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Volkswagen's behavior may have been bad, but did it ever make sense to mandate that passenger cars, after 2008, be restricted to 0.07 grams of nitrogen oxide output per mile?
This target of 0.07 grams is already about a 90% reduction from the NOX output of the average car on the road today, according to the EPA. It represents about 1/40th the output of the average full-size pickup (gasoline or diesel), of which more than 10 million are on the road.
No doubt health benefits have been secured for the American people as the worst-polluting of vehicles have been removed from circulation. A heavy truck in the 1980s put out 28 grams per mile. But these health benefits may also be systematically exaggerated, thanks to the entirely nonempirical presumption that small amounts of smog are proportionally as dangerous as large amounts. You would never know it, but only this tenuous assumption lies behind the media’s confident assertion that between five and 20 deaths a year can be blamed on the miscreant VWs.
Already a trope is taking hold in the press: We must double-down on testing to make sure our cars meet the ever-expanding, multiple regulatory objectives we set for them. Unasked is whether America’s expansionist clean-air bureaucracy, after its successes of the 1970s, hasn’t already gone well past the point of diminishing returns in its pursuit of cleaner air.
There is plenty of evidence for this proposition. As President Obama’s first-term regulatory czar Cass Sunstein said in his 2002 book “The Cost-Benefit State,” “As government controls get more severe, the benefits of increasing severity diminish, to the point where ‘the last 10 percent’ may do very little at all.”
Holding the same job in the
George W. Bush administration was Indiana University’s John Graham, who co-published a
paper this year entitled “Uncertainty in the Cost-Effectiveness of Federal Air Quality Regulations.”
VW’s new chief, Matthias Müller, says his company now faces an existential crisis. If so, it joins a club whose most conspicuous members are
GM GM 2.48 % and Chrysler—namely the club of auto companies simultaneously killed by regulation and propped up by government. VW is partly owned by the German state of Lower Saxony, largely controlled by Germany’s dominant labor union, and virtually an appendage of Germany’s dominant political parties. You can be certain that, no matter how high the bills for the emissions-cheating scandal go (and $100 billion has been mentioned), VW will not be allowed to fail.
Ultimately this problem of governments simultaneously killing and propping up their auto industries lies behind a passionate protest issued earlier this year by
Fiat-Chrysler FCAU 3.37 % ’s CEO
Sergio Marchionne. Mr. Marchionne called on the industry urgently to consolidate in order to lessen the burden of duplicative investments that companies are making to comply with government rules. Example: the looming Obama fuel-mileage mandate requiring a U.S. fleet average of 54.5 mpg by 2025.
This mandate is theoretically aimed at global warming, though its net effect, even if honestly implemented, would be far less than 1% of global carbon-dioxide output. But as we know from careful congressional investigation, the 54.5 target was never the product of science and engineering. It was the product of the White House PR machine’s desire for an impressive-sounding “headline number.”
There is only so much of this that a competitive, capital-intensive industry can take, and VW’s cheating scandal is partly a manifestation.
Hence a modest proposal for settling the case. Volkswagen says it will fix its U.S. cars to meet U.S. nitrogen-oxide rules, but then it will certainly have angry customers on its hands because its cars will no longer meet customer expectations for fuel-mileage and horsepower. If VW could reconcile these bogeys, there would be no scandal. So instead of fixing the cars, how about offsetting their excess nitrogen oxides? VW could chip in a few tens of millions of dollars to keep some of America’s struggling nuclear plants in operation a few years longer. Already Vermont Yankee and Wisconsin’s Kewaunee, authorized to run beyond 2030, have been shut down by their operators because they can’t compete with cheap shale gas.
A 1,000-megawatt gas-fueled power plant, as it happens, produces in a year almost exactly as much NOX as the offending 482,000 U.S. Jettas and Passats. A nuclear plant produces none.
Not only would VW make good on its NOX obligation. Arguably, the company would be striking a blow for rationality.
Angela Merkel, who announced the closure of Germany’s nuclear plants after the Fukushima accident, is said now to rue her precipitate action. If politicians and eco campaigners mean what they say about fighting global warming and reducing air pollutants like NOX to vanishing proportions, nuclear is the only realistic option. Continuing to imagine that miraculous results can be obtained by piling up more mandates on cars is only a formula for more VW scandals.
