VW Dieselgate Part 1: How to Build a Catastrophe (2017)

The effects of catastrophe spread in an uncontrollable and unpredictable manner. For example, BP’s 2010 Deepwater Horizon blowout in the Gulf of Mexico combined with Enbridge’s Kalamazoo River spill in the same year lowered the public’s trust in oil company safety and helped block TransCanada’s Keystone II pipeline approval in 2015.
Because of these events it is much more difficult to obtain approvals for new pipelines in Canada and the U.S.

Similar forces are at work after The Volkswagen Group (VW) was caught cheating U.S. emissions tests for its diesel cars in 2015. VW was hit with harsh penalties in the U.S., costing the company $25 billion U.S. so far. But the effect of Dieselgate will have the most corporate damage in Europe where diesels have captured half the auto market.

Because of Dieselgate, Europeans are becoming aware that it is common for diesels to have vastly greater levels of NOx pollution in real life driving than in government emissions tests. A 2016 study conducted by the U.K. Ministry for Transport found that new Euro5 diesel cars emitted on average slightly more NOx pollution than 1990 Euro1 emission levels. The emission limits had shrunk 81% from 1990 to 2016, but average real-world emissions stayed the same.

European cities are choking from what had been unacknowledged diesel pollution. The regulators will be forced to impose emission levels outside of their labs, where the emissions actually occur. Real enforcement of pollution limits will crush diesel sales because action to reduce NOx emissions weakens other cherished performance measures of diesels like fuel mileage and torque. Customers will not buy diesels that meet emission regulations and that is why the manufacturers learned to optimize tests.

See our report, “Volkswagen’s Dieselgate Part 2: VW is not a Rogue Company in Europe,” for more detail on NOx pollution from Europe’s vast passenger diesel industry and the disturbing effect of a captured regulator on corporate ethics.

Reports for Download

  • Preventing Catastrophe in Organizations. (2014). Download Here.
  • Preventing Catastrophe in Organizations, Executive Summary. Download Here.
  • Volkswagen’s Dieselgate Part 1: How to Build a Catastrophe. (2017). Download Here.
  • Volkswagen’s Dieselgate Part 2: VW is not a Rogue Company in Europe (to be released November 2017).