Commentary by Marita Noon - While
Pope Francis was shuttled around during his historic visit to the U.S. in a
Fiat, he shared the news cycle with Volkswagen.
The
pope made headlines with his calls for action on climate change. USA Today
touted: “Obama, Pope
Francis praise each other on climate change.” In his September 23 speech from
the White House lawn, the Pope addressed President Obama saying: “I find it
encouraging that you are introducing an initiative for reducing air pollution.”
Addressing that comment, Business Insider added:
“He praised President Barack Obama for his proposals, which aim for the US to
cut emissions by up to 28% over the next decade.”
The
core of the entire climate change agenda is the reduction of carbon dioxide
emissions which proponents like to call “air pollution.” It comes from sources
we can’t control: volcanoes; sources we can kind-of control: forest fires
(better forest management would result in fewer fires) and human beings
exhaling (reduce the population, reduce CO2 emissions); and sources
we can control: the use of fossil fuels (we can virtually outlaw them as
several countries, including the U.S., are trying to do).
The
drive to cut CO2 emissions is at the root of Volkswagen’s
unprecedented scandal that broke last week, resulting in the CEO’s
abrupt ouster on September 23—the day that Pope Francis’ U.S. visit went into
full swing.
With
nonstop coverage of the papal activities—including his Fiat
Popemobile—the
Volkswagen story was likely lost on most Americans. But it is not going away.
On
September 18, the U.S. Environmental Protection
Agency disclosed the scandal: Europe’s biggest auto maker, with 600,000
employees world-wide and 300,000 in Germany, utilized software on some VW
and Audi diesel-powered cars to
manipulate the results of routine emissions tests—allowing them pass strict
emissions standards in Europe and the U.S. The “defeat devices” have reportedly
been fitted to more than 11 million vehicles since 2008 and may cost Volkswagen
up to $18
billion in fines in the U.S. alone. Owners of the impacted vehicles will need to
have a heretofore unavailable “fix” installed and may have to provide a “proof
of correction certificate” in order to renew their registration and will suffer
“loss due to the diminished value of the cars.” As a result of the scandal,
Volkswagen’s stock price and reputation have both fallen precipitously, and
class-action lawsuits
are already taking shape. Fund managers have been banned from buying VW’s
stocks and bonds. Tens of thousands of new cars may remain unsold. USNews
stated:
“Whoever is responsible could face criminal charges in Germany.”
The question no one seems to be asking is: what would drive
Europe’s biggest auto maker to make such a costly decision, to take a risk,
from which it may be impossible to recover, and tarnish the “made-in-Germany
brand”?
While the question isn’t asked, Reuters coverage
of the story offers the answer: “Diesel engines use less fuel and emit less
carbon—blamed for global warming—than standard gasoline engines. But they emit
higher levels of toxic gases known as nitrogen oxides.”
In short, the answer is the drive to lower CO2 emissions and the
policies that encourage reduction.
Beginning in the mid-1990s, mindful of
their commitments to cut carbon emissions, Europe’s governments embarked on a
prolonged drive to convert their car fleets from gasoline to diesel. With generous
use of tax preferences, they succeeded. In the European Union as a whole,
diesel vehicles now account for more than half of the market. In France, the
first country to cross that threshold, diesel now accounts for roughly 80
percent of motor-fuel consumption.
What was the reasoning? Diesel contains
more carbon than gasoline, but diesel engines burn less fuel: Net, switching to
diesel ought to give you lower emissions of greenhouse gases. However, there’s
a penalty in higher emissions of other pollutants, including particulates and
nitrogen oxides, or NOx. Curbing those emissions requires expensive
modifications to cars’ exhaust systems. To facilitate the switch, Europe made
its emission standards for these other pollutants less stringent for diesel engines
than for gasoline engines. The priority, after all, was to cut greenhouse
gases.
If
anyone could solve the dilemma, one would expect it to be the Germans, who
excel in engineering feats. It is Germany that is touted as the world leader in
all things green. The reality of achieving the goals, however, is far more
difficult than passing the legislation calling for the energy transformation.
Addressing
German Chancellor Angela Merkel’s push for de-carbonization, BloombergBusiness
Points out: “Merkel has built a reputation as a climate crusader during a
decade as Chancellor.” She “has straddled between pushing to reduce global
warming while protecting her country’s auto industry.”
Merkel
is, apparently, bumping up against reality. After shutting down its nuclear
power plants, Germany has had to rely more on coal. BloombergBusiness
continues: “She successfully helped block tighter EU carbon emissions standards
two years ago.” Those tighter emissions standards would have hurt Germany’s
auto industry, which accounts for 1 in 7 jobs in the country and 20 percent of
its exports. At last week’s Frankfurt
Auto Show
Merkel said: “We have to ensure politically that what’s doable can indeed be
translated into law, but what’s not doable mustn’t become European law.”
Evidence
suggests the issue “could be industry-wide.” CNBC reports: “several major
companies having exposure to the same diesel technology.” BMW’s stock price
plunged, according to BloombergBusiness:
“after a report that a diesel version of the X3 sport utility vehicle emitted
more than 11 times the European limit for air pollution in a road test.” The Financial
Times quotes Stuart Pearson, an analyst at Exane BNP Paribas, as saying: VW was
“unlikely to have been the only company to game the system globally.” And an
October 2014 study, cited in BloombergBusiness, claims that “road tests
of 15 new diesel cars were an average of seven times higher than European
limits.”
The
VW emissions scandal is more than just a “‘bad episode’ for the car industry,”
as Germany’s vice-chancellor, Sigmar Gabriel, called it. It provides
a lesson in the collision of economic and environmental policies that strive to
reach goals, which are presently technologically unachievable—a lesson that
regulators and policy makers have yet to learn.
The
Los Angeles Times (LAT) reports:
“Regulators have ordered Volkswagen to come up with a fix that allows vehicles
to meet environmental regulations.” If it were that easy, even economically
possible, the much-vaunted German engineering could have solved the problem
instead of developing technology that found a way around the rules. LAT concludes:
“automotive experts believe any repair will diminish the driving dynamics of
the vehicles and slash fuel economy—the two major characteristics that
attracted buyers.”
The
fact that, while waving the flag of environmental virtue advocated by Pope
Francis, those, with the world’s best engineering at their fingertips, had to
use the expertise to develop a work-around should serve as a lesson to
policymakers who pass legislation and regulation on ideology rather than
reality.
The
author of Energy
Freedom,
Marita Noon serves as the executive director for Energy Makes America Great
Inc.
and the companion educational organization, the Citizens’ Alliance for
Responsible Energy (CARE). She hosts a weekly radio program: America’s
Voice for Energy—which expands on the content of her weekly column.
Follow her @EnergyRabbit.
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