Volkswagen has taken its lumps over the past year. Last September, the International Council on Clean Transportation, after independent emissions tests, was the first to claim Volkswagen diesel emissions — especially NOx — were many times greater than advertised. Instead of being the prince of clean diesel technology, it became the dark knight of dirty diesel detritus. Last week, a former VW employee pleaded guilty to criminal charges in the US for his role in the scandal.
Volkswagen’s stock has tumbled, costing investors billions. Its sales have also plummeted, leading to angry words with its dealers. Everywhere from Europe to North America to the Korean peninsular, the company has been pilloried by government regulators, environmental groups, and the press as a villainous enterprise, conspiring in back rooms and alleyways to sicken our children and endanger the very survival of mankind.
Now a new study by Toulouse School of Economics Professor Mathias Reynaert and UC Berkeley Professor James Sallee concludes that Volkswagen was not alone. According to their findings, virtually every manufacturer of diesel powered cars sold in Europe cheated on their emissions testing as well. A French study released earlier this year supports their conclusion.
It found that diesel cars from Renault and Nissan had nitrogen oxide emissions eight times higher than allowed by current Euro 6 standards. Reynaert and Sallee find a strong correlation between the size of the discrepancy and the imposition of tougher new emissions standards.
The higher the bar was set, the greater the difference between the emissions the companies reported and real world driving results. Regulators plead that there is not enough money to buy the real world testing equipment needed to enforce the regulations, but that is just stuff and nonsense.
What the new study reveals is a governmental structure that postures about its commitment to good environmental policies while turning its head so it won’t see the devious ways their regulations are evaded. After all, the auto industry provides employment for a lot of people. It’s not just factory workers, its salesmen and dealers, the drivers who deliver the cars to dealers, the finance companies that provide loans and leases to car buyers, and the myriad parts suppliers both large and small that make building modern automobiles possible. For every job in manufacturing, another 6 are created to support the process.
And yes, it also generates lots of tax revenue for local and national governments, money that goes to pay the salary of all those oh-so-sanctimonious regulators. The truth is, everyone has something to gain from evading regulations.
Professor Reyneart says The New European Driving Cycle testing protocol leaves plenty of room for car makers to cheat and so cheat they do. He and Professor Sallee used data from Travelcard, a Dutch fuel card service, to estimate real world fuel economy and emissions. Then they compared their figures to official ratings. The tougher EU emissions rules kicked in around 2007. That’s when the difference between reported emissions levels and real world results began to grow rapidly.
What conclusions should we draw from this latest information? Last week, Renault announced that actually meeting diesel emissions regulations — instead of pretending to — will simply cost too much money to be profitable. It expects diesels to simply disappear from European roads shortly.
That’s a stunning statement. At this very moment, I am having breakfast on the shores of Lake Orta in northern Italy. Every vehicle in the area is a diesel — passenger cars, SUVs, police cars, ambulances, taxis, garbage trucks. All are powered by diesel engines. Europe has bought into the myth of diesel superiority in a big way. Eliminating diesels will require a massive rearrangement of conventional wisdom.
And why is diesel king? Because for the past 40 years, every European country has arranged their fuel taxes to favor diesel as a motor fuel. The objective was to reap the benefit of diesel’s higher fuel economy compared to gasoline. Just imagine if similar economic policies favored zero emissions vehicles? We all vote with our wallets. Traditional business says government regulations are a drag on innovation and profitability. Fine. Let’s accept that argument as true, at least for the moment.
If so, why not eliminate all those burdensome regulations and just use pricing signals to encourage zero emissions life style choices? Make fossil fuels more expensive than the alternative and they will cease to exist within a generation. The biggest problem will be finding new careers for all those unemployed regulators.
The bottom line is that regulators have been complicit in promoting the diesel cheating mess. It is inconceivable that no one in government knew what the manufacturers were up to. They didn’t know because they chose not to know. Their protestations of surprise and indignation are just window dressing meant to hide their own incompetence and malfeasance. While criminal investigators are busy examining what manufacturers did, they should also take a hard look at what regulators failed to do.
The rampant diesel cheating did not take place in a vacuum. It takes two to tango and for the past decade European regulators have been only too happy to dance along with their partners in the automotive industry.
Source: Green Car Reports