I think you're right. Fines have to be higher than the direct cost to society and they have to be higher by the chance they're caught.
In this case, it was very hard to detect, it was fully intentional on the part of the company, and they fought for years to keep it hidden.
This sort of deception is maybe 1 in 20 or 1 in 50 to be caught? So it isn't like a parking ticket - it's hard to catch and was hard to prove.
Furthermore, this is a "deal with the mess you made" solution - or a "natural consequences" consequence if you are a parent. There are certainly much more efficient ways of spending the money to improve public health, but those are abstract, hard to explain to the public, and hard to explain to the car owners. So they are less efficient from the government, public and company's perspective. Make America hyper-rational and the owners would continue driving these cars and we'd spend the money on truck emissions or something.
Was it? The researches who detected it didn't seem like they were doing anything that special. My impression is that nobody had bothered to check before.
In this case, it was very hard to detect, it was fully intentional on the part of the company, and they fought for years to keep it hidden.
This sort of deception is maybe 1 in 20 or 1 in 50 to be caught? So it isn't like a parking ticket - it's hard to catch and was hard to prove.
Furthermore, this is a "deal with the mess you made" solution - or a "natural consequences" consequence if you are a parent. There are certainly much more efficient ways of spending the money to improve public health, but those are abstract, hard to explain to the public, and hard to explain to the car owners. So they are less efficient from the government, public and company's perspective. Make America hyper-rational and the owners would continue driving these cars and we'd spend the money on truck emissions or something.