Diesel cars are not just a problem in the USA

In a huge wake-up call for the automobile industry, German auto giant Volkswagen has been caught out deliberately falsifying the emissions from their popular diesel cars.
Jettas, Beetles, Golfs, Passats and Audi A3s sold in the US market - still a tiny market compared to Europe - have been found to be fitted with sophisticated computerized "defeat devices" that can sense when the car is being tested, rather than being drive on the open road, and switch to a kind of safety mode in which emissions are much lower than usual. Once out on the road again, the devices switch back to full power (and emissions), resulting in cars in daily use that spew out as much as 40 times the nitrogen oxide pollutants (collectively known as NO_X) allowed by US Environmental Protection Agency rules. The problem was initially spotted by an NGO called the International Council on Clean Transportation (ICCT), which was carrying out independent emissions testing, including on-road testing, in association with the Center for Alternative Fuels, Engines and Emissions at the University of West Virginia.
Volkswagen AG has admitted to the fraud, and says that up to 11 million Volkswagen cars worldwide are fitted with the device. The company may face up to $18 billion in fines in the USA alone, to say nothing of possible legal action from consumers and shareholders, and CEO Martin Winterkorn has already announced his resignation. Environment Canada has since announced its own investigation into Volkswagens in Canada, as has Italy, France and South Korea, and a Europe-wide probe is likely.
About half of Volkswagen's sales are diesel cars, and in Europe as a whole diesel cars make up about 50% of all cars (closer to 70% in France and Spain), as compared to a measly 3% in the USA. Proponents point out that diesel fuel is more powerful than standard gasoline and 20-40% more efficient, and as a result diesel cars emit less carbon dioxide that gasoline cars (although not as much less as was once thought, and even this is now being questioned). On the other hand, they tend to produce substantially more nitrogen oxides and particulate pollution.
The BBC has produced a good primer on what you should know about diesel fuel, but suffice it to say that, in addition to pumping out almost as much carbon dioxide as gasoline, the other pollutants that diesel produces are perhaps even more worrying. Nitrogen dioxide (NO₂) is particularly nasty, and can cause or exacerbate a number of health conditions, including inflammation of the lungs, asthma and bronchitis, as well as an increased risk of heart attacks and strokes. The particulate matter from diesel exhausts has been shown to cause cancer and, although diesel cars are fitted with extremely effective filters, many people remove these filters to improve fuel economy and performance and, in addition, NO₂ forms something called secondary particulate matter when it enters the atmosphere, the effects of which are not yet fully understood.
Since the 1990s, many European nations have actively subsidized diesel (and heavily taxed gasoline) in the honest belief that diesel is better for the environment and can help cut greenhouse gas emissions. More recent scientific evidence suggests that this may not in fact be the case, and there are even moves now to limit diesel cars in some cities. NO₂ levels are well above European Union legal limits in many cities, including parts of London, Paris and Munich, and tests by the ICCT have shown that modern diesel cars in normal use emit on average seven times the prescribed European limit for NO_X (US limits are even more stringent). Indeed, some sources estimate that hundreds of thousands of premature deaths in Europe may be laid at the door of the recent popularity of diesel cars.
After these revelations, big changes may be afoot in the European car market. Volkswagen, however, may or may not be around to see it.