THE BLOG
29/09/2015 08:51 BST | Updated 27/09/2016 06:12 BST

Volkswagen Fiasco Underscores Need for Auto Industry Transformation

There has always been something Churchillian about VW's logo, it looks more like a gesture of contempt rather than a shiny badge of honour, making it easy to lack sympathy for a company whose emissions have come home to roost...

There has always been something Churchillian about VW's logo, it looks more like a gesture of contempt rather than a shiny badge of honour, making it easy to lack sympathy for a company whose emissions have come home to roost.

2015-09-28-1443427279-1267217-byMarkusMarziflickr.jpg

by Markus Marzi @ flickr

Words like "scandal" and "disgrace" have been dominating the media coverage of the revelation that Volkswagen cheated on emission tests that resulted in around 11 million cars worldwide dumping 40 times more than the permitted level of nitrogen oxide (NOx) into our air. The US Environmental Protection Agency exposed that VW diesel cars had much higher emissions than tests had suggested, and "defeat devices" were installed and activated when vehicles detected a test. That's a long-winded way of saying that VW deliberately cheated on their emissions tests. Environmentalists have been up in arms at the damage caused by excessive emissions. And rightly so! A study suggests that, emissions of NOx and "other nasties from cars' and lorries' exhausts cause large numbers of early deaths -perhaps 58,000 a year in America alone." Volkswagen has set aside €6.5 billion for costs to pay the price for this ruthless emitting, although this will be unlikely to cover the $18 billion in fines it is facing, along with the priceless reputational damage the firm will incur.

At a time when world leaders are gearing up for the United Nations Climate Change Conference (COP 21) in Paris in early December, such a blatant disregard for carbon emissions and pollution by a European firm is certainly a slap in the face for those campaigning for a global and binding climate change agreement. Furthermore, the whole fiasco raises the question of how many other auto companies are cheating on their tests, given the EU's own lax emissions testing standards. As governments and organisations are seeking to limit our footprint on the environment, Volkswagen's moves have knowingly and singlehandedly sought to undermine the regime, leading to questions on how the EU and the COP 21 will seek to meet global emissions targets in the face of such inconsistencies.

To put the scale of this crisis into perspective, in this country we are all touched by the Climate Change Levy, which is simply put a tax on UK business, collected by energy suppliers, with the aim of providing an incentive to increase energy efficiency and to reduce carbon emissions, thereby promoting the use of energy from renewable resources. We are all involved in this because your local factory, bank, solicitor or shop will have to subscribe to this and of course, costs have to be passed on to customers, otherwise businesses won't survive. With this in mind, consider the estimated damage caused by Volkswagen's rigging of emissions tests, which means that according to experts they may be responsible for nearly 1m tonnes of air pollution every year, which is approximately equal to the UK's combined emissions for all power stations, vehicles, industry and agriculture. Suddenly the magnitude of this law-breaking takes shape. Here we are subscribing to Climate Change Levy and there they are raking in profits by breaking the environment laws intended to put us on the path of a greener future.

But unfortunately carbon emissions are not the only problem plaguing the automotive industry, as the whole sector is under the spotlight for health and safety issues as well. Ford, Toyota, Honda and others have recalled hundreds of thousands of their cars because of fault air bags, brakes and so on. Jean Todt, FIA President and Special Envoy of the UN Secretary General for Road safety, recently expressed his concern at the 1.3 million road deaths each year, and called for the mobilization of "the road safety community, world leaders and governments, to fight for safer roads, safer vehicles and better driving rules." He also proposed a similar financing method as UNITAID, which puts a levy on airline tickets to fund the fight against diseases such as HIV/AIDs, to establish an effective road safety regime. By taxing sales from the automotive industry, we could create a fund dedicated to helping all nations fight the challenges of road safety, thereby achieving the UN's goal of saving 5 million lives on roads by 2020.

The whole crisis may have a silver lining: as road safety and vehicle emissions have increasingly hit the spotlight and come under the radar of the UN, we can hope to see not only increased funding for road safety initiatives, but also efforts from other vehicle manufactures to step up their game and prove to the world that unlike Volkswagen, they are serious about climate change and cutting down emissions.

The COP 21 would certainly be the ideal arena to call for a universal regime of regulations and independent tests for the automotive industry, meanwhile promoting a switch to cleaner and more energy efficient cars that run on hydrogen, electricity, or are hybrids. While VW stands on death row, there is hope for the car industry yet.