The scandal involving deliberate cheating on U.S. air pollution emissions tests by Volkswagen (VW) for its diesel vehicles continued to generate amazing revelations. After interviewing former engineers for VW, a reporter for the New York Times revealed that the cheating started in 2008 after VW discovered that its new EA 189 line of diesel engines would not meet U.S. emissions standards. Rather than stopping production of the new engines, VW decided to install software that would cheat on the emissions tests. Jack Ewing, Volkswagen Engine-Rigging Scheme Said to Have Begun in 2008, N.Y. Times, Oct. 4, 2015.
Even more amazing, the New York Times reports that VW later became so enamored with the success of its deceptive “green diesel” campaign that it demanded that EPA award it special fuel economy credits for its “green diesel” engines. After EPA refused, VW protested by become the only major auto manufacturer to refuse to support the increase in U.S. fuel economy standards that President Obama announced in July 2011. Aaron M. Kessler, Volkswagen Sought a Green Seal for its Diesel Cars, N.Y. Times, Oct. 6, 2015. The widening VW scandal has led some observers to question whether other companies may be cheating on green energy tests. Five years ago LG was caught with an energy-saving program in its refrigerators that operated only when the appliances were undergoing energy efficiency testing. This has resulted in increased vigilance in testing procedures. Jad Mouawad, Cat-and-Mouse Games with Regulators Not Confined to Cars, N.Y. Times, Oct. 10, 2015, at B1.
Although a strong consensus is building for severe punishment of VW, some question whether significant criminal penalties can be imposed. Title II of the Clean Air Act, which governs mobile sources, has a specific provision for civil penalties, but not for criminal ones. Former Congressman John Dingell, a long-time defender of the auto industry from Detroit, noted that civil penalties are “easier, speedier, quicker” and that “the cost to Volkswagen is going to be unbelievable.” Dingell believes that the risk is “very real” that VW may go out of business. Amy Harder and Aruna Viswanatha, Volkswagen May Not Face Criminal Charges, Wall St. J., Sept. 29, 2015. At a hearing before a House subcommittee on October 8, Michael Horn, president of VW’s American subsidiary, stated that he did not find out about the emissions cheating software until September 2015, though he had been aware since early in the year that VW was having problems with EPA.
On October 1 India became the last major country to submit to the United Nations its plan for mitigating climate change. While India still refuses to commit to cap its emissions of greenhouse gases, it pledges to reduce the carbon intensity of its economy by 35% by 2030. India also pledges eventually to produce at least 40% of its electricity from non-fossil fuel sources.
Two weeks ago Royal Dutch Shell surprised the world by announcing that it would end its oil exploration off the north coast of Alaska because of “disappointing results” from the exploratory wells it drilled in the Chukchi Sea. For nearly a decade, Shell has been seeking to drill in Arctic waters off of Alaska, even as other major oil companies canceled their plans to do so, deeming it too risky to drill in the harsh Arctic environment. It had been estimated that it would cost more than $70/ barrel to produce oil from Arctic offshore areas, making drilling there of little economic sense when oil prices linger in the $40s/barrel.
On October 1 EPA announced that it was taking final action to lower permissible levels of ozone in the ambient air. EPA lowered the national ambient air quality standard (NAAQS) for ozone from 75 to 70 parts per billion (ppb). Four years ago the White House blocked an EPA effort to propose a lower NAAQS for ozone because of fear that it would cause political controversy prior to the 2012 election. Environmentalists were disappointed that EPA did not lower the standard to 60 ppb, which was what they believe the science justifies. EPA estimates that compliance with the 70 ppb standard will cost $1.4 billion/year in 2025, while producing annual benefits worth $2.9 to $5.9 billion. Nevertheless, industry groups, which had been running deceptive ads praising the existing NAAQS they once opposed, criticized EPA’s action.
On October 9 the U.S. Court of Appeals for the Sixth Circuit by a 2-1 vote issued a nationwide stay of EPA’s “waters of the U.S.” rule clarifying the reach of federal jurisdiction under the Clean Water Act. Brent Kendall and Amy Harder, Court Puts New Water Rule on Hold, Wall St. J., Oct. 10-11, 2015, at A3. Curiously, the court did so without even finding that it had subject matter jurisdiction over challenges to the rule. The two judges in the majority argued that it would be helpful to put everything on hold so that regulated entities would not have to incur costs complying with the rule, though such costs would only be incurred if someone wanted to discharge material into a water body over which federal jurisdiction is uncertain. The court majority did say the following in its order: “the clarification that the new Rule strives to achieve is long overdue. We also accept that respondent agencies have conscientiously endeavored, within their technical expertise and experience, and based on reliable peer-reviewed science, to promulgate new standards to protect water quality that conform to the Supreme Court’s guidance. Yet, the sheer breadth of the ripple effects caused by the Rule’s definitional changes counsels strongly in favor of maintaining the status quo for the time being.”
Fires from illegal slash-and-burn operations in Indonesia have again cloaked southeast Asia in a choking haze. Thousands of schools have been closed, flights have been grounded, and levels of air pollution have soared. It is estimated that more than 25,000 security forces are fighting the fires, particularly on the islands of Sumatra, Borneo, and Sulawesi. The haze is estimated to have caused billions of dollars of damage in Indonesia, Singapore, Malaysia, Thailand, and Vietnam. Ben Otto, Smoky Haze Costing Southeast Asia Billions of Dollars, Wall St. J., Oct. 9, 2015.
On October 5, U.S. negotiators announced that they had reached agreement on the largest regional trade agreement in history, the Trans-Pacific Partnership (TPP). The 12 Pacific Rim countries that agreed to the accord account for nearly 40% of the global economy. Environmentalists praised the provisions of the TPP that make it easier to crack down on trade in illegally harvested timber and endangered wildlife, but they are skeptical of the TPP’s dispute resolution procedures that may make it easier for businesses to challenge environmental regulations. In the final days of the negotiations, the parties agreed specifically to bar the tobacco industry from using the dispute resolution mechanisms to challenge tobacco regulations. While the World Wildlife Fund has praised the agreement, other environmental groups argue that it will make it more difficult for countries to regulate emissions of greenhouse gas emissions.