Are Exhaust Emissions Regulations Too Restrictive?

Most of the American public has heard about the Dieselgate scandal. To be totally honest, it is very difficult to avoid the news anywhere you look. Recent news showed how the auto manufacturer Mitsubishi admitted that it has ‘cheated’ fuel economy tests for the last 25 years. While hardly an epidemic, we now have two international car companies that have been found with their hands in the proverbial cookie jar. It begs the question – are emissions regulations too restrictive?

mitsubishi-wants-new_800x0w

Mitsubishi knowingly committed these acts over a twenty-five year span and about 625,000 vehicles are under this scope of improper testing. The numbers could sway wildly in the days and weeks to come, but Wall St. had no problems reacting to the news. The company’s value took a major hit, losing about $3.9 billion to date since the news first broke. The United States Environmental Protection Agency (EPA) has also ordered the company to retest its vehicles.

Mitsubishi vehicles underwent a variety of tests that toyed with standards set in Japan starting in 1991. Adding the spectre of egregiousness, Mitsubishi reports having discovered the fault in 2001, but they refused to update testing methodologies. The company thus far reports that four models were part of the manipulated data. They include:
the eK Wagon and eK Space, which are manufactured and sold by Mitsubishi, and the Dayz and Dayz Roox which is anufactured by Mitsubishi and supplied to Nissan Motor Company.

The question remains. Are these companies cheating to gain profitability? How could it have gone on for so long? Are worldwide regulatory agencies creating a tough situation where companies are choosing this self-destructive path?

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Dieselgate Expands to Gasoline VWs

Dieselgate Expands to Gasoline VWs

News is breaking that VW cheated on gasoline car emissions in addition to the already-revealed diesel cheating (“Dieselgate”). Bloomberg reports “Gasgate” affects the VW group’s 1.4-liter gasoline engine. The 800,000 European market cars emit more carbon dioxide and achieve fewer miles per gallon (MPG) than the automaker stated when the cars were certified.


Oh man. Oh man oh man oh man. VW wasn’t doing one bad, bad thing, they were doing several bad things.


What does management know? It seems like they were kept in the dark about the emissions-cheating software. Or at least that what they want us to think.

Meanwhile, VW stock is getting (re) hammered, now 39% below its price before Dieselgate.

The latest issues affect Volkswagen’s Polo, Golf and Passat models, Audi’s subcompact A1 and A3 hatchback, the Skoda Octavia, and the Seat Ibiza and Leon, with most in Europe. While smaller diesel motors account for the vast majority of affected cars, a specific type of 1.4-liter gasoline engine is also involved, the company said. Germany’s Transport Minister Alexander Dobrindt said that 98,000 gasoline cars are affected.

MVWS Commentary

Whatever the case, our question at MVWS is this:

  1. All this stuff is easily verified. CO2, MPG, etc… science gave us the tools to measure these things roughly a hundred years ago. Why were our governments, so stuffed with regulatory money, not testing these cars? Why were they taking VW’s word for it?

That’s it. Just one question. We don’t get it. A couple smart ten-year-olds could test fuel efficiency, given a legal driver. The carbon dioxide and diesel cheats are also easily tested, relatively speaking. Although those would require high school age kids.

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Diesel and the EU

diesel-cars-break-nox-limits.jpg

To us here at MVWS it’s strange how the EU, so full of rules, regulations and limits on pollutants, could have let the diesel dragon run so far from the cave.

The European Union (EU) is considered by some to have the most extensive environmental laws of any international organisation.[1] Its environmental policy is significantly intertwined with other international and national environmental policies. The environmental legislation of the European Union also has significant effects on those of its member states. The European Union’s environmental legislation addresses issues such as acid rain, the thinning of the ozone layer, air quality, noise pollution, waste and water pollution. The Institute for European Environmental Policy estimates the body of EU environmental law amounts to well over 500 Directives, Regulations and Decisions.[166]

https://en.wikipedia.org/wiki/Environmental_policy_of_the_European_Union

Europe’s long love of diesel, which enjoys tax benefits in many countries, was driven by an ambition to fight climate change: diesels burn 20 percent less fuel. Now, the technology is used in more than half of all cars sold in the European Union.

But the more fuel-efficient the engines are, the more toxic nitrogen oxide (NOx) they create. In London alone, NOx pollution causes the equivalent of up to 5,900 deaths a year, a recent King’s College study concluded. Most European cities habitually exceed the allowed NOx levels, often by a large margin. The transport sector, and diesel in particular, are mainly to blame.

http://blogs.reuters.com/breakingviews/2015/10/26/how-diesel-mad-eu-laid-seeds-of-vw-scandal/

It turns out the regulations were there, they just weren’t enforced regularly, or strictly, or both:

On average, new diesels sold in Europe in real use emit seven times more NOx than the official limits allow, a 2014 study of the International Council on Clean Transportation (ICCT), a non-government organisation, showed.

Whoa. Seven times more NOx than allowed!? In such a highly-regulated, rich continent so able to apply this policy? But how?

VW equipped cars in the United States with “defeat devices” that damped down emissions during lab testing. In Europe, carmakers have had no need for such tricks, thanks to the leniency of the testing regime.

http://blogs.reuters.com/breakingviews/2015/10/26/how-diesel-mad-eu-laid-seeds-of-vw-scandal/

Ah, that’s how. So VW cheated in the US, but didn’t need to cheat in the EU because nobody was enforcing the policy.

Perhaps to blame is the disparate nature of the Union:

The European Commission not only has an exclusive right to propose new environmental policy, but it also has a responsibility to ensure the implementation of environmental rules. Therefore, since its creation in the 1950s the European Commission has been at the heart of the European Union. However, it did not set up a unit dedicated to environmental issues until the 1970s and a full Directorate General for the environment until 1981.[9] Initially DG Environment was perceived as a relatively weak DG but it has gradually become more assertive through the development of technical and political expertise. However, the Commission still has to depend on member states to implement its policies.

[…]

Policy making in the EU can be extremely complex. It has been suggested that the policy making process is too densely populated with veto players (i.e. actors whose agreement is necessary for a policy to be adopted) for any single actor or group of actors (including the EU’s member states) to consistently control the direction of policy making.[15] The result in environmental policy making has been widely depicted as being especially unpredictable, unstable and at times even chaotic. However, the European Commission, as a key player in the policy making process, has under pressure to develop ‘standard operating procedures’ for processing policy.[16] This has led to a number of changes in policy making processes in recent years, including: adopting minimum standards of consultation; the impact assessment of all major policy proposals; and the earlier publication of its work programmes.[17]

https://en.wikipedia.org/wiki/Environmental_policy_of_the_European_Union

Turns out our (US) glacial pace on mainstreaming diesel technology into the private automobile industry wasn’t such a bad thing, despite the chorus of booing that would arise over here when this or that marque announced no diesel version of any particular model was bound for US shores. Just look on any car enthusiast site, like Car & Driver, for instance.

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