Dieselgate and Dollars – Reference Mark

Volkswagen deserves to be punished for its vile deception of both the public trust and environmental regulators by deliberately manipulating its vehicles’ diesel emissions. The planet’s levels of nitrous oxides in the atmosphere are incrementally higher and certainly more harmful as a result of VW’s misdeeds. When 11 million VW diesel vehicles pollute, it will have an impact on the planet.

But are the sanctions sought by the tort-industrial complex commensurate with the damage VW has caused? For perspective, Dieselgate is a blip compared to the environmental horrors of Chernobyl, Bhopal, and Love Canal. It’s not as if Volkswagen’s illegal emissions hack directly killed anyone.

Let’s be clear: No one is advocating letting Volkswagen off the hook. This was intentional, willful malfeasance. But VW is staring at more than $15 billion (and rapidly climbing) in legal damages from its transgression—already 10 times what GM faces for its fatally flawed ignition switches. Which raises the question of whether this is an indictment or an excuse for a legally sanctioned cash grab.

The media has reported VW diesels polluted at a rate up to 40 times the regulatory maximum. But those levels were under exceedingly rare conditions, with the typical emissions violation at 12 to 15 times the limit.

Although that overage still is negligent, there is historical perspective to consider.

When VW’s deception started in 2008, all automakers had to reach new Tier 2 Bin 5 emissions limits—an exceptionally stringent mandate compared to previous standards.

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“It has to be understood that even though [VW] exceeded limits by up to 40 times, it still is low levels of emissions,” Arvind Thiruvengadam, assistant professor of West Virginia University’s Center for Alternative Fuels, Engines & Emissions, said. “Because the standard itself is so low, even 40 times the limit is not a huge number. The actual magnitude is very low.”

Read our exclusive interview with Thiruvengadam HERE.

Thiruvengadam is one of the principals who discovered the VW software “cheat mode” that allowed its diesel engines to pass emissions tests in the lab then return to polluting noxiously on the road. If you want to talk engine power densities, catalytic efficiencies, or combustion processes, he’s your expert. And he thinks Dieselgate has been blown out of proportion. In fact, he believes those same diesel Volkswagens would likely have been in compliance with the previous-generation emissions standards. But achieving Tier 2 Bin 5 “was almost impossible and economically unviable.”

In support of that thought, a recent report by the European green advocacy group Transport & Environment showed that nearly 90 percent of diesel vehicles failed to meet emission limits when driven on the road. Also, a survey of 400-plus vehicles tested by Emissions Analytics found similarly dismal results. Other European automakers are now also under investigation for their diesels being out of compliance.

So it appears most diesels are dirty. But Volkswagen played dirty, too, and got caught. It was no accident, and the penalty should be commensurate with the crime. Given that diesel pollution appears rampant, it seems that VW’s crime was not necessarily the emissions violation but the VW corporate culture that encouraged and green-lighted a process to illegally circumvent regulations.

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One other thing: With the BP Deepwater Horizon disaster, which released an estimated 4.9 million barrels of oil into the Gulf of Mexico, BP’s deal with the government allowed for a big chunk of the $20 billion judgment to be tax-deductible—meaning American taxpayers will foot much of the bill for the spill. If VW gets the same legal treat- ment, John and Jane Public just subsidized a very expensive collection of 550,000 U.S.-market diesel Volkswagens.

Even if the deal is structured so that VW pays for everything out of its corporate coffers, is that still really the most desired payment of societal debt? That’s money VW could have allocated toward developing new green powertrains. Instead, that huge debt may curtail R & D spending. Not necessarily a good trade-off.

Thus arises the question about what it is we’re actually punishing and how we should best go about it.

More by Mark Rechtin:

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