On Tuesday, a federal judge in San Francisco approved one of the largest corporate settlements in U.S. history. Volkswagen will pay $14.7 billion to resolve most of the claims related to Volkswagen and Audi vehicles that were programmed to cheat on air pollution tests.
The settlement has repercussions here in New England, and not just for car owners who were duped by the company. Volkswagen will also atone for its deceit in part by setting aside billions of dollars to promote electric vehicles and reduce climate-warming emissions from transportation across the U.S.
The “Defeat Device” That Fooled Emissions Tests
As you may recall, in September 2015, Volkswagen admitted that it had secretly installed software known as a “defeat device” in nearly 500,000 VWs and Audis. The software turned pollution controls on when regulators were testing the cars for dangerous emissions; once the cars were back on the road, however, the software turned pollution controls off. The environmental harms stemming from Volkswagen’s deceitful practices were significant. For years, without the owners’ or the public’s knowledge, these cars were spewing nitrous oxides (“NOx”) into our neighborhoods at levels up to 40 times the legal limit. NOx emissions are dangerous to the environment and public health, contributing to global climate change as well as smog, acid rain, and respiratory illnesses.
Making Consumers and the Public Whole
The settlement requires Volkswagen to make up for the harm it caused to consumers and the environment. Anyone who owns a car with a defeat device can choose to have the car fixed or sell the car back to Volkswagen for fair replacement value.
In addition, Volkswagen must spend $4.7 billion to compensate for the environmental and public health harms associated with illegal NOx emissions. This money will be divided into two pots.
First, Volkswagen will invest $2 billion to promote electric cars and other emission-free vehicles. This pot of money can be used for projects such as installation of charging stations, public outreach and education about electric vehicles, and electric car-sharing programs. Of this fund, $1.2 billion is specifically set aside for projects outside of California. Volkswagen will develop an investment plan with input from the states and submit the plan to the EPA for approval.
Second, Volkswagen will pay $2.7 billion into a trust fund that will finance actions by state agencies to reduce transportation emissions in their states. Eligible projects include converting diesel vehicles (such as large trucks, buses, and ferries) to run on less-polluting fuels, and the installation of electric vehicle charging infrastructure. The portion of the trust fund set aside for each state is based on how many of the illegal VWs and Audis were registered there. New England states are set to receive significant funding:
- Connecticut: $51.6 million
- Maine: $20 million
- Massachusetts: $69 million
- New Hampshire: $29.5 million
- Rhode Island: $13.5 million
- Vermont: $17.8 million
The Silver Lining
The funds established by the Volkswagen settlement offer states the opportunity to invest in projects that will catalyze our transition to clean, climate-friendly transportation – but funds must be spent wisely.
In the coming months, states will begin developing plans for how they will use the funds from the settlement. Conservation Law Foundation will be working closely with state agencies to ensure that their funding plans properly incorporate public input, and that projects selected for funding are smart investments designed to generate lasting public health and climate benefits for New England.
For instance, we want to make sure that, to the greatest extent feasible, these one-time-only funds are invested in emission-free buses and trucks – not just lower-emitting diesel or gas vehicles. We will also advocate for investments that expand access to electric vehicles for low-income communities. Additionally, we will urge states to prioritize investments in electric transit and school buses, and to target new charging stations along high-traffic corridors to help alleviate the “range anxiety” (the fear that you won’t be able to find a charging station when you need to fuel up) that keeps people from switching to an electric car.
From great environmental tragedy springs opportunity. States should seize the opportunity offered by the Volkswagen settlement funds to promote a real shift to clean transportation.