Climate Change Policy and Partnerships

During 2009, the climate change policy landscape continued to evolve. The recession put economic issues at the top of government and public agendas. The Copenhagen summit fell short of producing a binding global agreement, and climate change legislation did not pass the U.S. Congress.

In the United States and elsewhere, we continue to actively advocate for comprehensive policy approaches that will provide a coherent framework for greenhouse gas (GHG) emission reductions, so that companies can move forward in transforming their businesses with a clear understanding of their obligations. GHG regulations can have a critical impact on an automaker's business, because they can have the effect of regulating what vehicles we are allowed to build and sell. Carbon dioxide (CO₂) emissions standards for motor vehicles are functionally equivalent to fuel economy standards, because the amount of CO₂ produced by a vehicle is proportional to the amount of fuel used.

Our global approach to product planning and policy participation is based on the science of climate stabilization. We accept that simply "not getting worse" is not good enough. The auto industry must work together with suppliers, government, the fuel industry and consumers to reduce CO₂ levels from transportation so we can help stabilize atmospheric CO₂ concentrations. Accomplishing this goal will require that all sectors of the economy, including the transportation sector, do their share. To achieve real and lasting results, all global stakeholders must make long-term commitments for a sustainable future.

In our major markets, the regulation of fuel economy and/or vehicle CO₂ emissions is becoming increasingly complex. In addition to competing federal and regional regulations, governments are taking diverse approaches to incentives for emission reduction through rebates, fees, "feebates," privileges for low-emitting vehicles and penalties for high-emitting vehicles. This creates a very complex policy environment, and it is one important driver of our strategy to develop fuel-efficient and advanced technology platforms that can be shared globally and tailored to the needs of our customers.

We hope that the information that follows helps to illustrate the diverse array of GHG and fuel economy regulations and incentives that are now shaping our markets. This section provides more detail on developments and Ford's involvement in:

• U.S. policy
  • Climate change legislation
  • Greenhouse gas and fuel economy regulation
  • Incentives and market-based mechanisms
• European policy
• Canadian policy
• Asia Pacific policy
• South American policy
• Renewable fuel policy
• Partnerships and collaboration
• Emissions trading