Earlier quoted context omitted.
There is no tradeoff. Reducing waste (CO2, methane, heat, whatever) increases profits. Not for the entrenched interests, obviously. Happily, everyone else who's been paying their externalized costs (taxpayers, consumers) benefits.
There is only so much you can reduce waste though. The internal combustion engine is limited by thermodynamics to about 50% efficiency, we are already reaching >40% in production engines. There just isn't much more waste we can get rid of. (electric cars bring up a different sets of limits, though probably higher)
Optimize the whole system. Localized optimization leads to decreased overall efficiency.