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7 Things to Know About Billions in VW Clean Transportation Funds

This post was co authored by Katherine Clements, a Legal Assistant with Sierra Club's Environmental Law Program.

From 2009 to 2015, Volkswagen sold more than 11 million diesel cars with software designed to cheat on emissions tests. As a result, these cars emitted up to 35 times more nitrogen oxides than allowed by law. This smog-forming pollution has significant health impacts, from asthma to heart and lung damage. After being caught and sued for deception, Volkswagen agreed to settle by spending up to $14.7 billion, with millions of dollars allocated to each U.S. state to ramp up clean transportation programs. States are currently in the process of developing plans for this funding, which means environmental and public health advocates have a great opportunity to promote greener, cleaner transportation programs.

Here are the seven things you should know in order to ensure states make the best use of the funds available.

1. This is a great opportunity to clean up our air and improve public health.

The emissions from Volkswagen's cheating cars were a staggering 15 to 35 times above the U.S. Environmental Protection Agency (EPA) compliance level for nitrogen oxide ("NOx"). NOx is a group of air pollutants, one of the six criteria pollutants monitored and regulated by the EPA. NOx is a precursor to ground-level tropospheric ozone, more commonly known as "smog." It has led to increased health expenditures and higher rates of asthma.

Previous programs to reduce NOx pollution in the United States have been very effective. The EPA reported that by spending $470 million, the United States achieved 203,900 tons of NOx emission reductions and will see 1,400 fewer premature deaths as a result. If we can expect similar results with this $2.7 billion Volkswagen settlement funding, the United States can expect millions of tons of NOx, and CO2 emission reductions, hundreds of thousands of tons of particulate matter emission reductions, and tens of thousands of premature deaths avoided.

2. This is a lot of money.

While a majority ($10 billion) of this settlement is set aside for consumer vehicle buyback and modification programs, and Volkswagen itself will spend $2 billion to invest in zero-emission vehicle infrastructure and non-brand-specific EV advertising, this still leaves a whopping $2.7 billion for states to invest in clean transportation NOx emission reductions programs.

From this $2.7 billion, each state is allocated a different amount based on the proportion of cheating vehicles sold in each state. For example, New York can claim at least $117 million, and Illinois can claim at least $97 million. If any states forgo their allotment, then the other states get more.

3. This money can accelerate green transportation.

For the first time in recent history, carbon emissions from the transportation sector surpass those from the power sector in the United States. Almost all (95 percent) of the world's transportation energy comes from petroleum-based fuels, largely gasoline and diesel.While the Volkswagen settlement is focused on reducing NOx emissions, it's also an important opportunity to simultaneously slash climate change emissions.

Electric vehicles (EVs) are significantly lower in greenhouse gas emissions than diesel or compressed natural gas vehicles, even factoring in the emissions from the electricity used to power EVs. And EVs are the only vehicles that get even cleaner over time as we switch to more renewable sources of electricity. With lower fuel and maintenance costs, the lifetime costs of EVs are also cheaper than conventional vehicles. The Volkswagen settlement funds will be well-spent on vehicle electrification programs.

4. Deadlines are coming up.

If states miss the deadline to claim their portion of the $2.7 billion, they will be permanently excluded from the funding. Although the exact date is not yet known, the Environmental Mitigation Trust will be established sometime in the first half of 2017. Once this happens, the clock starts ticking, and states have 60 days to submit their certifications and nomination for a designated beneficiary -- the agency in charge of funding distribution. Once the states' beneficiaries are announced, states will have 90 days to submit their Beneficiary Mitigation Trust Plan -- an overview of how they will spend their millions to slash dirty NOx emissions.

5. You have a voice.

Right now, many states, such as Connecticut, are already asking for comments on how their constituents would like to see the Environmental Mitigation Trust money spent. Other states' public comment periods have passed, such as Colorado and Michigan, but will likely keep requesting public and stakeholder input as the Volkswagen settlement plays out.

Whether or not a state has a formal public comment period, it's important to make our voices heard in a variety of ways such as written organizational comments, coalition sign-on letters, action alerts, op-eds, letters to the editor, and direct meetings with policymakers. We also recommend collaborating with allies. You'll likely be on the road to success if you can show state decision-makers that a coalition of voices from environmental, public health, and industry groups support wise investment of Volkswagen resources.

Additionally, Volkswagen is currently requesting ZEV program proposals for how to spend its $2 billion through the National ZEV Investment Commitment -- the submission period will remain open until January 16, 2017.

6. You can advocate for wise use of the funds.

The best use of the funds is for EVs. Up to 15 percent of the Volkswagen mitigation funds can and should be spent on EV charging stations. Remaining funds should be spent on investments like zero-emission transit buses, electric school buses, electric forklifts, and cleaner port vehicles. The Sierra Club has some terrific resources with more information, including fact sheets and template letters, here.

7. You can advocate against unwise use of the funds.

In theory, states could use Volkswagen funds to replace or upgrade diesel vehicles with newer diesel or compressed natural gas (CNG) technology. Ironically, for a settlement intended to right the wrongs of massive pollution, this would swap one dirty fossil fuel for another. Research commissioned by the California Air Resources Board found that an electric transit bus is about 77 to 78 percent lower in greenhouse gas emissions than diesel and CNG buses. Electric or hydrogen fuel cell vehicles are also somewhat lower in NOx emissions. In the case of natural gas vehicles, CNG vehicle investment would also lock us into decades of sunk costs of natural gas fueling infrastructure. We need to advocate for the funds to be spent on truly cleaner vehicles and not allow the Volkswagen settlement to lead to more of the same dirty and dangerous natural gas and diesel vehicles.

Volkswagen's emissions deception and pollution were astonishing, but the silver lining is a settlement that will help us accelerate toward cleaner transportation.

Gina Coplon-Newfield is Sierra Club's Director of Electric Vehicles Initiative. Katherine Clements is a Legal Assistant with Sierra Club's Environmental Law Program.

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