Report: 21st Century Transportation

From Deceit to Transformation

How States Can Leverage Volkswagen Settlement Funds to Accelerate Progress to a Clean Transportation System
Released by: U.S. PIRG Education Fund

Volkswagen (VW) perpetuated a fraud on the American people, deceiving consumers into believing that they were getting the best possible combination of performance and sustainability. But VW’s promises were nothing more than lies that significantly harmed our collective health and the health of our environment. As a result of the settlements that followed this fraud, an Environmental Mitigation Trust (EMT) was set up with $2.9 billion dollars to be distributed to states to reduce transportation emissions. In effect, VW’s deceit now represents an historic opportunity to drastically reduce harmful pollution that makes us sick and destroys our planet, while also providing an essential down payment toward the transition to a clean and modern 21st century transportation system.

This future, however, is not assured.

There remains a real risk that these funds will be wasted on outdated and polluting technologies, including those that rely on diesel and natural gas, while foregoing the transition to clean, all-electric vehicles (EVs) and supporting infrastructure. Indeed, of the numerous possible uses outlined in the VW settlement, many allow for the replacement of older, dirty diesel technology with new, still dirty, diesel technology, compressed natural gas (CNG) or diesel-electric hybrids.

Relative to all-electric vehicles, diesel and natural gas produce significantly more tailpipe nitrogen oxides (NOx) and greenhouse gas (GHG) emissions as well as more total emissions over their lifecycle. In fact, in 2012, the International Agency for Research on Cancer classified diesel engine exhaust as carcinogenic to humans based on evidence that exposure increased the risk for lung cancer, highlighting the importance of transitioning away from diesel, in particular.

Accordingly, investing in diesel and natural gas technologies with VW settlement funds would represent a significant missed opportunity to accelerate the transformation to an all-electric, clean running transportation network that could help reduce illness, save lives and protect the planet. The VW settlement clearly envisions and encourages such a use. For instance, the EMT can be used to subsidize 100 percent of the purchase of clean, all-electric buses and accompanying charging infrastructure for use in public transit agencies throughout the country. Similarly, up to 15 percent of each state’s VW EMT funds may also be invested in the acquisition, installation, operation and maintenance of electric vehicle charging infrastructure, including along the states’ highways. Placing these publicly available charging stations on government owned property would allow the state to take advantage of the 100 percent subsidy provided under the VW settlements, while reducing key impediments to the transition to an all-electric vehicle fleet.

Given the structure of the VW settlements and the available uses of the funds, the overwhelming need to reduce harmful emissions that make us sick and destroy the planet, along with the opportunity to accelerate a market transformation toward an electrified transportation system, this report recommends the maximum allowable amount (15 percent) be invested in fast charging electric vehicle infrastructure and the remaining amount (85 percent) be spent on new, all-electric transit buses to replace older, outdated diesel buses.

Ensuring that the funds are used in this way has several distinct benefits including, but not limited to:

  • Drastically reducing NOx, ground-level ozone (smog) and particulate matter to protect our health and environment;

  • Significantly reducing carbon dioxide (CO2)  and other greenhouse gas emissions;

  • Reducing long-term fuel consumption, maintenance and operating costs of public fleet vehicles;

  • Adding needed stability to the price of energy inputs for vehicles; and

  • Increasing public awareness and adoption of electric vehicles as cleaner alternatives to traditional gas-powered vehicles.

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