LAW AND THE LUXURY ENVIRONMENT

ENVIRONMENTAL LAW AND

DIESELGATE 2015, ASTONGATE 2020

- Contents

Sr. no. Particulars Page no.

1. Abstract 2
2. Introduction 2
3. Environmental Law 3
4. Automotive Industry 5
5. Dieselgate 6
6. Astongate 6
7. Consequences 7
8. Sustainability 7
9. Conclusion 8
10. Bibliography 9

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 ABSTRACT

The concept that is to be covered is Environmental Law from the point of view of
Automobile Industry and how some incidents from the past have impacted our environment
over the course of time. The report also talks about the consequences of the said incidents
that occurred and the ways to improve the environmental situation for a better sustainable
future.

Overall, this study shows us that it is quite necessary for us humans to take intensive efforts
to help each other revive from this situation we have created for ourselves over the past few
decades in the name of ‘improved technology’.
Also, it is crucial understanding the intensity of the situation about the environment at present
and how it will deteriorate in the future, if proper measures are not taken immediately in
respect to the pollution being caused, global warming, etc. which are already leading to
various health issues in humans as well as animals that solely depend on the nature..

INTRODUCTION

This is a study of one of the greatest scandals in the automobile industry the world has
witnessed, ’Dieselgate Scandal’ of the Volkswagen Group. There is another situation similar
to this that happened, known as Astongate.
There are many other well-known car manufacturers that have come in the picture that have
faced similar chaos regarding NO2 emissions causing damage to the environment. The
companies that have been found to bend the rules regarding CO2 emissions are as follows:
- Nissan
- Renault
- Mercedes-Benz, etc.

We will also talk about ‘greenwashing’ and how it is related to automobile industry as well as
environmental law. This term was first used by hotel industry in 1960s, when the customers
were requested to reuse the towels provided to them in the rooms, reducing the cost of
laundry for the hotels overall.

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 ENVIRONMENTAL LAW

In the simplest terms, Environmental Law are the set of rules, regulations and penalties
created to protect the environment and ecosystem to promote sustainability without damaging
the nature. This law is enforced, firstly, to keep the increasing pollution in control, encourage
afforestation, also protect the flora and fauna from unnatural damage caused by human
activities like excessive deforestation to create spaces from building concreate jungles, all
types of pollution we cause knowingly and unknowingly.(Vierah Hulley)

All aspects of the ecosystem are covered to protect through this law, the flora, the fauna,
aquatic animals, the fossil fuels, pollution control, etc. No part of the ecosystem is left
unprotected because of this law. Even though the law differs geographically, the motive
behind it remains the same all over the world.
Still there are several organisations and individuals that have broken, bend or tried to find
loopholes in the law to get their things done via unsustainable means, all in all harming our
precious environment.

The International Environmental Law is quite new though has three phases before it was
universally accepted: (1) ‘the traditional era’ this is before the United Nations Stockholm
Conference on the Human Environment 1972, (2)’modern era’ indicates the time from the
Stockholm Conference to the United Nations Conference on Environment and Development
in Rio de Janeiro in 1992 and (3)’post-modern era’ display the advancements that took place
since the Rio de Janeiro Conference in 1992 to the present date.

“Environment Justice refers to the just treatment and meaningful participation of everyone in
formulating, formulating, implementing and enforcing environmental laws, principles and
policies, regardless of race, skin tone, nationality or income.” (Vierah Hulley). This entails
that no one is an exception or would be spared for causing damage to the environment. The
policies and regulations are enforced at 2 different levels, national, state as well as local.

There are varied points that are covered under the Environmental Laws, such as:
- Resource Management
- Environmental Remediation Laws
- Mineral Resources
- Pollution control
- Economic Instruments to name some. (Vierah Hulley)

All aspects of the ecosystem and how they are to be protect and utilized carefully and
sustainably is all mentioned in these laws like mining, waste disposal, wildlife hunting,
fishing and all these precautions and rules differ from region to region. (Vierah Hulley).

The principle that is at the point of importance in this study regarding the automobile industry
could be “The Polluter pays Principle”(Vierah Hulley). From what I understand, we cannot
eradicate pollution completely, but we can control and try to reverse the damage caused over
the years. Therefore, it is only right for the polluter to pay for the environmental damages and
harms caused by them during their operational tasks like manufacturing, consumption,
distribution and so on.

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In the article by Harjyoti Jhall, that stated the effects and changes on the environmental laws
and automobile industry post- Brexit in the UK. Also, certain laws and policies that are
already applicable in the UK, these are mentioned below:

1. REACH Restrictions (1907/2006)

2. Noise Reduction Regulations (540/2014)

Some other EU Directives effectuated in the UK:

1. Type-approval Directive (2018/858)

2. Car Labelling Directive (1999/94/EC)
3. Renewable Energy Directive (2009/28/EC)
4. Air Quality Directive (2008/50/EC)
5. Waste Framework Directive (2008/98/EC)

Environmental Laws:

 Climate Change Act 2008, this aims to curb the greenhouse gas emissions by 80% by
the year 2050 with the base comparison levels of the year 1990.

 The UK is set to stop the sales of petrol and diesel vehicles by 2040 to control air
pollution by increasing the usage of zero emission vehicles.

Impact on Automotive Industry post-Brexit:

As it is known, the EU and the UK are automotive trading partners with 53% of UK vehicle
exports and 94.1% commercial vehicles are exported to the EU. (Harjyoti Jhall,2018)
With will be crucial for the UK to conduct proper check and tests according to the EU
standards before the exports of the vehicles and comply to the EU environmental laws for the
trades to be successful.

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 AUTOMOTIVE INDUSTRY

The Automobile industry has grown from nothing to the most valuable source of revenue in
the revenue ecosystem today. The automotive manufacturing industry in 2020 generated
around 2.5 trillion US dollars, followed by 2.7 trillion US dollars in 2021 and is estimated to
reach 2.8 trillion US dollars in the current year 2022 globally.

The term ‘Greenwashing’ basically means publishing false information to show the
company’s products and services are environment- friendly and sustainable. This is just
another marketing tactic to attract more customers towards the company’s products as it
displays Corporate Social Responsibility.
As people are becoming more and more conscious about save environment, use of this term
makes it easier to convince people for the cause.
This is what Volkswagen did when they released their emissions report and showed normal
rate of emissions by using the software to cover the actual results with environment- friendly
results.

The transport sector contributes to around 1/5th of the overall NO2 emissions. Out of this road
transport accounts to the most NO2 emissions as compared to aviation, ships and rail.

NO2 emissions in 2018

Private vehicles Trucks & Lorries Aviation

Ships Rail Other

As we observe the diagram above, we can see that about 45.1% is the contribution of private
vehicles to NO2 emissions and 29.4% by transport trucks and lorries globally.

Hence, it would be completely unethical and irresponsible on the car manufacturing

companies part to falsify the emission results in order to increase sales of the vehicles that
would finally be damaging the environment. At the end, there is no good coming out of such
situations to the public and the ecosystem, other than the profit the companies earn through
these sales.

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 DIESELGATE

This scandal, also known as Emissionsgate, occurred in the year 2015 when it was found that
some of the Volkswagen, Porsche as well as Audi cars were fitted with ‘defeat devices’ (BBC
news stated) which indeed was responsible for showing incorrect NO2 emission test result,
all in all breaking the emission rules.

“the car giant  Volkswagen, who has admitted to cheating emissions tests by fitting various
vehicles with a “defeat” device — a proprietary software that could detect when it was
undergoing an emissions testing, altering the performance to reduce the emissions level, all
while touting the low-emissions features of its vehicles through marketing campaigns. In
truth, however, these engines were emitting up to 40x the allowed limit for nitrogen oxide
pollutants.” (Leyla Acaroglu)

So basically, it was observed company had installed a software in the car while
manufacturing that evidently tampered with the NO2 emissions during the pollution tests.
The software was programmed in such a way that it would drastically decrease the emissions
and not disclose the actual results which were way too high than the normal limit.
In India, the Indian Foundation of Transport, Research and Training (IFTRT) organised an
analysis regarding this issue with the EA 189 engine series and in the final report it was
stated the defeat device cannot be called a product failure but was a tool used for cheating,
misinformation and greenwashing.

“During normal operation, the vehicles emitted nitrogen oxides (NOx) at levels of up to 40
times the standard.”( Itai Ater & Nir S. Yoseph)

And some of the senior employees knew about the scandal to help avoid drastic fall in the
sales number. Over 10 million of such cars were sold over the globe that contributed to the
violation of the environmental law by deceiving the emissions tests.

ASTONGATE

Similarly, like Dieselgate an incident took place with regards to Aston Martin in 2020. It was
mainly related to Electric Cars in curb or end the usage of combustion engine cars in the
coming years.
It was observed that they implemented greenwashing tactics. They used misinformation to
cover up the scandal that helped them limit the emissions from combustion engines by
approximately 50%.

Many controversies have come to light with regards to the energy consumption by the
Electric vehicles so to say. The analysis of this study displayed a comparison between a
petrol- driven vehicle ( Volvo XC40) and an electric car (Polestar 2) with emissions of CO2
being 14 tonnes and 24 tonnes respectively. This evidently showed the application of
greenwashing strategies by Aston Martin.

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 CONSEQUENCES

Considering the environment is not improving for the better, the forests are not getting any
greener and the automobile industry being one of the active contributors in causing pollution,
they will try to attract as many customers to buy their products no matter what even if this
means using misleading marketing tricks like greenwashing.

Also, this emissions with the addition of NOx caused acid rains, visible harmful brown
clouds as well as smog, also this can be responsible to cause health issues like asthma,
bronchitis and heart problems, etc.

In August 2015, Volkswagen group decided to admit their fault. It was revealed that about 11
million cars were a part of this scandal. The company also recalled certain number of the cars
to fix the defect devices as the company said.

“The former senior employee charged on Thursday is accused of having initiated the
development of engines for Audi, VW and Porsche vehicles equipped with so-called "defeat
devices", engine software that masked emissions levels.” (BBC News,2020)

Hence, it is clear that a few senior employees in these companies were aware about the
scandal they were about to cause with the so-called defect engine and the software installed
within.
The sales of these car without questionable engines were up to 11 million globally and
around 1.2 million in the UK. This scandal also resulted in some of the senior employees to
resign from their positions like the Chief Executive of the group said an article. (BBC News.
2020).

The company Volkswagen had to pay over 30 billion euros as fines, legal fees and certain
compensations. And the final settlements cost them 750 million euros to 235,000 customers.

SUSTAINABLITY (EV and Hybrid alternatives)

In the past 3 years from 2020 to present year 2022 due to Covid-19, we have seen a huge
improvement in the environment, specifically the Ozone layer as there were not many
vehicles on the street as compared to how it was before the pandemic.
One better approach towards sustainability is encouraging people to move from petrol and
diesel driven cars to EV cars. EV cars are just getting launched in the market and seems that
they are the future of automobile industry. Luxury car manufacturers like Tesla, Audi,
Porsche, BMW and many more, are trying to get into this new upcoming technology that
looks like the future of the Automotive industry.

Another alternative that should be considered by car manufacturers is sustainable, greener

ways of car production.

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 CONCLUSION

Post the Dieselgate incident Volkswagen put forth a statement saying that further they will be
prioritising the 3 things they are known for which is, “Vehicle excellence. Substance.
Attention to detail”.
All in all, the automotive industry needs to be more transparent about its products and
services for the overall betterment of the company’s image, the society as well as the
environment.

Also, after experiencing such incidents, total 27 EU member states came up with a solution
for emissions testing saying random emissions tests on the roads and if the vehicles showed
overwhelming results or any rules were broken, the companies would be fined for the same.

As a conclusion, after completing this study about Environmental Law and Automobile
Industry, I observed that organizations and individuals will keep violating the rules and
regulations put forth to help them to grow and develop sustainably in the coming future.

“At the  Climate Action Summit in September 2019, 65 countries and major sub-national
economies, such as California, committed to cut greenhouse gas emissions to net zero by
2050, while 70 countries announced they will either boost their national action plans by
2020, or have started the process of doing so.”

Right now, we can expect to see a change, hopefully an improvement in the ecosystem
caused by the greenhouse gas, fossil fuel emissions, CO2/ NOx emissions over the past few
decades even though some articles and studies contradict these facts.

“In Energy Technology Perspectives report, the International Energy Agency (IEA) expects

global transport (measured in passenger-kilometers) to double, car ownership rates to
increase by 60%, and demand for passenger and freight aviation to triple by
2070.2  Combined, these factors would result in a large increase in transport
emissions.”(Hannah Ritchie)

There will always be someone (organisations, individuals, etc.) trying to find loopholes in
these laws that pose threat to the environment, flora & fauna. Other than strict actions against
them, I don’t see an option that could encourage them to stop all together.

In my opinion, we are at a point where every individual needs to take responsibility of their
actions and start taking steps towards more sustainability on personal levels that would
eventually add up to a bigger and better impact on our planet earth.

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