THE VW SETTLEMENT HANDBOOK: Overview, Timeline, and Actions

THE VW SETTLEMENT HANDBOOK: Overview, Timeline, and Actions

Table of Contents: What is the VW Settlement?... 2 Why Do We Care About NOx and Transportation?... 3 The Environmental Mitigation Trust... 4 Table 1 Initial Environmental Mitigation Trust Fund Allocation... 6 1

What is the VW Settlement? For nearly 500,000 model 2009 2016 motor vehicles, Volkswagen knowingly incorporated cheating computer systems that run emissions controls during testing, but do not run during normal vehicle operation. 1 In 2014, an independent research study conducted by West Virginia University revealed that the emissions from Volkswagen cars were 15 40 times above the U.S. EPA compliance level. 2 In September 2015, the U.S. EPA filed a complaint against Volkswagen, 3 with other parties soon following suit. In order to settle the allegations of cheating emissions, Volkswagen agreed to spend up to $14.7 billion for remediation of NOx emissions. A majority of this money is going to vehicle buyback and modification programs ($10.03 billion), which directly relate to affected consumers. Consumers had until September 18 th, 2016 to identify as an eligible owner and therefore qualify for the vehicle buyback/modifications programs. $4.7 billion of this settlement money is going towards NOx reduction programs: The Environmental Mitigation Trust ($2.7 billion) and the ZEV Investment Commitment ($2.0 billion). The remediation programs to be funded by this money, particularly actions funded by the Environmental Mitigation Trust, are still being planned and have many opportunities for your input. Amount Purpose Plan Developer Administrator Environmental Mitigation Trust $2.7 Billion State specific allocations noted below in Table 1 Support programs and actions that reduce NOx emissions States designated agent/beneficiary (with input from the public) Trustee & States designated agent/beneficiary ZEV Investment Commitment $2.0 Billion $1.2 billion to U.S. $800 million to California Support programs and actions that increase the use of zero emission vehicle (ZEV) technology in the U.S. Volkswagen (with input from states) U.S. EPA & California Air Resources Board 1 https://www.epa.gov/vw/all-30-liter-diesel-engine-vehicles-affected 2 Thompson, G., et al. (2015) In-Use Emissions Testing of Light-Duty Diesel Vehicles in the United States. Center for Alternative Fuels, Engines & Emissions West Virginia University. 3 https://www.epa.gov/sites/production/files/2015-10/documents/vw-nov-caa-09-18-15.pdf 2

Why Do We Care About NOx and Transportation? Nitrogen oxides, referred to as NOx, are precursors to ozone (O 3 ), which is also referred to as smog. This means that when NOx are emitted from sources such as gas-fueled cars, this provides the ingredients for ozone to form. As you may already be aware, ozone is a powerful pollutant and has direct consequences on human and environmental health. People most at risk from breathing air containing ozone include people with asthma, children, older adults, and people who are active outdoors, especially outdoor workers. 4 Environmental Justice What you may not be aware of, however, is that ozone pollution is particularly important for environmental justice purposes. Throughout the United States, as air quality decreases, overrepresentation of people of color increases. As the graph demonstrates, worse air quality correlates with greater proportions of people of color. Opportunity to Drive Big Change The transportation sector is one of the largest sources of NOx and other greenhouse gas emissions in the United States. In 2014 alone, emissions from the transportation sector accounted for over one fourth of all greenhouse gas emissions. 5 The funding from this settlement can be used to help electrify the transportation sector in every state of the U.S. and eliminate one of our biggest sources of pollution in the country. Not only will this improve human health, but it will also mitigate impacts on climate change and improve environmental health. 4 https://www.epa.gov/ozone-pollution/ozone-basics#what where how 5 https://www.epa.gov/ghgemissions/sources-greenhouse-gas-emissions 3

The Environmental Mitigation Trust Your greatest area of influence will occur with development of the Environmental Mitigation Trust. As a Sierra Club Chapter, you can ensure that (1) your state takes action to receive the funding it is eligible for, and (2) uses this funding in effective, impactful ways. To assist you with this mission, we have included an outline of your action steps on the following page, along with the necessary tools to succeed. These include: Template letters to your state governor identifying the opportunity to receive funds and encouraging your state to do so. Template letter to other agencies and organizations Factsheets about priority areas of funding investment that you can use to advocate for low NOx and ZEV programs that you believe would be best for your state: o Electric Vehicle Infrastructure if NOx emissions from lightweight vehicles are one of your state s main sources of pollution, consider encouraging your state to ramp up your EV infrastructure. This includes building EV charging stations, and is a great way to encourage consumers to purchase more electric vehicles in your state o Electric Ports if you are a state with long coastlines and many ports, transforming your state s port technology to electric will significantly reduce the amount of NOx pollution in your state s air o Electric Buses If your state s cities have poor air quality, consider replacing diesel buses with electric buses. Today the technology exists for buses to travel 350 miles before needing to recharge, 6 tell your state that this is a great opportunity to invest in a cleaner school and public transportation system. Webinar there is a recording of a webinar with an overview of the VW Settlement and discussion on engagement opportunities. Environmental Mitigation Trust Timeline: 1. On March 15, 2017, Wilmington Trust was officially appointed by the court as the Trustee of the Environmental Mitigation Trust 2. October 2, 2017 - Trust Effective Date (TED) 3. December 1, 2017 (TED + 60 Days) -- deadline for States to submit their Beneficiary certifications 4. January 30, 2018 (TED + 120 Days) -- deadline for the Trustee to announce Beneficiary Designation 5. First State s Funding Request minus 30 Days -- deadline for Beneficiaries to submit their Beneficiary Mitigation Plan 6 Marshall, A. (2016) This New Electric Bus Can Drive 250 Miles On One Charge. https://www.wired.com/2016/09/new-electricbus-can-drive-350-miles-one-charge/ 4

3 Things You Can Do To Influence the Environmental Mitigation Trust Funding Send a letter to your state governor as soon as possible, reach out to your state governor to alert him/her about this multi-million dollar funding opportunity for your state. This letter should tell them about their funding, their required action, and the deadline. A template letter to send to your state governor, highlighting the funding amount and relevant deadline, is available on the Sierra Club Volkswagen Settlement website. Although the final deadlines are not yet available, if your state misses the opportunity to apply for its portion of funding, it will be permanently excluded from the funding. For each state s funding allocation, see Table 1. Send letters to state agencies and reach out to your friendly sister environmental NGOs as soon as the Environmental Mitigation Trust is finalized (date TBA), send letters to your state s department of environmental protection and other environmentally interested organizations and agencies. This will increase the awareness and pressure, ensuring your state takes action. A template letter describing the funding opportunity and deadline is available on the Sierra Club Volkswagen Settlement website Advocate for project funding over the next coming months, work with your states designated beneficiary and other interested organizations to direct the flow of funding to areas that will best help your state reduce its dependence on oil and transition towards electric technology. Ideas of what to advocate for: Ramping up EV infrastructure and pulling away from your state s reliance on petroleum* Upgrading your state s ports with electric port technology* Outfitting your state s public transit and school transportation systems with electric buses* Building out government fleets with electric vehicles, especially trucks Investing in NOx reduction projects that also support environmental justice Ideas of what to advocate against: Diesel and/or Alternate Fueled (e.g. CNG, propane, Hybrid) vehicle upgrades although these options are available for partial funding, electric upgrades are allocated more settlement funding and provide greater NOx reductions* * Factsheets available see Sierra Club Volkswagen Settlement website 5

Table 1 Initial Environmental Mitigation Trust Fund Allocation Initial Subaccounts Initial Allocation ($) Initial Allocation (%) Puerto Rico $7,500,000.00 0.28% North Dakota $7,500,000.00 0.28% Hawaii $7,500,000.00 0.28% South Dakota $7,500,000.00 0.28% Alaska $7,500,000.00 0.28% Wyoming $7,500,000.00 0.28% District of Columbia $7,500,000.00 0.28% Delaware $9,051,682.97 0.34% Mississippi $9,249,413.91 0.34% West Virginia $11,506,842.13 0.43% Nebraska $11,528,812.23 0.43% Montana $11,600,215.07 0.43% Rhode Island $13,495,136.57 0.50% Arkansas $13,951,016.23 0.52% Kansas $14,791,372.72 0.55% Idaho $16,246,892.13 0.60% New Mexico $16,900,502.73 0.63% Vermont $17,801,277.01 0.66% Louisiana $18,009,993.00 0.67% Kentucky $19,048,080.43 0.71% Oklahoma $19,086,528.11 0.71% Iowa $20,179,540.80 0.75% Maine $20,256,436.17 0.75% Nevada $22,255,715.66 0.82% Alabama $24,084,726.84 0.89% New Hampshire $29,544,297.76 1.09% South Carolina $31,636,950.19 1.17% Utah $32,356,471.11 1.20% Indiana $38,920,039.77 1.44% Missouri $39,084,815.55 1.45% Tennessee $42,407,793.83 1.57% Minnesota $43,638,119.67 1.62% Connecticut $51,635,237.63 1.91% Arizona $53,013,861.68 1.96% Georgia $58,105,433.35 2.15% Michigan $60,329,906.41 2.23% Colorado $61,307,576.05 2.27%

Wisconsin $63,554,019.22 2.35% New Jersey $65,328,105.14 2.42% Oregon $68,239,143.96 2.53% Massachusetts $69,074,007.92 2.56% Maryland $71,045,824.78 2.63% Ohio $71,419,316.56 2.65% North Carolina $87,177,373.87 3.23% Virginia $87,589,313.32 3.24% Illinois $97,701,053.83 3.62% Washington $103,957,041.03 3.85% Pennsylvania $110,740,310.73 4.10% New York $117,402,744.86 4.35% Florida $152,379,150.91 5.64% Texas $191,941,816.23 7.11% California $381,280,175.09 14.12% Tribal Allocation Subaccount $49,652,857.71 1.84% Trust Administration Cost Subaccount $27,000,000.00 1.00% Tribal Administration Cost Subaccount $993,057.15 0.04% $2,700,000,000.02 100.00% 7