This week, as Donald Trump hammered on Amazon for taking advantage of discounted shipping rates from the U.S. Postal Service, some progressive-minded readers felt a certain cognitive dissonance. When a tetchy president takes on a voracious mega-retailer and its owner (the world’s richest man), who were they supposed to root for, again?
Not taking sides does not appear to be an option. This is a strange era, when policy disagreements have become personal and vindictive, with even huge corporations seeming to turn into anthropomorphized characters in a struggle for moral righteousness. With a profoundly divisive leader in office, it might be tempting to think of Apple and Starbucks and Amazon as allies in the Resistance when they become targets of the president’s frequent attacks on private businesses and respond in self-defense (or, in Amazon’s case, keep mum).
But this way lies madness. By definition, corporations serve shareholders, not citizens.
This distinction is especially important in the automotive sector, where the stakes are only as high as the fate of the planet. Transportation is now the number-one source of carbon emissions in the U.S. On Monday, the Environmental Protection Agency announced that it will revise federal fuel efficiency and greenhouse gas emissions standards. The CAFE (for Corporate Average Fuel Economy) standards that President Obama set in 2012 were ambitious: They mandated automakers to double fuel economy for cars and light trucks to 54.5 miles per gallon by 2025. Now those requirements are “not appropriate,” according to an EPA press release, which also announced the start of the process to develop replacement figures.
Environmentally conscious people are duly outraged. But the Alliance of Automobile Manufacturers—a group of twelve automakers that, in a 2017 letter to the EPA, called the Obama-era regulation “the product of egregious procedural and substantive defects”—is not. The Alliance (Ford, BMW, Fiat Chrysler, Ford, General Motors, Jaguar Land Rover, Mazda, Mercedes-Benz, Mitsubishi, Porsche, Toyota, Volkswagen Group of America, and Volvo Car USA) called the EPA’s determination “the right decision.”
The federal government’s determination to rethink CAFE should come as little surprise, given the Trump administration’s propensity for deregulation. Somewhat more striking is the sense of betrayal that some advocacy groups and publications seem to feel toward the automakers that lobbied for it.
The environmental group Greenpeace, for example, swiftly jumped on Ford’s hypocrisy in supporting the EPA’s back-step, via a spoof advertisement of a new SUV model, the “Ford Future,” that comes equipped with air masks to fend against the noxious pollutants of an unregulated environment.
The Sierra Club also had their whack at the company’s regressive lobbying stance back in January. “Given their public positioning, one would think that Ford and GM would be among the first to defend the one key climate action available to automakers: fuel efficiency standards,” wrote the environmental business publication GreenBiz. “Not so fast.”
Spurred by CAFE standards and a more climate-conscious global market, carmakers have indeed invested in electric powertrain technology, and many have been expanding their plug-in offerings. Ford, BMW, GM, and Toyota also have various “smart city” mobility offerings, and they tout their climate-friendly benefits. (Remember’s Toyota’s climate-change-themed Winter Olympics commercial?) It’s both good green optics and a canny bet on the profit potential of a future world that deemphasizes private car ownership.
Ford’s efforts to establish eco-cred have been particularly prominent: The company has been developing shared autonomous vehicles, spreading microtransit services, and investing in bikeshare. Earlier this year, it also announced plans to double its investments in electric vehicle development to $11 billion. Bill Ford, the executive chairman of the Ford Motor Company (and great-grandson of Henry), has been unusually outspoken among his industry peers in supporting progressive climate policy. “Today, our planet faces increasing challenges, the implications of which are profound: greater congestion in cities, the rise of human population, climate change and all its implications,” he wrote in a recent Medium post. “The cost of believing it is not real is just too high.”
When the country’s largest car manufacturers go out of their way to appear progressive on climate and describe themselves as “mobility” companies, they’re going to invite criticism when they act like what they fundamentally are—vendors of carbon-emitting machines. But that criticism also seems somewhat naive: Of course car companies want looser environmental regulations. Trucks and SUVs remain the best-selling vehicles in the U.S.; Ford’s current profits are built on a mountain of F-150s. Making those vehicles comply with new CAFE regulations has been a costly burden—Ford extensively re-engineered their pickups with aluminum bodies and more-efficient turbocharged engines in an effort to meet federal environmental guidelines, and, as Bloomberg reported in 2016, missing the looming 2025 CAFE target was a real threat. Now, in the Trump regulatory era, Ford, GM, and Fiat-Chrysler are leading the shift across Detroit to manufacture more SUVs and trucks and fewer compacts, even as they ready their assembly lines for plug-ins.
There are subtleties here. The Automotive Alliance stresses that it has not been pressing the EPA to scrap CAFE, but to re-evaluate it using current emissions data and market trends. In a statement provided to CityLab, a Ford representative said similarly that the company supports “clean car standards through 2025” and that it “has not asked for a rollback.” He continued, ”We will continue to work with EPA, NHTSA, and California on one national standard with additional flexibility to help us provide more affordable options for our customers.”
Car companies have reason to use cautious language—California’s fuel economy and tailpipe requirements are more stringent than federal ones, thanks to an EPA waiver that is also being “reexamined.” By now, twelve other states and the District of Columbia have also adopted California’s emissions rules, and have threatened to sue if the rules are changed. These higher state standards, guarding some of the largest auto markets in the country, could present a minefield for manufacturers if the EPA dramatically rewrites the existing federal rules but doesn’t succeed in revoking the waiver.
By supporting CAFE “revisions,” and by ramping up SUV and EV production, the automotive world seems to be hedging their bets—on one hand, they’re describing and making some investments towards a greener future, and on the other hand, they’re inviting the elimination of the few meaningful tracks available to move toward it. The fate of the future climate may hinge on the former bet, and sadly for humans, its longer-term pay-off may be less meaningful to shareholders now. Left untouched, the CAFE standards are projected to reduce U.S. oil consumption by as much as 1.5 million barrels per day and cut carbon emissions by 280 million metric tons. That’s the equivalent to taking 72 coal-fired power plants offline every year or removing some 59 million vehicles from the road, as has been variously reported. The standards aren’t perfect, but researchers are unanimous in the conviction that more federal policies to rein in greenhouse-related emissions, not fewer, are necessary to mitigate the most dangerous extremes of global warming.
It might be disappointing to now conclude that, despite what their advertising might indicate, carmakers don’t entirely share this conviction. But they can’t really be expected to cheerfully submit to regulations that hurt their biggest profit centers, or not to take advantage of opportunities to change them. This, after all, is why regulations exist: to keep private companies from damaging the public good (a nebulous concept, but also pretty clear in the face of climate change!) in their pursuit of profit.
Private and public interests can line up, of course—usually, to the extent that what’s good for society is good for the bottom line (and short-term-minded investors). Where these interests don’t match is where the public should be paying closer attention. Perhaps it’s a sign of this era’s reduced expectations for governance that the idea companies can be trusted to self-police doesn’t seem demonstrably nuts on its face.