Welcome to Technology Policy Week 1: The VW scandal

Well I tried to think of other ‘simpler’ introductory topics, of which there are many, but the elephant in the room is the current VW scandal.  In the end, we just had to have this as our first blog.  The scandal brings in a range of subjects that are central to the study of technology policy: measurement and the use of evidence in regulation; the role of the multinational; the ways in which regulations and tax regimes have shaped the current role of diesel in different countries and implications of the scandal for the future of diesel cars and for climate change and local pollutants; the incentives that regulators will have created for companies like VW to behave badly, and finally, business and engineering ethics.

To start, please look through some background material such as the excellent intro in the New York Times or the BBC’s effort, which include a nice short video on emissions testing.

Wired claims that hybrid cars will be the winner from the scandal and Elon Musk, of course, believes this demonstrates the limits of petroleum, whereas most analysts point to gasoline as the winner in the near term, for example, the French Government is considering backtracking on its longstanding support for diesel and equalising diesel and petrol prices.  More generally the need for VW’s cheating in the first place points to the underlying challenge of clean diesel.  Resources for the Future summarises some of their excellent work in this area going back many years including why Europe opted for diesel in the first place.

An undercurrent has been the fact that as a ‘German’ company, VW is not just causing trouble for its shareholders who has suffered massive losses or its CEO, which has been fired, but for Germany’s credibility and international reputation.  Chancellor Merkel and others have asserted that the VW scandal has no long term implication’s for Germany’s reputation for engineering excellence among other things.  But is is really true that “The issue is a software setting, not an engineering issue, so German engineering is safe“?!

From the images of billowing swastikas and eroding a national and corporate reputation built up over 70 years is only a short leap to questions of ethics. On Ethics, IEEE Spectrum has a nice thoughtful piece, while the opening of The Conversation essentially blames the ‘endemic’ unethical culture in all of business as responsible for this (and all other manner of ill I presume!). One of the commentators, Yotam Lurie, blamed VW software engineers for having “overlooked and neglected their fiduciary responsibility as professionals […] who have a semi-regulatory responsibility within the organization to ensure safety”  Even if it is true, should the CEO Of VW America blame ‘a couple of software engineers’?

At a more ‘technical’ level, the scandal draws attention to a regulatory regime in the US, EU and EU member states that often preferred not to ask the right questions or to find out what was actually happening.  Consumer activists and academics have long questioned the reliability of existing regulatory systems on both sides of the Atlantic.  In 1997, Tom Hubbard described some (of the many) reasons why inspections and maintenance regimes had ‘failed’, i.e. not delivered low cost emissions reductions.  Perhaps this was a question of industry lobbying or speaks to bureaucracies that simply prefer ‘simpler’ regulation that relies on industry to certify itself.  Carlos Bastasin at the Brookings Institution takes a more expansive view and offers a perspective on what the VW scandal says about the state of European regulation and Europe more widely.

One danger of a subject as topical as the VW scandal is that you have to wade through endless news stories, blogs by ‘leadership consultants’ and those who are using this scandal as an excuse to flog their worldview and preferred solutions that are often only tangentially related to the content of the issue at hand. So please do beware!

Feel free to comment on any aspect of the scandal, but a few concluding questions:

  1. Has the VW scandal changed your view of German industry or Germany’s role in the world?
  2. What is the role for computer simulation and modeling in regulation of emissions?
  3. If a few rogue engineers were found to be entirely responsible for deciding to proceed with this plan, would this paint VW management in a better light?
  4. Which of the many potential impacts or implications of the VW scandal do you think will have the greatest longer term impact?

p.s. several sites such as Foreign Affairs, FT, etc may ask you to register to read the full article.  In other cases you may need to be signed in to university resources to access the campus-wide subscriptions.