How should VW make up for the environmental damage caused by its cheating?

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Option 1 – Fines: Penalties and sanctions may hurt the company and they have the potential to avoid more cheating in the future, but they won’t be able to compensate for the damage already done. Even their suitability to discourage future misbehavior can be doubted. Not only because they put pressure on the company to somehow still deliver the results its shareholders expect, but also because fining an employer often means relieving employees from individual accountability and liability. 1

Option 2 – Recalling and fixing every affected car: Like penalties, this option inflicts financial damage on VW while doing little to make up for the damage already done. Each recalled car would marginally reduce the total future negative environmental impact but would at the same time externalize the cost of VW’s malpractice to the owners of the troubled cars. That’s also the reason why it’s really unlike to get a significant number of cars outfitted with any fix.

Option 3 – Burden VW with an environmental liability. And offer a way to pay actually pay it off: Weiterlesen »

  1. Whether or not individuals should be liable for actions taken in their roles as employees shall not be discussed in this article. Currently very few employees face criminal or civil charges due to non-compliance in their job, especially in high-profile cases.