Elon Musk, others urge dropping fixes as penalty in VW scandal

Source: Anne C. Mulkern, E&E reporter • Posted: Monday, December 21, 2015

A group of corporate and environmental executives yesterday urged California’s Air Resources Board to steer away from making Volkswagen Group fix cars as part of its emissions cheating scandal.

The alliance of 45 people, which included Tesla Motors CEO Elon Musk, told the Air Resources Board (ARB) that it isn’t the best solution to focus on repairing diesel cars that exceed federal air pollution limits.

“In the simplest terms, we have reached the point of de miminis returns in extracting performance from a gallon of diesel while reducing pollutants, at least at reasonable cost,” the letter says.

“Unsurprisingly, and despite having the greatest research and development program in diesel engines, VW had to cheat to meet current European and U.S. standards,” it says. “Meeting future tighter diesel standards will prove even more fruitless.”

Retrofitting tank systems to small cars is costly and impractical, it adds.

“Some cars may be fixed, but many won’t and will be crushed before they are fixed,” the letter says. “A giant sum of money thus will be wasted in attempting to fix cars that cannot all be fixed, and where the fix may be worse than the problem if the cars are crushed well before the end of their useful lives.”

EPA and ARB testing earlier this year found that the VW installed software in Volkswagen, Porsche and Audi cars that allowed them to circumvent emissions standards. The so-called defeat devices were placed in vehicles with 3-liter diesel engines over several years.

ARB in November told Volkswagen and subsidiaries Audi AG and Porsche AG to craft a recall plan for their cars built between 2009 and 2015 that don’t meet federal emissions standards.

The letter to ARB says that those cars “represent an insignificant portion of total vehicles emissions in the State, and which cars do not, individually, present any emissions-related risk to their owners or occupants.”

The executives on the letter suggest four other steps. They want ARB to “direct VW to accelerate greatly its rollout of zero emission vehicles, which by their very nature, have zero emissions and thus present zero opportunities for cheating.”

ARB should require that the faster rollout of ZEVs result in a 10-for-1 or greater reduction in pollution, as compared to the emissions tied to the diesel fleet cheating. That should happen within the next five years, the letter says.

Others object

The executives suggested that ARB should mandate that VW invest in new manufacturing plants or research and development in dollar totals that it would otherwise pay as fines. Finally, the agency should allow VW some flexibility “in the execution and timing of this plan by allowing it to be implemented via zero emission vehicle credits,” it says.

Those signing included Ion Yadigaroglu, a partner at Capricorn Investment Group; Jeff Skoll, CEO of investment firm the Jeff Skoll Group; Lyndon Rive, CEO of SolarCity; Michael Brune, executive director of the Sierra Club; Jules Kortenhorst, CEO of the Rocky Mountain Institute; Mindy Lubber, president of Ceres; and Lawrence Bender, producer of the movie “An Inconvenient Truth.”

ARB spokesman Stanley Young in an email said that “our focus has and will continue to be cleaning the air and advancing the cleanest vehicle and fuel technologies.” He declined to address the specifics in the letter.

Representatives from an environmental and a social justice group each challenged the executives’ letter. The writers are well-intentioned and their proposal should be considered as a partial solution, but they ignore crucial elements to addressing VW’s scandal, said Bill Magavern, policy director at the Coalition for Clean Air.

“They offer nothing at all to the owners of the defective VWs, consumers who have been defrauded and left holding damaged goods,” Magavern said. “They let VW buy its way out of one of the worst corporate crimes in recent history.”

The only way to deter future intentional violations of environmental laws, he said, is to prosecute the company and the people involved. While those prosecutions wouldn’t come from ARB, “for ARB to cut such a deal with VW before the criminal process has really even begun would be to allow VW to greenwash itself of its intentional contamination of our atmosphere.”

Sara Chandler, environmental equity legal fellow at the Greenlining Institute, said Musk and the others missed key points.

“To truly fix the problem, everyone — even those with famous names and big companies — should think about equity for those hit hardest,” Chandler said in a blog post. “Volkswagen’s illegal pollution fouls air throughout California, but we know that Californians in disadvantaged communities are hardest hit.”

“We should be asking how Volkswagen can benefit those who most need the cleaner air and the economic and health benefits. Why aren’t we?” she added.