The Volkswagen emissions scandal looks like becoming the car
industry equivalent of the Libor and Forex scandals in banking. According to European campaign group Transport and Environment,
cheating on emissions tests is widespread across the car industry and applies
to both petrol and diesel engines. The
group claim that there is as much as a 40 percent gap between the emissions
during testing and emissions under real road conditions.
At face value, the Volkswagen scandal appears to be just
another example in a tediously long list of psychopathic corporations putting
short-term profit ahead of long term sustainability. Indeed, in Volkswagen’s case, there may not
be a long-term now that sales are plummeting, record fines are anticipated, and
investors seek alternative investments.
When we discover – sadly unsurprisingly – that other car companies have
also been fiddling their emissions data, we may simply assume some undocumented
cartel-like behaviour in which everyone involved turned a blind eye.
There may, however, be a darker story here. Why would a trusted company that has led the
world in engineering risk everything on a short-term gamble to fiddle the
data? The stock answer is “profits”. But this doesn’t stack up. German companies have a track record of
investing for the long-term. They tend
not to suffer the British disease of having to put the immediate gains for
shareholders and bankers ahead of the long-term development of their
companies. So what else might be going
on here? An alternative answer is “diminishing
returns”.
In the late 1970s and early 80s, the internal combustion
engine was under threat from two directions.
First, and most painfully, the oil shocks in the 1970s had demonstrated
just how vulnerable western countries were to any future shortage of oil on
international export markets. Second, a
growing environmental lobby was raising concern about the damage to the
atmosphere caused by millions of cars belching out carbon dioxide and other
noxious emissions. With millions of jobs
worldwide dependent upon the car industry and the oil industry that feeds it,
these concerns threatened a major economic upheaval.
The absence of an electric car with anything like the
performance of petrol or diesel cars undoubtedly saved the internal combustion
engine. Moreover, with the temporary
glut of oil coming out of the newly profitable North Sea fields, the crisis
seemed less urgent. But the car industry
did not emerge totally unscathed. In a
concession to detractors, the industry had promised that they could cut
emissions and improve the fuel efficiency of their cars.
Initial technical improvements to engine design, improved exhaust
systems and the use of catalytic converters were simply lying around waiting
for someone to deploy them – they had simply been ignored back in the days when
performance was considered to be the prime aim of car engineering. The problem was that environmental and fuel
concerns did not go away or even stand still.
The price of fuel continued to rise even as awareness of man-made
climate change was spreading. Having
made the initial easy gains, the car industry was obliged to deploy growing teams
of scientists and engineers to continually improve fuel efficiency and lower
emissions.
As with all such processes, having made the initial gains,
each new small increment came at an increasing cost. More scientists and engineers were needed to
work on the problems, while solutions came with an increasingly steep price
tag. Eventually they were doomed to
reach a point beyond which improvements would render the vehicles unprofitable.
Of course, both the governments responsible for the
emissions tests and the manufacturers themselves had vested interests in
maintaining the illusion of progress.
Indeed, since the crash of 2008, exports are one of the few areas where
GDP growth can be generated; and cars make up a large proportion of
exports. So both governments, struggling
with balance of payments deficits, and manufacturers desperate to maintain
market share, were willing to allow lax testing and inflated results. That they would get caught out in the end was
certain. But as with all things economic
in the current depression, kicking the can down the road has become the only
workable approach. Volkswagen
undoubtedly hoped that someone else would be caught out first. However, it appears to have been the
high-tech manner in which they fiddled the figures that has singled them out
for particular disapproval. Where other
companies have deployed low-tech cheats like sloping the test bed, ensuring
batteries are fully charged, and smoothing and hardening the tyres, Volkswagen
deployed their software engineers to create an algorithm that could sense when
their vehicles were being tested.
The deeper issue here is not that companies cheat or that
even world-leading Germany appears to have moved into short-termism. The real problem is with our understanding of
progress itself.
Progress has been the religion of the West since the Second
World War. In those heady days we told
ourselves that through the white heat of technology, our road to the stars had
been mapped out. There is, we were
assured, no problem that science cannot solve, no technology that our engineers
cannot create. . In the real world, our economic wellbeing has
been falling like a rock. Middle class families
that could once operate comfortably on the income of a single (usually male) earner
now struggle to get by with both partners working; and often only then by accumulating
mountains of debt based on the illusion that their house earns more than they
do. Working class families do not even
enjoy this standard of living, finding that even with both partners working it
is impossible to buy their own home. For
several decades now our road to the stars has appeared only in Hollywood’s CGI
fantasies.
In truth, the story of human “progress”, like the Volkswagen
story, is a tale of diminishing returns.
In every field of human endeavour we find the same story. Initially, great discoveries and inventions
could be made by lone scientists and engineers given enough time to retreat to
their laboratories and think… something that did not happen too often prior to
the industrial age. Given sufficient
time, a Newton could figure out the movement of the planets while a Darwin
could put together the basics of evolution.
Throughout the nineteenth century, great discoveries and inventions
could be made by single (mostly) men who enjoyed enough spare time. But by the twentieth century, fewer
inventions and discoveries were made by lone individuals. More often, small research teams were required to make real
breakthroughs. In the modern – internet enabled
– world, thousands of scientists and engineers in teams spread around the
planet are employed to make incremental advances in our understanding and our
technology.
Medical writer and doctor, Ben
Goldacre has made this point well in relation to medicine. He argues that most of the genuinely new
medical breakthroughs came in the years between 1929 – with the synthesis of
insulin – and 1969 – with the first transplant surgery. Since then, we have added detail to what we
already knew, and we have engineered improvements to technologies we already
have. But – and this is the point –
despite vastly more scientists engaged and exponentially more money deployed,
we have made very few genuine breakthroughs.
Physicist Tom
Murphy has made the same point in relation to technology more generally:
“[Today] the big deals are: the
computer revolution, the internet, mobile phones, GPS navigation, and surely
some medical innovations. But I would characterize these as substantial
refinements in pre-existing gizmos. It’s more an era of hard work than of
inspiration. I’m not discounting the transformative influence of the internet
and other such refinements, but instead pointing out that the fundamental
technological underpinnings—the big breakthroughs— were in place already.
Murphy asks us to imagine what it would be like to be
transported from the world of 1885 to the world of 1950. What would have been new and not
understood? The list includes cars/trucks,
airplanes, helicopters, and rockets; radio, and television (but not, just, the
telephone); toasters, blenders, and electric ranges; radar, nuclear fission,
and atomic bombs. What would it be like
if we were transported from the 1950’s into the present?
“Most things our eyes land on
will be pretty well understood. The big differences are cell phones (which they
will understand to be a sort of telephone, albeit with no cord and capable of
sending telegram-like communications, but still figuring that it works via
radio waves rather than magic), computers (which they will see as interactive
televisions), and GPS navigation (okay: that one’s thought to be magic even by
today’s folk). They will no doubt be impressed with miniaturization as an
evolutionary spectacle, but will tend to have a context for the functional
capabilities of our gizmos.”
What about the technologies that we have been promised will solve
our most dangerous and conflicting problems – energy insecurity and climate
change?
“Solar, wind, hydro/tidal,
geothermal, nuclear fission (including thorium), wave, biofuels, fuel cells,
etc.: all were demonstrated technologies before I was born. Where are the new
faces? It’s not as if we have lacked motivation. Energy crises are not unknown
to us, and there have been times of intense interest, effort, and research in
my lifetime. Tellingly, the biggest energy innovation in my time is enhanced
recovery techniques for fossil fuels: perhaps not the most promising path to
the future.”
This brings us back to the Volkswagen scandal, because of
its part in the fight against climate change and energy shortages. What it tells us is that we cannot escape the
process of diminishing returns. For a
while, at an increasing cost in resources, energy, capital and labour, we can
enjoy some incremental improvements. But
ultimately we reach the point of denial – the point where the only thing left
to us is cheating and fiddling the figures.
But when it comes to curbing carbon emissions and deploying clean energy
generation, cheating will not do. Quite
simply, if humanity has a future, the lesson here is that we need to invest far
more than is currently the case if we are to have even the remotest chance of
coming up with a game-changing new technology.
The alternative is that, sooner or later – and probably
sooner – much of what we take for granted in our western lifestyle –
private motoring, constant electricity, affordable heating, abundant drinking
water, free medical care and education, and much more – is going to disappear.
We can cheat for a while – as governments have been doing
with their GDP figures, and oil companies have been doing with their reserves –
and we can hide in a CGI-generated fog of denial – as we have been doing with
climate change. But we are fast coming
up against limits that will not be ignored – we might be able to defy gravity
and thermodynamics in a Hollywood movie; but in the real world these hard
physical laws result in collapse and decay.
