Four major automakers — Ford, BMW, Honda and Volkswagen — entered into a voluntary compromise agreement with California to limit emissions across the country, recognizing that it is time to accelerate climate action beyond the goals of our current federal government. But the Feds launched a legal action to investigate these companies for antitrust violations, throwing a dirty trick in the way of cleaning up the industry.
And then, in a stunning betrayal of investors and in ignorance of the clear need to transition to a low carbon economy, General Motors, Toyota and Fiat Chrysler decided to side with the president in his attempt to revoke California's authority and help the Trump administration drag the auto industry backward while the rest of the world speeds ahead on climate.
As investment advisor to, and custodian of, New York City's five pension funds, charged with protecting $200 billion in pension fund assets, my job is understanding and anticipating risk. Let me be clear: Climate change is a much more impactful risk to U.S. companies than Trump's empty threats.
Trump's rollback of national and state clean car standards is risking the very future of the American auto industry, not to mention the future of the planet, and automakers that support weak standards are in turn exposing themselves to extraordinary risk.
The existing vehicle emissions standards the Trump administration is dismantling jump-started investment in clean car technologies, resurrected a U.S. auto industry that was on the brink of collapse and boosted job growth in some of the regions hit hardest by the 2008 recession. They challenged the industry and led to more sustainable growth.
The Trump administration's rollback would reverse that progress, undermining auto industry clean car investments and triggering the loss of between 89,000 and 202,000 of tomorrow's clean vehicle technology jobs. The rollback threatens the U.S. auto industry's global competitiveness as demand for clean and zero-emission vehicles grows rapidly around the world. To stay at the front of the pack, the U.S. auto industry needs to invest in clean car technologies.
And these rollbacks would hit the wallets of working Americans — costing drivers about $460 billion — $3,300 per new vehicle — at the pump in the coming years, siphoning that money from the pockets of Americans and transferring it into the oil industry's coffers instead.
Finally, the rollback would expose automakers, the auto industry and the entire U.S. economy to further climate risk and economic uncertainty. As the IPCC Special Report on Climate Change makes clear, the transformation of transportation, the highest greenhouse-gas-emitting sector in the country, is absolutely crucial to keeping the planet from warming beyond 1.5 degrees Celsius and staving off the worst impacts of climate change. Trump's rollback and repeal of California's exemption are likely to go through multiple rounds of legal challenges, robbing companies of the economic and regulatory stability that is the linchpin of sound strategic business and investment decision-making.
That's why I and a coalition of 25 major investors with $1.1 trillion in collective assets called on General Motors to sign on to the compromise agreement with California, which would provide the regulatory certainty they need. Doing so would have signaled to the marketplace and to investors that automakers are prepared to protect their investments, profits and their workforce beyond the limited term of the Trump administration and prepare for a carbon-constrained future.
Instead, their failure to do so reveals a shortsighted approach to business that will prove costly to automakers, the auto industry, the broader U.S. economy and the planet in the long run.
For the good of investors and for the good of the planet, they must change.
— By Scott Stringer, New York City Comptroller, who is the investment advisor to — and custodian and a trustee of — the $200 billion New York City Pension Funds