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US EPA Accuses Fiat Chrysler of Excess Diesel Emissions (yahoo.com)
The U.S. Environmental Protection Agency on Thursday accused Fiat Chrysler Automobiles NV of illegally using hidden software to allow excess diesel emissions to go undetected, the result of a probe that stemmed from regulators' investigation of rival Volkswagen AG. From a report: FCA shares plummeted as the maximum fine is about $4.6 billion. The EPA action affects 104,000 U.S. trucks and SUVs sold since 2014, about one-sixth the vehicles in the Volkswagen case. The EPA and California Air Resources Board told Fiat Chrysler it believes its undeclared auxiliary emissions control software allowed vehicles to generate excess pollution in violation of the law. Fiat Chrysler Chief Executive Sergio Marchionne angrily rejected the allegations at a hastily-assembled conference call with reporters, saying there was no wrongdoing and the company never attempted to create software to cheat emissions rules by detecting when the vehicle was in test mode.
California reached a nexus point on this issue in the 1990s. See, emissions testing is cost-effective only if a significant fraction of the vehicles are in violation. If a smog test costs $40, and 10% of the cars are failing, then it's costing the economy $400 to detect each non-compliant car. If the excess pollution the car was putting out costs the economy (say) $1000, then testing is a cost-effective way to get these polluting cars fixed or off the road.
But what if the program is successful and compliance rates increases to 99%? Then you're spending $4000 to detect each non-compliant car, and the cost to detect these polluting cars exceeds the damage they do. That's the situation California found itself in in the 1990s.
The companies which made emissions testing equipment came up with a radical suggestion. Get rid of the annual smog tests. Instead, mount emissions detecting equipment at areas where cars normally slow down to pass. Freeway off-ramps, intersections, etc. The equipment would constantly detect emissions, and when it saw a spike in emissions it would snap a photo of the offending car(s). If the same car's plates showed up in multiple photos, you could send that registered owner a fix-it ticket requiring they bring the car in for testing. This way you're not wasting time or money dealing with the 99% of cars which are in compliance, and only spending extra money testing the 1% of cars which are probably in violation.
Unfortunately by the 1990s, smog testing in California had grown into a billion dollar industry. The service stations and smog test stations lobbied hard in Sacramento to kill this idea. They won, and so we still require smog tests today even though the vast majority of cars pass. It's worth nothing that an on-road emissions detection system would've caught the violating VWs nearly a decade ago when they first started cheating.