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A notice of violation of the Clean Air was issued to Volkswagen Group by the U.S.
Environmental Protection Agency (EPA) in 2015. Volkswagen was revealed to have intentionally
programmed a “defeat device” in approximately 11 million of its 2.0-liter diesel vehicles.
On-road NOx emission tests of Volkswagen models conducted during 2014 revealed that
average emissions actually exceeded NOx emission levels by nearly 40 times the U.S.
federal limit. As part of a settlement agreement, Volkswagen accepted the $14.9 billion
penalty after acknowledging that it installed devices on diesel motors to make them
appear to meet strict emissions standards when in reality they did not. Following
a guideline of eligible mitigation actions set by the U.S. Environmental Protection
Agency, each state must submit their own beneficiary mitigation plan which will include
projects aimed at reducing NOx and other pollutant emissions in the transportation
sector. States can fund projects and develop programs that align their interests,
within the boundaries set through the settlement. Those boundaries involve replacing
older diesel equipment or vehicles with new models that emit less pollution. The replacement
vehicles can use a variety of fuels including diesel, electricity, natural gas and
propane. A portion of the settlement would set aside $2.9 billion for an environmental
mitigation trust where states can receive an allocation as beneficiaries. The size
of these allocations is based on the number of violating vehicles registered within
their jurisdiction. Although considerable research has been devoted to the allocation
fund of California (about 423 million) in EPA Region 9, less attention has been paid
to EPA Region 4, which ranks second in funding allocations and includes 7 states.
These states are North Carolina, Kentucky, Georgia, South Carolina, Florida, Alabama,
Tennessee and Mississippi. Through model building examining cost effectiveness and
semi-structured interviews with government planning officials, this study addresses
this research gap by quantifying and comparing the environmental benefits generated
by investing the Volkswagen Mitigation Trust Fund in different programs included in
the Proposed Beneficiary Mitigation Plans submitted to date within EPA Region 4. Results
show the differences in pollutant reduction cost effectiveness for different fuels
(Electricity, Diesel, or Compressed Natural Gas) and vehicle uses (Transit or School).
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