The Silver Lining in the VW Emissions Cloud

In a monumental admission of automotive fraud, Volkswagen's chief executive Martin Winterkorn resigned last Wednesday amid revelations that 11 million VWs were built to cheat on clean air tests.

The scandal came to light last week, when the U.S. Environmental Protection Agency and the California Air Resources Board blew the whistle on the German auto giant for selling half a million of the stealth polluters in this country. The cars, diesel-powered models sold since 2008, contain software that defeats emission controls. As a result, they're pumping out up to 40 times the legal limit of nitrogen oxides, pollution associated with asthma attacks and other respiratory ailments. This is bad both for Americans' health and the auto industry. Just as galling for me is that the company was not only cheating, but marketing their products as "clean diesel" cars.

Diesel engines have always been more popular in Europe than America. Generally speaking, the engines run longer, produce more torque and are much more efficient than gasoline-powered equivalents. However, diesel engines also produce a huge amount of nitrogen oxides and fine particulate pollution--dangerous soot--and diesel fuel contains a high level of sulfur, which fouls catalytic convertors. Under the 1990 Clean Air Act, EPA regulations for passenger vehicles emissions became stricter than those in Europe. As a result, high polluting, diesel cars of the day could not be sold in the US.

But even as these cars disappeared from the roads, diesel trucks remained a familiar sight on America's highways, as they were not subject to the same regulations. A critical element of the commercial supply chain in the United States, diesels were also a big part of conventional pollution--polluting ten times more than the equivalent gasoline engines.

In the mid-1990s when I was running EPA's Office of Transportation Air Quality, I began talking to my EPA engineers as well as people in the auto and truck industry on how to address diesel emissions. It became clear that there was a pathway to clean diesel if we could reduce the sulfur in diesel fuel, but it would have to be on the order of a 97% reduction! Combining clean diesel fuel with the advances in diesel technology, which had made diesel cars so popular in Europe, could make clean diesel cars possible in the US. Many European manufacturers, including VW, wanted to bring their diesel cars to the US.

In 2000, under president Clinton, EPA took a historic action to make "clean diesel" a reality in the US. We finalized standards that require the oil industry to virtually zero out sulfur in diesel fuel and the diesel engine manufacturers to reduce tailpipe emissions by 95 percent. As a result, thousands of premature deaths and millions of respiratory illnesses would be averted.

"Clean Diesel" became an advertising slogan and a new generation of diesel cars was introduced in the US in the mid 2000s. Mercedes introduced the new US models in 2006.

Soon after, VW and BMW introduced new US diesel models. Clearly, though, VW thought they could play by different rules than the rest of the industry and abused a lot of hard work designed to allow more diesels on American roads.

But, VW still has a possibility for redemption. First, the new CEO Matthias Muller should not only replace the technical and other leaders who were responsible for the emissions scandal, but VW should undertake offsetting actions to make up for all the extra pollution his company has kicked into the nation's air. For example, they could retrofit old diesel school buses and trucks on the road.

Secondly, he needs to repair his company's relationship with customers by repairing their cars to meet the standards. If VW can't get the cars to comply with US fuel efficiency standards without compromising performance and fuel efficiency, they should buy them back from consumers.

Finally, if Muller still wants VW to be world's largest automaker, he should also shift the overall strategy of the company away from diesel and help the company get over its irrational skepticism towards electric powertrains. This could be the ultimate silver lining in the proverbial cloud for them. The rest of the automotive industry believes that electrification is needed to power the cars of the future. VW has historically been against electrification and argued that clean diesel was a better solution. Muller should direct VW's engineering organization to participate in this race for the future. VW's scale, resources and technical expertise directed at electrification would help increase the EV and PHEV vehicles on the road and the same time drive down costs faster to achieving parity with internal combustion powered vehicles, a technology of the past.

As huge as the VW scandal is, there are bigger problems. The companies who help address climate change will be critical for humans' continued existence. The thousands of researchers at the United Nations-supported I PCC have declared unequivocally that we need to reduce GHG emissions by 80% below 2005 levels just to mitigate the worst effects of climate change. That means VW and other automakers need to have at least half of their fleet at zero emissions by around 2035 on the road to a fleet in 2050 that is at zero emissions and averaging 180mpg. The only way we can even come close to that is with electrified powertrains and low carbon fuels. The talented engineers at the world's second largest automotive company need to have as much time and money as possible to achieve these goals. Effectively combatting climate change will more than put the shine back on the historic VW brand.