What are we to make of the news that the German car manufacturer Volkswagen has been cheating on emissions tests for diesel cars in the USA? The first cries of ‘disgraceful’ from the media were followed by announcement that 11 million cars had the ‘cheat software’. There were apologies, resignations and drastic impacts on share prices. Subsequent stories expanded the focus of concern from Volkswagen to the Porsche partner companies (Audi and Skoda), who announced that 3.3 million of their cars were fitted with the same software as Volkswagen to cheat US emissions tests.
Should this be a surprise? Not really.
First, it is not surprising to find regulators revealed as useless: dogs with neither bark nor bite – especially in bureau-Europe. It has been known since 2011 that diesel cars driven on the road discharged far more nitrogen oxide and particulate than official tests reported, and had significantly worse fuel consumption. The testing regimes have been criticized as ‘not fit for purpose’, especially the bureaucratic mess that holds in the EU. The BBC reported the UK Committee on Climate Change saying that between 2002 and 2014 the gap between official and real-world CO2 emissions for new passenger cars increased from about 10% to 35%.
Second, is it really a surprise to find manufacturers ‘gaming the system’? The European Automobile Manufacturers Association (ACEA) was quick to argue that ‘There is no evidence that this is an industry-wide issue’. Yet research by the (Allgemeiner Deutscher Automobil-Club) of new diesel cars from other manufacturers (including Renault, Nissan, Hyundai, Citroen, Fiat, Volvo) show they emit substantially higher levels of NOx when tested in realistic driving conditions. It seems that all cars are less green than customers have been led to hope.
Of course, modern automobile manufacturers want to build a high-tech highly efficient product that will win customers by its sheer quality. But they also want to do so cheaply. As well as building better engines and more efficient bodies, that means manufacturers must make sure tests give good results. Capitalism works by reducing costs. Where government regulation imposes costs, minimising them becomes a core corporate target. Improving environmental performance is therefore a priority just like minimising corporate tax. There is, however, an important difference between tax avoidance (which is legal) and tax evasion (which is not). What Volkswagen did by installing software to cheat emissions tests was the equivalent of tax evasion. But the whole industry uses tricks of the trade to optimise test results and claim unrealistic environmental performance for their cars.
Perhaps the only real surprise is that Volkswagen did not see disaster coming. It is indeed hard to understand why they did not respond when testing discrepancies first emerged (back in 2011). It is this, I suspect, that will be the centre of the case study that even now Business Schools will be writing for their MBA students. Cutting costs is all very well, but companies with prominent brands are vulnerable to public opinion. As Google, Starbucks and Apple discovered in the UK, a media and public backlash awaits those whose cleverness and ruthlessness is deemed to have gone too far. Companies with global brands based on quality risk consumer trust when caught cheating, just as they do when faced with disasters they should have avoided (think BP and Deepwater), or major product recall (think Nissan and the sticky accelerator problem).
So, what price the Green Economy? You might have thought that small, fuel-efficient diesel cars were the perfect example of a ‘win-win’ strategy, allowing us to consume our way out of environmental crisis: easy on the world’s resources and easy on the pocket. Now it is suggested that the revelations about Volkswagen might sound ‘the death knell for diesel cars’. When, back in April 2015, the British Supreme Court found that the UK had breached the EU Air Quality Directive on NOx, the Daily Telegraph reported ‘Diesel cars could be banished as Britain ordered to cut air pollution’.
Will that improve the state of environment? Yes, to some extent, in terms of air quality. Experiments with ‘car free days’ (like that in Paris on Sunday 27 September) can bring dramatic falls in air pollution and noise (almost a third less NOx on Champs Elysée for example). High levels of NOx are linked to 9,500 premature deaths in London every year, and there are also significant ecological impacts as part of wider nitrogen polluton. About half the 2.2 million tonnes of nitrogen oxides from human emissions in the UK every year come from motor vehicles (the rest from power stations, industry and domestic activities). Petrol NOx emissions are only 60% of diesel.
So, a shift away from diesel would help improve urban air quality. But does that make the petrol car ‘green’? No way. Petrol engines have lower fuel efficiency, so CO2 will rise. So too will emissions, unless we get a grip on mileage. And as the miles driven rises (as it will when the aspirant middle class developing world manages to achieve the Californication of their dreams), so too will CO2, and so too will global temperatures.
The truth is that there is no such thing as a ‘Green’ car. The only green car is one that is not used. Or even better one that is not manufactured. The only green car is a bus, or a train, or a bicycle.
There are, of course, real choices between different kinds of engine, and important challenges for the car industry in reducing emissions, raising fuel efficiency, reducing pollution and resource demands from start to end of life. One can imagine concept cars can be propose that are light, swift, efficient and recycled and recyclable.
And there are, already, electric cars. In 2015, the Green Car of the year award was won by the BMW i3. (Interestingly, one of the runners up was the Volkswagen Golf). The BMW i3 is a luxury four-seater runabout with an electric engine. It is an impressive nod towards the idea of sustainability. It is built in an energy efficient factory in Leipzig that generates its own wind power. It has a light body (carbon fibre), and is designed to be as recyclable as possible (even its lithium battery). It can do just a few more miles on one battery charge than the sum of my weekly bike-rides to work. Purchasers love its feel and futuristic styling. The basic model costs a touch over £30,000 on the road.
This is a fine vehicle, and hats off to BMW for actually manufacturing and selling it. But it is a rich driver’s toy, not the basis of a sustainable transport system. And a cities and countrysides full of BMWi3s, or some future cheap clone, will still demand vast subsidies of energy and materials, mostly extracted in the global periphery. Such a world is likely to be polluted and unequal, and will certainly be dysfunctional. The world shown in carmakers’ videos is as fantastic as that of The Matrix or The Truman Show: we are never shown what lies behind the illusion.
The car-based economy is not in any sense ‘green’. It depends on materials that need to stay in the ground, it encourages mobility that (while delightful) is unsustainable and it creates infrastructure geographies that hard wire us into more of the same (the after-use plan for motorways and bypasses is what exactly?).
The mass-produced Model T Ford defined the twentieth century’s industrial vision of the car economy: mass production for mass family transport. Henry Ford is reputed to have said of the Model T ‘you can have any colour you like as long as it’s black’.
Manufacturing has come a long way since then, and standardisation has given way to flexibility and customer choice. But in essence car manufacturing has not changed at all: you can have any colour you like, but not green.
The Volkswagen scandal literally opens an ocean of scandals, not only the fact that we’re being cheated thinking we own energy efficient cars or green cars, but also showing Volkswagen is just the tip of the ice berg. It turns out Skoda (cars) Panasonic (fridges) and Samsung (TVs) have been using cheat software as well. We must use this momentum to seriously rethink how we’re dealing with things like energy tests and corporate interests. A great first would perhaps be to start an INDEPENDENT organisation that does the tests and not to allow for armies of lobbyists that are able to pay politicians to do what car makers want.