In September, Volkswagen (VW) admitted that their “clean diesel” vehicles released up to 40 times the legal limit of pollution. This fact was covered up by the installation of a “defeat device” that reduced pollution to the legal limit during laboratory tests mandated by the Environmental Protection Agency (EPA). Much of the coverage of the case has focused on the financial impact of the scandal: the company has already set aside $7.3 billion to cover its costs, although experts estimate that VW will end up paying much more. The EPA alone could fine VW up to $37,500 per vehicle equipped with the defeat device; given the estimated 500,000 such vehicles in the United States, this could lead to an $18 billion charge. VW could also be forced to buy back the cars from defrauded customers; the Associated Press estimates that this cost could add up to $6.9 billion. The total cost of the scandal has been estimated at between $22 billion and $33 billion, although the long-term cost to the VW’s brand is less quantifiable. To put things in perspective, VW made a total profit of $12 billion in 2014.
So far, this scandal has been framed in either these monetary or more abstract moral terms, namely that VW defrauded investors and consumers, deceived government regulators, and betrayed the trust of the American people. For a scandal centered on environmental regulations, surprisingly little attention has been paid to the environmental costs of VW’s deception. There has been talk of reforming the EPA’s regulatory process so that this kind of deception could be detected earlier (the EPA may start requiring automakers to test car emissions both on the road and in labs, while they previously only required lab tests), but little emphasis has been placed on the actual reasons for the initial regulations and the consequential high fines. To read the news coverage of the scandal, it would seem that the fines are being levied for emotional or moral reasons, but the environmental and human costs of pollution have been marginalized, if not ignored. This tendency to focus on the financial or immediate moral cost of environmental policies reflects a larger difficulty in environmental regulations, namely that it is hard to consider abstract environmental concerns such as global warming in the face of immediate, human costs.
Diesel has previously been framed as a potentially effective alternative to combat global warming, as diesel fuel contains more energy than typical gasoline. With the same amount of fuel, a car running on diesel can travel 30 percent further than a car running on gasoline, while emitting much less carbon dioxide. However, these benefits come at a cost: diesel cars release high levels of nitrogen oxides (NOx), which are leading factors in the formation of smog and particulate matter.
Weighing these two considerations is a political, rather than scientific, issue. High carbon dioxide levels are hard to see and cause more detrimental long-term effects, while NOx emissions have a very visible effect on the environment through the increase in smog, so it can be easier to regulate them. The United States has placed greater emphasis on regulating diesel to prevent smog and its deleterious health effects, and the stringent NOx emissions standards in the US mean that very few cars in the US run on diesel. In Europe, in contrast, regulators have supported an increase in diesel cars to combat global warming, accepting higher levels on NOx as a result. The takeaway from these contrary attitudes is that these issues are hardly objective: some critics go so far as to argue that the increase in smog is an acceptable cost when trying to increase fuel economy and fight global warming. Clearly, European regulators weighed this balance and came down on the side of diesel. This perspective indirectly absolves VW of culpability for a major environmental catastrophe, notwithstanding the fact that their diesel emissions were alarmingly high and didn’t meet even Europe’s more lenient regulations.
Nevertheless, this perspective hasn’t been considered as part of a larger picture. VW will face billions of dollars in fines, and Europe may be pushed to instate harsher regulations against NOx emissions. Yet, if there is an international increase in NOx standards, the auto industry will turn away from diesel cars. This would mean an increase in the number of cars that run on gasoline and, as a result, an increase in the level of carbon dioxide in the atmosphere. The result of this increase causes long-term environmental problems (as opposed to the immediate effects of NOx emissions), and is therefore not considered in news coverage of the scandal. The business-focused coverage of the VW scandal is emblematic of the difficulty in confronting long-term environmental issues, and demonstrates the polarizing political ramifications implicit in seemingly objective environmental regulations.
The disparities between Europe and the US come down to the psychology of regulation and legislation: The US has found it difficult to impose regulations that limit carbon dioxide (CO2) emissions because climate change is not perceived as an immediate threat — it’s hard to conceptualize a far off and distant future where the problem might come to fruition. By contrast, many of the United States regulations concerning NOx emissions were successfully passed during a time when cities were struggling with an increase in smog, and the health concerns that came along with it. NOx emissions are easier to regulate because, unlike global warming, the effects are clearly seen and the payoff of regulation is almost immediate.
This is not to say that the VW’s actions were not harmful. The AP has estimated that the decrease in air quality caused by VW’s high NOx levels led to between 19 and 64 deaths in the United States, and possibly hundreds of deaths in Europe. Dan Greenbaum, president of the Health Effects Institute in Boston, posits, “Even the small increase in NOx from VW diesel emissions is likely to have worsened pollution along the roadways where they have traveled, and affected the lives of hundreds of thousands of people…To say millions of people of people are breathing poor air as the result of that is not off the mark.” It’s nonetheless important to consider whether VW’s high NOx emissions were actually harmful to the tune of nearly $30 billion given Europe’s lower standards for diesel cars.
VW committed serious and deliberate fraud and deserves to be fined for their actions. But this scandal shouldn’t be used as an opportunity to focus solely on VW’s immediate financial considerations or to condemn diesel entirely. Rather, we should use this scandal as an opportunity to evaluate our environmental regulations on the whole. Policymakers must recognize that many non-diesel cars release high levels of CO2, but because this pollution is unseen, unlike NOx smog, the public remains apathetic.
