Climate Change

Concerns about climate change and growing constraints on the use and availability of carbon-based fuels affect our operations, our customers, our investors and our communities. The issue warrants precautionary, prudent and early actions to enhance our competitiveness, protect our profitability in an increasingly carbon-constrained economy and do our share to prevent or reduce the potential for environmental harm due to climate change.

We have responded to the significant risks and opportunities presented by the climate change issue by developing a comprehensive global strategy to reduce greenhouse gas (GHG) emissions from our products and processes while working cooperatively with the public and private sectors to advance climate change solutions. We are taking a holistic approach to the climate change issue, recognizing that it affects all parts of our business and is interconnected to other important issues, from water availability and energy security to human rights.

We are making progress in implementing our strategy, improving the fuel economy of our vehicles and reducing GHG emissions from our products and operations. According to the U.S. Environmental Protection Agency (EPA), for example, no automaker has posted a larger fleet-wide gain in fuel economy in the past five years than Ford. Based on EPA measurements, Ford's combined car and truck fuel economy has improved nearly 20 percent since 2004 – almost double the gain of the next-closest competitor. In addition, Ford's 2009 fleet-wide average carbon dioxide (CO₂) emissions were 5 percent lower than in 2008. In Europe, we have reduced the average CO₂ emissions of the vehicles we sell by more than 27 percent compared with a 1995 baseline (excluding Volvo).

We believe our commitment to addressing the climate change issue in a comprehensive and strategic way is one of the factors that has helped transform our Company's current and future products and prospects.

Our Commitment

In early 2008, Ford announced a goal to reduce CO₂ emissions1 from its U.S. and European new vehicles by 30 percent by 2020, relative to a 2006 model year baseline. We also set out a technology migration plan – embodied in our blueprint for sustainability – that details our near-, mid- and long-term plans to meet this goal. Our commitment and plan are aligned with doing our part to achieve a 450 ppm climate stabilization pathway2 (see figure below). Despite challenging economic conditions, we are making significant progress in implementing the plan and are on track to surpass the goal.

We have also announced an ongoing commitment, beginning with the 2010 model year, that all new or significantly refreshed vehicles will be best in class, or among the best in class, for fuel economy in their segment. We are committed to reducing CO₂ emissions from our operations, and we are exploring carbon emissions in our supply chain through participation in the Carbon Disclosure Project's supply chain initiative and the World Resources Institute/World Business Council on Sustainable Development's Scope 3 road testing project. These and other climate change commitments are summarized in the Climate Change: Related Commitments and Progress table.

During 2009, we expanded our analysis of GHG emission reductions to include the products we sell in Brazil and China. In this analysis, we compared our current product plans to potential reductions aligned with long-term CO₂ stabilization at 450 ppm and considered the impact of low-carbon fuels. This is a step toward developing goals for these markets.

Our climate change strategy is based on delivering products that our customers want while doing our share to stabilize GHG concentrations in the atmosphere at levels generally accepted to minimize the effects of climate change. It encompasses our products, operations and, increasingly, our customers, dealers and suppliers.

Ford cannot achieve climate stabilization alone. Reducing emissions by the amount required calls for an integrated approach – a partnership of all stakeholders, including the automotive industry, the fuel industry, government and consumers. It can only be achieved by significantly and continuously reducing GHG emissions over a period of decades in all sectors of the economy. In the transportation sector, this means increases in vehicle fuel economy globally, as well as the development of lower-carbon fuels along with price signals to align consumers with climate stabilization goals.

We are committed to advocating effective and appropriate climate change policy in the United States and around the world. We are an active member of the U.S. Climate Action Partnership (USCAP), a coalition of diverse stakeholders that released its Blueprint for Legislative Action in January 2009, setting out consensus recommendations for U.S. climate protection legislation. The USCAP blueprint includes an aggressive emission-reduction schedule, a proposed scope of coverage for a cap-and-trade program, and recommendations for how to include as much of the U.S. economy under the cap as administratively and politically feasible. It is a balanced and integrated approach to key linked issues that must be addressed in any national climate legislation; however, we recognize that the blueprint recommendations are not the only possible path forward.

Our CO₂ product goal is aligned with the USCAP recommendations and with the broad goal of climate stabilization. It also aligns our product plans to meet or exceed new fuel economy requirements in the United States and Europe. We recognize that future developments in technologies, markets, policy actions and even the natural manifestations of climate change are all uncertain. Accordingly, we will continue to monitor and adjust our goal based on changing conditions.

In This Section

In this section of our sustainability report we provide an overview of GHG emissions, including data on the contribution of light-duty vehicles, life-cycle CO₂ emissions from a typical vehicle, Ford's own climate "footprint" and stabilization pathways. We also discuss the risks and opportunities the climate change issue poses for Ford, our climate change strategy – including our blueprint for sustainability – and how we are addressing climate change public policy issues.