VW’s Deepwater Horizon?

VW factory

VW factory

In recent years, as Volkswagen diesel vehicles were acing their smog tests, “many of my Birkenstock-wearing, dog-owning, El Capitan-summiting colleagues and graduate students ran out and traded in their Prii for the VW TDI wagon,” writes Maximillian Auffhammer, a resource economist and professor in Berkeley’s College of Natural Resources.

But VW, it turns out, was cheating, in what he calls “one of the biggest environmental scandals since the Deepwater Horizon disaster.”

“In a Lance Armstrongian feat of deception,” the company “installed a piece of software called a ‘defeat device’ that turns on the full suite of pollution control gadgets when cars are being smog-tested.” he writes. But as soon as you “leave the testing station and head out for your Yosemite adventure, with Fluffy barking in the back, your car emits 10 to 40 times the amount of NOx you just reported on your smog-check card.”

How should the EPA and the courts (if they get involved) calculate “the optimal fine in order to deter other manufacturers from engaging in such behavior?”

Auffhammer reaches into his resource economist’s toolkit for some back-of-the-envelope calculations. Read his blog post here.