You’ve probably heard about the Volkswagen emissions scandal. The official story is that engineers at VW faked emissions test results to meet EPA requirements. VW made it appear as though its diesel engines produced fewer pollutants while being tested than they actually produce on the road. When independent testers identified the issue, VW was forced to fix 11 million vehicles, and pay over $7 billion in fines, refits, and buy-backs. This much is true.

The $8 billion agency missed what a professor and two students easily discovered.

However, that’s not the full story. VW cheated because the EPA introduced an ultra-stringent emissions standard with the expectation that automakers would invent compatible technology. VW engineers faced intense pressure to invent suitable technology before the deadline.

The rigid EPA regulations reduced some types of pollutants while creating more of others, and forced a radical environmentalist agenda, set in California, to shape the design of cars for a global market. The EPA rules drastically increased the cost of diesel vehicles, forcing trucking companies to install $20,000 pollution control systems, and driving up costs for all American consumers.

Furthermore, the scandal exposed the incompetence of the EPA in regulating the auto industry, as the $8 billion agency missed what a professor and two students easily discovered.



Finally, and perhaps most regretfully, the EPA regulations harmed the diesel market, which produces vehicles that are both more efficient and cleaner than petrol vehicles.

The EPA’s Unrealistic Expectations

The new United States “Tier 2” rules were set in 1999.They were based on California’s LEV-II ULEV standard with a “phase-in” period from 2004-2009. Environmental regulations in the U.S. and Europe typically use a “phase-in” period so that manufacturers have time to invent technology that meets the more stringent environmental rules.

This is pretty fantastic if you think about it. Every few years, a committee of bureaucrats decides that your car, dishwasher, toilet or vacuum should produce less pollution, and demand that the manufacturer invent technology to make it possible within “X” years. This works so long as the demand is physically and logistically possible – or until it’s not.

The students found that the Jetta produced more than ten times the allowable NOx levels.

Students Are More Efficient Than the EPA

Two scientists at West Virginia University decided to test whether the EPA’s testing matched real-world performance. They expected test results that were very close to the official standards. And with two students in the car, they put 2,400 kilometers on a VW Jetta by driving it from Los Angeles to Seattle and back again.

To their surprise, they found that the Jetta produced more than ten times the allowable NOx levels. NOx refers to a family of mono-nitrogen oxide particles, which produce harmful effects like acid rain and ozone in high concentration. Significant sources of NOx include lightning (8.6 million tonnes/year), fertilizers, coal power plants, and fuel used for transportation.

The scientists found that VW cars produce more NOx than permitted by the 1999 EPA regulations in real-world driving. But they could also detect when tests were conducted under laboratory conditions and artificially lower emissions. This confirmed what millions of VW owners already knew: their VW diesel cars had much higher fuel mileage than the EPA stickers stated. The scientists reported their findings to the EPA, forcing the agency to open a formal investigation that led to a global recall.

EPA Policies Encouraged VW to Cheat

Why did the VW engineers feel the need to cheat on their emissions tests? Remember that the EPA regulations for the California-based NOx standard was issued in 1999, with a five year standard.

Our environment has an infinite number of variables affecting the quality of everyone’s lives.

VW struggled to meet the new standards with a series of designs, but it was forced to suspend sales of current diesel in 2007. Finally in 2008, it announced new Clean Diesel cars which were able to win numerous “green” awards thanks to the emission-cheating software.

Why was VW the only automaker to cheat its emissions? Most automakers only have one or two high-end diesel vehicles in their lineup so they could take the additional costs and lower fuel efficiency caused by the new standard. Over 30 percent of VW vehicles were diesel however, so they probably felt that they could not comply with the new regulations. At least not without a major hit to either profits or sales.

In order to reduce NOx output, petrol cars use devices such as catalytic converters, which have greatly reduced pollutants from cars since 1975. Because diesel engines have a higher oxygen output, they don’t work nearly as well. As a result, other technologies have been introduced, such as exhaust recirculation systems, urea-based exhaust treatments, lowered engine temperatures and electronically controlled fuel injectors. All modern vehicles are essentially sophisticated computers which continuously monitor many engine parameters and optimize for both engine efficiency and pollution output under legal standards.

There is a trade-off: minimizing exhaust pollutants takes energy which can be used to move the car, so for a given power output, the more NOx a car produces, the more efficient it is. Efficiency can be measured in both mileage and CO2 output, so when the EPA mandated lower NOx production, they effectively lowered fuel efficiency and increased CO2 output.

VW was forced to choose between delivering clean but underpowered and inefficient cars, or cheat in lab tests and deliver power and fuel efficiency on the road. They sided with the drivers over the EPA.

New Regulations Increased Gas and Product Prices

Most people assume that new EPA regulations are good for the environment. But this is far from being absolute.The “environment” is not a single metric, but our entire planet, and with an infinite number of variables affecting the quality of everyone’s lives. When a committee of EPA bureaucrats bowed to political pressure and passed new NOx regulations in 1999, they considered only a single variable: the amount of NOx pollutants produced by diesel vehicles in the air. NOx is harmful to animals, so the fewer the better. (Plants, on the other hand, turn it into nitrogen and use it as fertilizer).

While minimizing harmful chemical in car exhausts is important, it’s not free. The emission control systems lower the fuel efficiency of cars (generating more CO2) and require complex and exotic technologies. Catalytics converts are made of precious metals such as platinum, palladium and rhodium. Diesel emission reduction technology that can comply with the new EPA demands requires complex and immature new technologies that raise costs and require more frequent maintenance.

An emission control system for a commercial truck can cost $20,000 and requires regular and expensive maintenance. The increased transport costs raise the cost of everything in our economy – from your Amazon Prime subscription (which pays for package shipments) to the gas fuel (brought in by gas tankers). For example, take a company like Flying J, which sells 7 billion gallons of fuel each year. They need over 1500 trucks to deliver that fuel, and each one requires a $20,000 pollution control system.

How much is a marginal difference in air quality worth to you, if a miniscule increase in pollution meant improved living standards for everyone? This is a valid question, but the EPA’s (and California’s) blanket stance that all pollution is bad, and internal combustion vehicles must be eliminated from existence leave no room for a cost-benefit analysis.

The EPA's Solutions Hurts People and the Environment

Here is what actually happened when environmental activists forced the EPA to make US diesel standards the highest in the world:

Some companies cut diesel engine production because it was too much trouble to comply.

Some companies cheated and got caught, putting their entire business in jeopardy.

Individual diesel owners who care about the superior performance and efficiency of diesel engine hacked their cars, bypassing EPA regulations.

Hacking a diesel car is not hard. Because modern cars are computers on wheels, owners who want an efficient and high-performing engine can get it tuned from a friendly mechanic. If they live in a state which requires inspections, the hack can be turned off as needed. Other owners change out to a non-stock thermostack to burn the fuel hotter (and a bit dirtier), or bypass exhaust recirculation systems entirely. These owners are not out to destroy the environment – they just want a fuel-efficient vehicle, or to haul their trailer, or climb a mountain road.

The real shame in this story is that diesel’s reputation has been sullied despite its superiority for many applications. Diesel engines have lower RPM at peak torque, allowing them to remain efficient at high altitudes or hauling heavy loads. They require service at longer intervals (and commercial truck engines can last a million miles with proper maintenance), and are typically more efficient and higher-mileage than petrol engines.