pairing investments or paying for insurance. The goal in each of the cases is to offset a potential loss through a countervailing action. In politics, the loss usually being hedged against is access rather than dollars.
President Trump divides just about everything political he or his administration touches. The latest industry Trump has caused to turn against itself is automaking.
Since Day 1 of the Trump presidency, the auto industry has been hoping to re-negotiate the deal it struck with the Obama administration on auto and light truck fuel efficiency standards (CAFE) for the period 2021 through 2025. The industry thought its wishes were answered when in April 2018 the then-EPA Administrator Pruitt announced the Trump administration would be rolling back the auto efficiency rule that the Obama administration had negotiated with the automakers in 2010.
Not long after the announcement, however, wisher’s remorse began to settle on the sector. It was clear from the beginning that the dialogue between the California Air Resources Board (CARB) and the administration would not go well. The only thing the two sides seemed to share was antipathy for each other.
Without much warning, the administration cut off any further discussions with CARB in February 2019 and announced it would be going ahead with its Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule that freezes the standards through 2025 at the 2020 level—a number much below what the industry is both capable and willing to meet.
Joel B. Stronberg
Joel Stronberg, MA, JD., of The JBS Group is a veteran clean energy policy analyst with over 30 years’ experience, based in Washington, DC.