First Volkswagen and Fiat, now Renault. Will it ever end?
By Carson Leigh Brown
From left: Volkswagen, Fiat, and Renault logos. (Photos: Sean Gallup/Getty Images; Harold Cunningham/Getty Images)
Another year, more emissions cheating scandals.
French prosecutors announced Friday they were investigating the automobile-maker Renault for diesel emissions exceeding European regulations. Renault confirmed the investigation but denies the allegations.
News of the inquiry capped off a week full of emissions scandals in the automotive world. On Thursday, the Environmental Protection Agency and the California Air Resources Board accused Fiat Chrysler of using defeat devices to cheat on mandatory emissions tests. Fiat Chrysler is denying the charges, claiming the dispute actually concerns disclosures around engine protection software.
The Fiat fiasco follows news last week that Volkswagen unexpectedly pleaded guilty to three criminal felony counts of emissions cheating.
Setting aside the investigation of Renault—which operates in a separate legal world—could the Volkswagen news influence how Fiat goes about handling these accusations in the United States?
The scope of Fiat Chrysler’s diesel problem is much smaller than Volkswagen’s: About 104,000 Fiats feature these defeat devices—software that lowers emissions while the car is in test mode—compared toVW’s nearly 600,000. But like in VW’s case, uncertainty around future financial ramifications is causing Fiat’s (and Renault’s) share prices to plummet.
If history is an indicator, Fiat won’t admit guiltbecause, generally, when automakers come under investigation for circumnavigating regulation laws, the companies pay large fines and avoid admitting any actual wrongdoing.
“As we see so often, the cover-up gets the perpetrator in more trouble than the lie, and I think the officials at VW realized that” says Helene Gardner, a lecturer in environmental studies at the University of California–Santa Barbara. “If VW had been successful in keeping its employees silent, I suspect the fraud would be ongoing.” The guilty plea came after the Federal Bureau of Investigation arrested Volkswagen executive Oliver Schmidt.
“I fear that the lesson learned by companies like VW will be to lie better next time.”
Leah Stokes, a professor of environmental politics at UCSB, notes that the Environmental Protection Agency is being more aggressive than other countries’ regulators in pursuing these violations.Germany is currently investigating Volkswagen’s emissions cheating, but they’re moving at a slower pace.“This runs counter to a common belief that E.U. regulators are [consistently] tougher on environmental issues,” she says.”
In 2014, researchers at the University of West Virginia discovered that Volkswagen’s nitrogen oxide emissions were 10 to 40 times higher than EPA regulations allow, which is 70 milligrams per mile for diesel vehicles. Should a government agency decide to pursue investigation or further charges, it’ll be difficult for VW to defend itself as the company has already confessed guilt.
Researchers fear the Volkswagen and Fiat Chrysler transgressions paid unique harm to the environment.“By itself, [nitrogen dioxide] is an oxidant gas that causes acute effects such as shortness of breath and wheezing and chronic effects such as the development of pulmonary fibrosis. But NO2 is also a precursor in the atmospheric production of two other pollutants,” Gardner says.Nitrogen oxide causes respiratory problems through the ground-level ozone it precedes, and diesel car emissions are already responsible for a significant portion of nitrogen oxide emissions. In this instance, tracing a particular pollutant in the body back to a specific source is impossible, so affected individuals cannot be compensated.
“Some individual consumers selected the specific Volkswagen cars because they were thought to have high efficiency and they were specifically interested in those features, whether for cost or environmental reasons,” Stokes says. “Given the extent of the cheating, a large number of customers polluted more than they knew or intended to.” The effected VW cars caused an estimated 36.7 million kilograms of excess nitrogen oxide emissions over about eight years, which, in 2015, was equivalent to about 1 percent of the total light duty vehicle emissions, according to a report published in Environmental Research Letters. That breaks down to about 59 early deaths, 31 cases of non-fatal chronic bronchitis, and 120,000 minor restricted activity days liked missed work, among other impacts.
Besides the $4.3 billion in fines Volkswagen will pay — $2.8 billion in criminal penalties and $1.5 billion to resolve civil claims —it is also required to have an independent monitor at the company for three years to supervise adherence to EPA regulations.
But after all this, Volkswagen is still doing fine. Shares are heading back up since the deal was announced as investors find relief in an end to the uncertainty and the knowledge that the financial blow won’t be lethal.
VW’s admission marked a major departure from the cases of Toyota or General Motors, which both chose to pay fees to avoid admitting misconduct. In 2014, Toyota agreed to pay $1.2 billion after its acceleration pedals kept getting stuck partially depressed — which it initially attributed to floor mats during recall. And, in 2015, GM paid $900 million after ignition switches in several different models would suddenly turn off, causing the engines to stall and preventing crash safety technology from operating. Like VW, Toyota and GM bothtook on independent monitors.
Gardner suggests much steeper penalties to discourage malfeasance as science’s ability to measure impact becomes more accurate. “My concerns about this type of news have been that corporations will continue to value making money over complying with regulations that are designed to protect human and environmental health,” she says. She applauds crime-appropriate punishments, like when GM purchased low-polluting buses for school districts in the 1990s after it got caught cheating on Cadillac emissions reports.
The guilty parties at VW, and the accused parties at Fiat Chrysler and Renault, will have to contend with separate investigations by European authorities, and a world where poor air quality affects all of us. “I fear that the lesson learned by companies like VW will be to lie better next time, but I am perhaps being overly cynical,” Gardner says. “Whatever VW ends up paying cannot rectify whatever the ill effects are.”
Going by Fiat Chrysler Chief Executive Sergio Marchionne’s furious denial, it seems there will be no Volkswagen-esque admission in the near future.