In the Volkswagen scandal the most shocking behaviour may not be that of the company but that of the German and other European governments. They have been lobbying for laxer rules so VW and other carmakers no longer have to cheat to meet the target.
In 2017 the European Union implements its Real Driving Emissions test. This means testers will measure emissions from a car being driven rather than relying on laboratory tests.
As it stands, there is no way many European-made cars will pass these tests. Regulators realise they have to act – by making the tests easier.
At a meeting last week, technical officials from EU member states adopted a regulation to allow diesel cars to exceed the official limit on nitrogen oxide (NOx) emissions by as much as 100 per cent.
In addition, the agreement foresees generous transition periods – which is just as well, since current models emit on average seven times permitted NOx levels.
These pollutants kill. The estimated number of deaths due to diesel emissions vastly exceeds the number from road accidents. So you could read the EU’s technical ruling as a decision to kill a few thousand people.
The European Parliament still has an opportunity to reject that agreement. I met an MEP last week who was genuinely outraged – though by no means certain a majority of lawmakers would vote against the agreement.
The original European coal and steel community was founded as a producers’ cartel, and that cartel is still in the genes of the modern EU. What this episode tells us is the extent to which the narrow interests of an industry outweigh all else in the single European market.
The same tendency is at work in other areas of the European economy. When the EU created a single market for finance it did not create a market that would allow people to bank across borders, or obtain a mortgage or consumer credit from lenders located anywhere within the union. What it created was a market that allowed banks to concentrate their wholesale operations.
I suspect this is why the single market has had virtually no macroeconomic impact – for example on aggregate productivity or gross domestic product. When EU ministers and officials come together to harmonise national rules, they do not think much about the citizens whose interests the economy is ultimately supposed to serve – and who are at risk of death due to pollution. It is not about the economy either. All that counts is the interests of producers.
I would hope, and expect, that the disadvantaged European consumer will ultimately bring about the correction – not through their lobbying power but through their purchasing power.
VW sales in the UK fell 9.8 per cent in October, while new car registrations in general were down only 1.1 per cent, according to the Society of Motor Manufacturers and Traders.
In the long run, there is no way that a polluting diesel technology can survive in the marketplace – not even with the help of governments. But before its demise, a lot of bad things can, and will, happen.
There is also a broader issue at stake. The attempt by the EU to manipulate emission regulations to suit manufacturers is a reminder that we should end the glorification of the EU’s single market.
I seriously question the wisdom of the pro-EU lobby in the UK, which has endorsed the single market as the main reason to stay in the EU.
However progressive an idea it might have sounded in the 1980s, the single market has been regressing since the middle of the last decade. In this particular case, it has turned toxic.
– (Financial Times Ltd 2015)
