Adam Smith Institute

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Emissions testing fakery hasn't cost drivers €150 billion, nonsense

That the car manufacturers have been, to put it most delicately, specially preparing cars that go through the emissions tests is true. It is possible, but by no means certain, that this has cost drivers some amount of money. That the number is €150 billion is definitively untrue:

Drivers in Europe have paid €150bn more on fuel than they would have if their vehicles had performed as well on-the-road as in official laboratory-based tests, according to a new report.

Car companies have legally gamed official tests of fuel economy for many years by, for example, using very hard tyres during tests or taking out equipment to make cars lighter. The gap between test and actual performance has soared from 9% in 2000 to 42% today.

Analysts at research and campaign group Transport & Environment have now calculated that this difference cost motorists in Europe €150bn (£136bn) in extra fuel between 2000 and 2017. UK drivers paid €3.5bn more in 2017 alone, and a total of €24bn since 2000.

Consider the specific problem with diesel. It is possible to make a low NoX emissions diesel with good mpg, which is expensive. It is possible to make a good mpg cheap diesel which has higher NoX emissions. What is not available - physics - is a low NoX, high mpg, low cost, diesel. 

We're thus in swings and roundabouts territory, costs and benefits. Meeting the varied EU emissions tests costs money. So too with mileage. It may well be that consumers have paid more for more fuel. But how much less have they paid for cheaper engines, cheaper cars?  

If there are c. 15 million new car registrations a year, worth €20,000 each, then the market is €300 billion a year. Over 20 years, give or take, those emissions dodging cars only have to be 2.5% cheaper for it to be a wash for the consumer. And if it's 3% cheaper then they're gaining. Note that we're not insisting those numbers are correct, only ballpark for logical purposes.

In fact, we'd rather like to know exactly what those relative costs are, the size of the market, for that's the manner in which we can work out whether those mpg and emissions standards are actually worth it. Do they cost consumers more, in capital costs, than the fuel savings? Interesting question, no? What is gained on the swings of lower fuel consumption is lost on the roundabouts of higher purchase costs?