This week in AP Government we have been studying interest groups. Our focus, of course, has been interest groups in the U.S. (and there are a multitude to study- America was made for interest groups) but our country does not have a monopoly on them.
A couple months ago Volkswagen, the biggest carmaker in Europe, admitted they had skewed the nitrogen oxide emissions tests. The company had inserted software into some of their diesel vehicles that showed emissions that were far less in the lab than they were in reality. To add to this debacle, on Tuesday Nov. 3 Volkswagen announced that they have also been dishonest about the amount of carbon dioxide emitted, as well as fuel consumption levels. This is significant to every country that has approved the sale of Volkswagen vehicles, but it has an even bigger impact in Europe where there are fines given for excessive fuel consumption and CO2 emissions. The total costs of this scandal could be up to $38 billion in those fines, as well as lawsuits and vehicle refits.
The Institutional Investors Group on Climate Change (IIGCC), an interest group which represents 118 European investors, published an open letter on Nov. 6 requesting to the European Union that it make the vehicle tests more rigorous. It also asked that they would either require each nation to carry out random, on-the-road tests, or to establish an EU authority to regulate the compliance with the EU standards. Many of the investors the IIGCC represents are shareholders in VW, whose shares have decreased 40% in value since before the big reveal in September. This drop in the share's value represents a loss of billions of euros to shareholders.
The IIGCC is a european interest group, one that would be classified as an institutional interest group. This means that it represents not individual members, but rather a set of related groups. In this case, those groups are shareholders, and shareholders who have lost a substantial amount of money due to the shortcomings of Europe's largest vehicle producer.
I like to imagine interest groups as a protective big brother. When the little siblings are threatened, the big brother steps in and take care of the situation, but not by beating up the perpetrator. Instead, he tells on them to his dad, and he is the one who really gets things done.
So some of the IIGCC's plethora of little siblings complained about their plummeting Volkswagen shares, and the IIGCC told on VW to their "dad"- the European Union.
There are several ways for interest groups to influence or "tattle" to get attention from the government. Some strategies include providing specific, exclusive information, motivating individuals to contact officials, donating money, and even organizing displays of civil disobedience. In this case the IIGCC wrote an open letter to the EU, and with the huge amount of money at stake, it is sure to be paid attention to.
It is too soon to say if the EU will heed all of the requests set forth in the letter. On Thursday the 5th the EU did send out a letter to each nation asking them to become more broad in their investigations into the possible fraudulent emissions levels. This is a fine balance for the EU, as it is in most cases of this scale, due to the fact that national policy is heavily influenced by car manufacturers' own interest groups. We have studied in class that in the U.S., legislators and other government officials oftentimes will act according to their own thoughts and values, rather than what interest groups desire of them. However, that doesn't mean that interest groups cannot make an impact. We will simply have to wait and see if the IIGCC will be able to prompt some action from the European Union, or if the car manufacturers will win in this battle between the interest groups.
Click here for an article concerning the IIGCC requests:
http://www.cnbc.com/2015/11/06/big-investors-seek-tougher-rules-on-car-emission-testing.html
Click here for an article with some additional information:
http://www.nbcnews.com/business/autos/vw-pay-extra-taxes-owed-because-it-understated-co2-emissions-n458851
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