By Markus Pohlmann

Sometimes, politics in Germany is more than arduous maneuvering or media-whitewashed standstill. Sometimes it is a great drama, or rather an well-versed chess game. And Angela Merkel once again showed us all with the diesel summit how it is played in Germany.

The consequences of the summit are remarkable. Volkswagen now offers new cars, for which you get a total of up to 40 percent discount, for example, if you have your Euro 4 diesel car scrapped (“environmental premium”). If you trade in your old car, you get an extra 23% discount for cars of other brands due to the so-called “conquest premium for trade-in”. If you switch to electro-mobility, you can once again significantly increase this discount. Since September 1st, new regulations have been in place, so that the emissions testing can be carried out under real driving conditions. The communities worst affected by the NOx emissions and fine particulates are being soothed by funds to change urban transport systems and improve the charging infrastructure for electric vehicles. In addition, “software updates” have been made compulsory so that the type approval for the cars do not have to be withdrawn. “Hardware updates,” Merkel said in an interview by Der Spiegel last week, “are expensive and technically enormously complex. We must therefore carefully consider whether such a retrofit requirement for engines really brings the results that we need because we would thus restrict the financial capabilities of the automobile industry to invest in new and modern technologies” (Der Spiegel 36/2017, p20).

What this means is shown both by the Chancellor’s statement on the “end of the combustion engine” and the announcements by the car industry at the ongoing International Automobile Exhibition (IAA) in Frankfurt. Volkswagen alone wants to increase the investment in electric cars to 20 billion euro by 2030. More than 80 new variants of autos with electric motors are planned by brands of auto concerns by 2025, including some 50 pure electric models and 30 plug-in hybrids, said VW CEO Matthias Müller in the run-up to the IAA. As we said: well-versed chess game and great drama! But does the environment really improve in the long term and what does the whole story tell us about the political regulation of the auto sector? But even electromobility is only less damaging for the environment, if the energy turnaround is carried out more thoroughly and the batteries are further developed (Source: Deutschlandfunk, 31. Juli 2017).

A pillar of the German economy – effectively regulated in the EU and Germany?

It is no coincidence that the German automobile concerns are in the pillory of the US authorities and the US judiciary, which have clearly defined the borders again breach of rules. In Europe and Germany, on the other hand, very unclear, malleable applications regulations and the controls remained rather superficial. So the EU in Article 5, Clause 2 of its Emission-Basis-Directives of 2007 exceptionally permits defeat device, when “… the device is necessary to protect the engine from damage or accident and to ensure the safe operation of the vehicle” (Article 5, Paragraph 2, Clause 2, Lit. a EBV). The Federal Ministry of the Interior, therefore, states in its report of the investigation commission that although all manufacturers use such defeat devices, no inadmissible defeat devices are used (report of the investigation commission of the BMVI 2016: 119). Depending on the interpretation, the defeat devices appear here as legal at one time and irregular at another. In this way, the institutional environment in Europe and the “industry-driven” policy of the Ministry of Transport in Germany promoted the auto sector’s susceptibility to deviance in terms of environmental degradation, which is accepted with approval. The situation in the US is diametrically opposite to the situation in Europe. Here, the Volkswagen Group did not get away as cheaply as it did a few decades before, because the penalties, restitutions and legal costs now add up to 22.6 billion US dollars. But this is still far from over. A further lawsuit filed by the State of Wyoming for violations of environmental laws was dismissed by the presiding judge, Charles Breyer, in San Francisco on the ground that the alleged violations of the Clean Air Act were a federal affair of the US Environmental Protection Office. This is probably why VW is also “all-clear” in the complaints of Illinois, Minnesota and Ohio. At the end of March, VW had reached settlements with other states. But with Alabama, Missouri, Montana, New Hampshire, Texas and Tennessee there are complaints from six other American states, which are to be heard by other courts. And here the outcome seems rather uncertain (Source: ZEIT ONLINE, 1. September 2017).

The differences in law enforcement and its consequences for the environment

What is the difference in the public handling of with the defeat devices in Europe and the USA? There are certainly many aspects that can be cited here, from the different legal systems to the political interests that are behind them. I would like to emphasize only one aspect of this complex mixture: there is a link between defective regulations of a branch and the taken-for-grantedness of the deviations from rules in companies. Institutions and regulations are defective when there exists laws and directives, f.e. like the exhaust gas standards, but these either fail to set sufficient standards or their administrative enforcement is patchy or inadequately guaranteed. In this case, the constitutional legal bases are not undermined, but the purpose of the regulation is largely missed. The protection of the environment is only “nice to have”, which we have repeatedly witnessed in the past months. Such a defective regulation creates, in my view, important preconditions for the emergence of forms of deviant self-regulation at the level of enterprises. And that is exactly what happened in the case of the Dieselgate disaster. Defective institutions are, in this sense, functional for the maintenance of a system which systematically and legally subverts the purposes of statutory regulation.

Lawrence Lessig called this phenomenon “institutional corruption”. While the USA is rapidly enforcing its stricter laws in this case, environmental protection in Germany and Europe falls by the wayside in this case. As a consequence, according to a report in the news magazine Der Spiegel, the off-road vehicles that had been taken off from the market by Porsche in the USA reappeared in Germany – of course, slightly retrofitted and equipped with a software update. Other countries, other ways to pollute the environment. For the software update prescribed by the Chancellor basically does not solve the problem of excessive Nox and fine particulates emissions. It is primarily a formal regulation relating to the approval of the vehicles, which still fails to regulate the environmental protection in this sector effectively. Unfortunately, this is not uncommon in the case of environmental protection: many studies show that the significance of environmental offences in court proceedings is often reduced in favour of the accused, and the national law enforcement authorities give only a low priority to such crimes.

Kick it like Merkel – that is, once more: right-of-way for the auto industry, and we, the drivers, will presumably sanction it frequently by buying their low-priced new cars on sale.

 

For further information about the diesel summit, see the article in The New York Times https://www.nytimes.com/2017/08/02/business/energy-environment/germany-diesel-car-emissions.html?mcubz=0

 

Sources

Europäische Union 2007: Article 5, Clause 2 of its Emission-Basis-Directives [http://eur-lex.europa.eu/legal-content/de/TXT/?uri=CELEX%3A32007R0715]

Bericht der Untersuchungskommission „Volkswagen“ des BMVI 2016 [https://www.bmvi.de/SharedDocs/DE/Anlage/VerkehrUndMobilitaet/Strasse/bericht-untersuchungskommission-volkswagen.pdf?__blob=publicationFile]

Deutschlandfunk, 31. Juli 2017 “Elektroautos. Gut für die Stadtluft, schlecht für die Umwelt? abrufbar unter: [http://www.deutschlandfunk.de/elektroautos-gut-fuer-die-stadtluft-schlecht-fuer-die-umwelt.697.de.html?dram:article_id=392370]

ZEIT ONLINE, 01. September 2017 „US-Richter weist Klage gegen VW ab” [http://www.zeit.de/wirtschaft/2017-09/usa-volkswagen-diesel-rechtsstreit-wyoming]