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)

Fewer trips, fewer miles/km, lighter vehicals, vehical sharing, etc.

Optimize the whole system. Localized optimization leads to decreased overall efficiency.

"Reducing waste (CO2, methane, heat, whatever) increases profits."

That's a broad generalization and far simpler model than what the poster is referring to.

Yes, riding a motorcycle instead of an SUV decreases all emissions. This is the simple base case.

However driving a diesel SUV decreases CO2 but increases NOx wrt to a gasoline one. This is the higher-order effect.