AIR Index
The AIR Index is a quantitative metric for evaluating firm-level artificial intelligence (AI) research and development (R&D) activity, constructed via natural language processing techniques that assess semantic similarity between corporate earnings conference call transcripts and embeddings from highly cited AI research papers.[1] Introduced by Federal Reserve economist Paul E. Soto in a February 2025 working paper, it captures the intensity of AI-related discourse in executive discussions, enabling granular tracking of AI innovation across industries and firms.[2] Empirical analysis using the index reveals pronounced sectoral variations, with sustained elevation in computer and electronics manufacturing alongside post-2022 accelerations in computing infrastructure and educational services following generative AI advancements like ChatGPT.[1] Elevated AIR Index values correlate with immediate boosts in firm market valuations, such as Tobin's Q and stock returns, and sustained capital expenditure growth for approximately one year, though they show no significant ties to productivity or employment shifts.[3] The index's construction from public transcripts offers a data-driven alternative to self-reported metrics, aligning with broader U.S. Census surveys on AI adoption while highlighting capital deepening as a primary economic response to AI pursuits.[1]History
Establishment and Launch
The AIR Index was established through the efforts of the AIR Alliance, an independent organization formed in 2017 by Nick Molden, founder and CEO of Emissions Analytics, a firm specializing in real-world vehicle emissions testing.[4][5] The alliance aimed to develop standardized protocols for measuring tailpipe emissions under actual urban driving conditions, addressing limitations in official laboratory-based certification tests conducted by manufacturers, which often understate real-world performance.[4] Emissions Analytics, operational since 2011 with a database encompassing over 2,000 vehicles tested across Europe and North America, provided the foundational data and expertise for the Index's creation.[6] The Index was publicly launched on February 28, 2019, as the first comprehensive, independent rating system for vehicle emissions, enabling direct comparisons of NOx and CO2 outputs from cars and vans.[7][8] Drawing inspiration from the Euro NCAP safety ratings established in the 1990s, the AIR Index sought to replicate a similar model for emissions transparency, using protocols standardized via CEN Workshop Agreements (CWA 17379 for emissions and later CWA 17934 for cabin air quality).[9][10] Initial rollout focused on providing at-a-glance ratings (A-E scale) based on portable emissions measurement systems (PEMS) during city cycles, with early tests revealing significant gaps between official figures and on-road results—for instance, some diesel models emitting up to 10 times more NOx in practice than lab certifications indicated.[11][12] Jaguar Land Rover became the first automaker to voluntarily submit vehicles for AIR Index testing in March 2019, marking an early adoption milestone and underscoring the system's intent to influence manufacturer accountability beyond regulatory minimums.[13] The launch emphasized empirical, repeatable testing independent of industry influence, with data collection adhering to protocols chaired by Molden through European standardization bodies.[14] By prioritizing urban real-world scenarios—such as stop-start traffic accounting for 80-90% of typical driving—the Index positioned itself as a tool for consumers, fleet operators, and policymakers to assess environmental impact more accurately.[15]Evolution of Scope
The AIR Index was initially established with a scope centered on measuring nitrogen oxides (NOx) and carbon dioxide (CO2) tailpipe emissions from passenger cars and light commercial vans through independent, real-world on-road testing protocols. This focus emerged in response to discrepancies between laboratory-based official emissions data and actual urban driving conditions, particularly highlighted by the Volkswagen Dieselgate scandal in 2015, prompting the need for transparent, comparable ratings akin to safety assessments like the New Car Assessment Programme (NCAP). Testing adhered to the European Committee for Standardization's CWA 17379 methodology, which Emissions Analytics had developed and applied since 2011 to over 2,000 vehicles, ensuring ratings reflected typical mixed urban, rural, and highway cycles rather than idealized lab scenarios.[4][10] By 2019, following the AIR Alliance's formal launch of public ratings, the scope began expanding to encompass a broader range of vehicle types, including sport utility vehicles (SUVs) alongside traditional cars and vans, to address the growing market share of larger models with potentially higher real-world emissions profiles. This inclusion aimed to provide consumers and policymakers with comprehensive data across the light-duty vehicle fleet, prioritizing petrol and diesel powertrains while highlighting performance variations not captured in type-approval standards. The expansion maintained emphasis on NOx as a key urban air pollutant metric, given its role in smog formation and health impacts, while CO2 ratings supported evaluations of fuel efficiency and greenhouse gas contributions under varied load conditions.[10][12] A significant evolution occurred with the integration of vehicle interior air quality (VIAQ) assessments, introduced via the complementary Cabin AIR Index using the CWA 17934 standard, which evaluates cabin filtration, ventilation effectiveness, and pollutant ingress during on-road drives. This addition shifted the framework beyond external tailpipe outputs to occupant exposure risks, measuring buildup of CO2, volatile organic compounds (VOCs), and particulate matter inside the vehicle, thereby addressing how cabin design influences personal air quality amid external pollution. The broadened scope, formalized by the AIR Alliance's governance through scientific and members' advisory committees, enhanced the Index's utility for fleet managers and urban dwellers, reflecting empirical evidence that interior pollutants can exceed outdoor levels in poorly ventilated vehicles. As of 2023, the Index covered ratings for over 1,000 European-market models, with ongoing protocols requiring multiple test replicates per vehicle to ensure statistical robustness.[4][10]Methodology
Real-World Testing Protocol
The AIR Index employs portable emissions measurement systems (PEMS) attached to test vehicles to capture tailpipe emissions during on-road driving, adhering to standards such as US CFR 1065 or European Real Driving Emissions (RDE) regulations for equipment accuracy.[16] These high-specification analyzers sample exhaust gases in real-time, focusing on nitrogen oxides (NOx) for urban driving scenarios, with additional metrics like CO2 included where applicable.[16] The protocol follows the CEN Workshop Agreement CWA 17379, a voluntary European standard developed by over 40 experts and initiated by Emissions Analytics Ltd., ensuring reproducibility and comparability across tests.[16] Testing requires a minimum of two vehicles of the same model, each subjected to at least three separate sessions, yielding at least five valid trips per vehicle.[10] Each trip must span a minimum of 10 kilometers, lasting approximately 20 minutes, conducted on public highways under urban-like conditions with average speeds between 20 and 40 km/h.[16] Environmental constraints include ambient temperatures of 10–20°C, altitudes below specified limits to avoid confounding factors, and restrictions on excessive acceleration or road gradients to simulate typical city driving.[16] Tests across multiple days and journeys minimize variability from vehicle warm-up or traffic anomalies, with invalid runs discarded based on predefined criteria in CWA 17379.[10] Data processing involves averaging NOx emissions in milligrams per kilometer, weighted toward urban operation, to derive ratings independent of manufacturer-submitted lab figures like WLTP or Euro standards, which often underestimate real-world performance.[10] This contrasts with official protocols by prioritizing dynamic, non-simulated routes over chassis dynamometers, revealing discrepancies such as elevated NOx in pre-RDE diesel engines during stop-start traffic.[16] Validation through peer-reviewed standards and cross-laboratory comparisons upholds the protocol's integrity, though it remains voluntary and not mandated by regulators.[16]Measured Emissions and Metrics
The AIR Index evaluates tailpipe emissions of nitrogen oxides (NOx), particulate matter (PM), and carbon dioxide (CO2) through on-road testing protocols designed to simulate real-world urban driving.[17] NOx and PM measurements prioritize air quality impacts, while CO2 assessments address greenhouse gas contributions to climate change.[17] These emissions are quantified using portable emissions monitoring systems (PEMS) attached to the vehicle's exhaust, which sample gases in real-time during public highway drives compliant with US CFR 1065 or European Real Driving Emissions (RDE) standards for precision.[16] Testing requires data from at least two independently sourced vehicles per model, with a minimum of three separate tests yielding at least five valid urban trips each (totaling ≥10 km per trip at 20-40 km/h average speed, ambient temperatures of 10-20°C, and constraints on acceleration and road gradients).[16] This follows the CEN Workshop Agreement (CWA) 17379, a voluntary European standard adapted for pre-RDE vehicles like non-hybridized diesels, extending RDE-like conformity factors to ensure robust, repeatable metrics beyond laboratory cycles.[16] Emissions data are normalized to grams per kilometer (g/km) for NOx and CO2, and mg/km for PM, enabling direct comparisons across models.[17] Fuel efficiency metrics, derived from CO2 outputs, are reported in miles per gallon (mpg) or liters per 100 km (l/100km) under these real-world conditions, highlighting discrepancies with official type-approval figures.[17] Additionally, the index incorporates cabin air quality metrics by measuring pollutant ingress (e.g., NOx, PM) relative to external levels during controlled drives at 30-50 km/h, with ventilation in fresh air mode, air conditioning off, and fan at 50% or automatic settings for at least three 30-minute tests per model.[17] These protocols prioritize empirical on-road data over manufacturer-submitted lab results, addressing known gaps in official standards like WLTP or NEDC where real-world NOx can exceed lab limits by factors of 4-14 for certain diesels.[16]Rating and Grading System
The AIR Index employs a grading scale from A (lowest emissions and best performance) to E (highest emissions and worst performance) to evaluate vehicles' real-world environmental impact. This system assesses tailpipe emissions of nitrogen oxides (NOx) and carbon dioxide (CO₂), as well as cabin air quality, using standardized on-road testing protocols rather than laboratory simulations. NOx ratings focus on urban driving emissions in milligrams per kilometer (mg/km), with a reference urban limit of 270 mg/km for context, while CO₂ ratings correlate with fuel consumption and global warming potential. Cabin ratings measure the ratio of interior-to-exterior particulate matter under normal ventilation conditions.[18][19] Vehicles are graded by testing at least two units per model variant for tailpipe emissions under the European Committee for Standardization's CWA 17379 protocol, which simulates repeatable urban cycles to capture non-lab conditions like cold starts and varied loads. Interior air quality grading follows CWA 17934, involving three 30-minute tests with ventilation in fresh air mode (19°C, no air conditioning, 50% fan speed) to quantify filter and system efficacy against external pollutants. Scores are derived from aggregated data, assigning letter grades based on performance thresholds that prioritize empirical real-world outputs over manufacturer-optimized lab results, enabling cross-model comparisons.[18][19] The A-to-E scale provides a consumer-oriented benchmark, where A-rated vehicles demonstrate superior pollutant capture and minimal emissions (e.g., low NOx below stringent real-world benchmarks), while E-rated ones exceed typical urban thresholds, highlighting discrepancies with official Euro standards. This grading integrates multiple metrics into a composite view, though tailpipe NOx often drives the primary score due to its direct link to local air quality health risks. Independent verification ensures ratings reflect causal emission behaviors in everyday use, not idealized scenarios.[19][20]Vehicle Assessments
Initial and Ongoing Tests
The initial testing for a vehicle's AIR Index rating involves independent real-world emissions measurements using portable emissions measurement systems (PEMS) attached to the exhaust, conducted on public roads under controlled urban driving conditions.[16] Tests adhere to the CEN Workshop Agreement (CWA) 17379 methodology, which specifies urban NOx emissions evaluation for vehicles predating stricter Real Driving Emissions (RDE) regulations, requiring trips of at least 10 km with average speeds between 20-40 km/h, ambient temperatures of 10-20°C, and constraints on acceleration and road gradients.[16] At minimum, ratings derive from five valid trips across at least three separate tests performed on two or more independently sourced vehicles of the same model and specification to ensure representativeness and reduce variability.[16][13] These initial assessments measure tailpipe emissions such as NOx and CO2 in milligrams per kilometer, prioritizing urban scenarios where pollution impacts are highest, and exclude manufacturer-submitted laboratory data to avoid discrepancies observed in scandals like Dieselgate.[16] Vehicles are sourced anonymously from the market or manufacturers without prior notification to prevent optimizations, with data verified by accredited laboratories for compliance with standards like US CFR 1065 and European RDE protocols.[16] Once established, ratings are assigned A-E grades based on emissions thresholds, with A indicating the lowest real-world pollution (e.g., under 60 mg/km NOx for diesels) and E the highest.[7] Ongoing tests maintain rating accuracy through periodic re-evaluations and expansions, as AIR conducts a continuous program of vehicle sampling to incorporate new models, variants, or post-market changes like software updates.[9] Updated results are integrated into the index when sufficient data from multiple vehicles and trips confirm shifts in performance, ensuring ratings reflect evolving real-world conditions rather than static type-approval figures.[9] This approach addresses potential degradation over time or discrepancies with official WLTP/RDE compliance, with transparency provided via the AIR Index database for public verification.[16] As of 2023, expansions include cabin air quality tests involving at least three 30-minute drives at 30-50 km/h to assess filtration efficacy against external pollutants.[10]Key Rankings and Comparisons
The AIR Index has revealed significant variation in real-world NOx emissions among tested vehicles, with ratings ranging from A (0-80 mg/km) to E (over 600 mg/km) based on urban driving tests. High-performing models, particularly certain diesel vehicles, have achieved top A ratings, while others, including some popular superminis, score poorly, highlighting discrepancies not captured by official laboratory standards. For instance, Jaguar Land Rover diesel models tested in 2019 emitted NOx levels as low as 14 mg/km, outperforming historical EU emission limits from two decades prior.[21]| Model | Fuel Type | NOx Emissions (mg/km) | AIR Index Rating |
|---|---|---|---|
| Jaguar E-PACE HSE 2.0L 180hp | Diesel | 14 | A |
| Range Rover Evoque TD4 | Diesel | 17 | A |
| Land Rover Discovery 3.0 TD6 | Diesel | 33 | A |
| Land Rover Discovery Sport | Diesel | 34 | A |
| Mini Cooper SD (2015) | Diesel | Not specified (A range) | A |
| Volkswagen Crafter CR35 LWB (2019) | Diesel (van) | 53 | A |
Discrepancies with Official Standards
The AIR Index employs on-road testing protocols, such as those outlined in CEN Workshop Agreement CWA 17379, to measure NOx and CO2 emissions under real urban driving conditions, contrasting with official laboratory-based standards like the WLTP, which simulate controlled cycles but often fail to capture variables such as traffic congestion, acceleration patterns, and varying loads. Independent tests conducted by the AIR Alliance since 2011 across over 1,000 vehicles demonstrate that real-world NOx emissions frequently exceed WLTP-declared values, with historical data from the predecessor NEDC underestimating NOx by a factor of 4 to 5 times and CO2 by approximately 40%.[16][20] Although WLTP introduced improvements over NEDC, including a more dynamic test cycle, discrepancies persist, particularly for Euro 5 and early Euro 6 diesel vehicles produced between 2010 and 2018, where on-road NOx outputs can align more closely with less stringent Euro 3 compliance levels rather than certified norms.[10] Specific vehicle assessments under the AIR Index highlight these gaps; for instance, top-selling vans exhibit elevated urban NOx emissions in real-world scenarios, far surpassing their official WLTP ratings and revealing inconsistencies in manufacturer declarations optimized for lab conditions. Diesel models, once marketed as low-emission, often show NOx levels up to several times higher during actual city driving due to incomplete adherence to real driving emissions (RDE) conformities, which, while mandated in Europe since 2017, apply limited conformity factors (e.g., 1.43 for NOx until recent reductions).[28][12] In contrast, petrol and hybrid vehicles tend to display smaller variances, underscoring how official standards may disproportionately favor certain powertrains in controlled environments but underperform in evaluating tailpipe pollutants under diverse operational stresses.[10] These discrepancies arise from inherent limitations in lab testing, such as idealized road load simulations and exclusion of cabin air infiltration, which the AIR Index addresses through additional metrics like ventilation effectiveness under CWA 17934; official protocols like WLTP do not incorporate such interior air quality evaluations, potentially overlooking secondary exposure risks from external pollutants entering via HVAC systems. While regulatory RDE tests aim to bridge this divide with portable emissions measurement systems (PEMS), the AIR Index's broader database and standardized grading provide a more comprehensive benchmark, exposing systemic underreporting in official figures that influences consumer choices and policy enforcement.[10][9]Reception and Criticisms
Positive Assessments
The AIR Index has been commended for delivering independent, real-world emissions testing that surpasses the limitations of official laboratory protocols like WLTP, offering consumers and policymakers a more accurate basis for evaluating vehicle performance in urban driving conditions.[20] This approach highlights discrepancies between lab certifications and on-road NOx and CO2 outputs, enabling targeted selections of lower-emitting models without relying on potentially optimistic manufacturer claims.[12] Automotive manufacturers have utilized AIR Index results to showcase superior emissions control in specific powertrains; for instance, Jaguar Land Rover's 2019 tests revealed their new diesel engines as among the cleanest available in Europe for NOx emissions, with models like the E-Pace and Discovery Sport achieving top ratings.[29][30] Such validations demonstrate the index's utility in identifying effective technologies, including diesels that perform comparably or better than some petrol alternatives under real conditions.[31] Proponents argue that the index fosters market confidence by transparently rating vehicles, encouraging shifts to cleaner options and supporting economic recovery in the automotive sector amid emissions scandals.[32] It also aids fleet managers and urban planners in prioritizing low-emission vehicles for compliance with air quality zones, potentially accelerating NOx reductions with minimal disruption to existing fleets.[33] Expansion to cabin air quality metrics further enhances its value, providing standardized data on interior pollutants to inform buyer decisions beyond tailpipe outputs.[34]Skepticism and Challenges
The AIR Index's reliance on independent, on-road testing using portable emissions measurement systems (PEMS) has prompted questions about methodological consistency and representativeness, as results can vary with factors like vehicle maintenance, ambient conditions, and specific test routes, unlike the controlled parameters of official laboratory homologation.[35] While standardized under CEN CWA17379, this approach inherently introduces greater variability than pre-RDE lab tests, potentially leading to rankings that do not fully reflect fleet-wide averages.[16] Coverage remains a key limitation, with initial ratings applied to approximately 200 vehicles as of March 2019, focusing primarily on models certified before the EU's 2017 Real Driving Emissions (RDE) regulations; expansion has been gradual due to the high costs and logistical demands of PEMS-equipped road testing. This selective sampling raises concerns about generalizability across model variants, engine tunes, and global markets, as not all vehicles undergo evaluation.[20] Skepticism toward the AIR Alliance, founded by Emissions Analytics, stems partly from the firm's broader research portfolio, including studies claiming higher non-exhaust particulate emissions from electric vehicles due to tire and brake wear, which critics argue overemphasize lifecycle elements while underweighting tailpipe advantages and grid decarbonization.[36][37] Such findings, disseminated via outlets skeptical of rapid EV adoption, have fueled perceptions of potential bias against certain powertrains, though AIR Index ratings specifically target tailpipe NOx and CO2, showing zero scores for battery electrics.[15] Industry stakeholders, including the Society of Motor Manufacturers and Traders (SMMT), have indirectly challenged real-world testing paradigms like AIR's by defending diesel performance under varied conditions and emphasizing progress in official RDE compliance, suggesting independent indices may amplify worst-case urban scenarios over typical usage.[38] Discrepancies between AIR ratings and RDE data for post-2017 vehicles further complicate direct policy integration, as conformity factors in official tests allow higher limits to account for testing tolerances.[39]Policy and Market Influence
The AIR Index has informed urban air quality policies by providing independent, real-world emissions data as an alternative to manufacturer-submitted laboratory figures, enabling cities to target high-NOx vehicles more precisely in clean air zones (CAZs). For instance, the Greater London Authority integrated AIR Index ratings into its Cleaner Vehicle Checker tool, launched on February 3, 2021, to support the Ultra Low Emissions Zone (ULEZ) by verifying compliance based on on-road NOx and CO2 measurements rather than Euro standards alone.[9] This approach allows exemptions for vehicles demonstrating low real-world emissions, potentially reducing unnecessary restrictions on compliant models while prioritizing retrofits or phase-outs for over-emitters, as evidenced by AIR Index submissions to UK parliamentary inquiries on air quality in August 2020.[35] In broader policy contexts, the index supports standardized emissions thresholds under methodologies like CWA 17379 (published January 2019), offering municipalities a data-driven basis for access restrictions and incentives without relying on potentially optimistic official certifications.[40] Cities can leverage its A-E ratings to calibrate policies, such as differential charges or bans, focusing on diesel vehicles from 2010–2018 (Euro 5 and pre-RDE Euro 6), which often exceed lab-based limits in urban cycles.[20] On the market side, AIR Index ratings empower fleet managers to optimize total cost of ownership (TCO) by selecting vehicles with verified low emissions, avoiding fines from zones like ULEZ and extending operational lifespans in restricted areas.[41] Covering over 90% of key passenger car and van variants through more than 2,000 independent tests, it influences procurement decisions, particularly for commercial operators facing urban access fees.[10] Consumer-facing tools on platforms like airindex.com enable buyers to compare models, potentially shifting demand toward higher-rated options and pressuring manufacturers to prioritize real-world performance over lab compliance.[42] While direct market share data remains limited, the index's emphasis on tailpipe NOx—linked to 40,000 annual premature deaths in the UK—aligns with growing regulatory scrutiny, indirectly boosting sales of cleaner petrols, hybrids, and compliant diesels.[18]Developments and Future Directions
Expansion to New Vehicle Types
In November 2019, the AIR Index expanded its scope beyond passenger cars to encompass light commercial vehicles, particularly diesel vans, through independent on-road testing of eleven top-selling European models.[28] This initiative addressed the significant contribution of commercial fleets to urban NOx pollution, with results showing emissions up to eight times official Euro 6 limits in real-world urban cycles for models like the Mercedes Citan and Ford Transit Connect.[43] Ratings for these vehicles followed the established A-to-E scale, prioritizing NOx alongside CO2 metrics derived from standardized CEN Workshop Agreement protocols (CWA 17379).[28] The extension enabled fleet operators and urban planners to identify cleaner alternatives among light-duty commercials, revealing that even compliant Euro 6 vans often underperformed in practical driving due to factors like payload and cold starts not fully captured in laboratory homologation.[44] By 2021, the database had grown to cover a broader array of van variants, including petrol and hybrid options, though diesel models dominated early assessments given their prevalence in commercial use.[45] As of 2025, no verified expansions have occurred to heavier vehicle categories such as trucks, buses, or two-wheelers, with testing remaining confined to light-duty cars, SUVs, and vans.[10] Efforts have instead emphasized deeper coverage of electrified powertrains within existing types, including plug-in hybrids, where tailpipe emissions during charged-depleted modes are evaluated against full-electric baselines showing near-zero NOx.[46] This focus aligns with the index's emphasis on verifiable on-road data over lifecycle analyses, though indirect emissions from battery production remain outside its primary methodology.Integration with Broader Standards
The AIR Index methodologies for assessing NOx and CO2 emissions draw from CEN Workshop Agreement 17379, a European standardization framework that specifies protocols for on-road testing under representative driving conditions, including urban, rural, and highway cycles. This alignment with CEN processes ensures compatibility with broader European emissions evaluation frameworks, such as those underpinning the Worldwide Harmonised Light Vehicles Test Procedure (WLTP), by emphasizing real-world data collection that supplements laboratory-based type-approval tests.[4] For vehicle interior air quality ratings, the AIR Index utilizes CEN Workshop Agreement 17934, which outlines standardized procedures for measuring ventilation efficacy, particle filtration, and pollutant ingress during controlled on-road drives at speeds of 30-50 km/h. These protocols integrate with existing standards like ISO 11155 for cabin air filters by incorporating dynamic, vehicle-specific performance metrics that official regulatory tests often overlook, such as filter degradation over time. This facilitates potential incorporation into fleet management guidelines or extended warranty criteria aligned with Euro NCAP safety assessments.[10] Despite these foundational ties to CEN, the AIR Index operates independently of mandatory regulatory compliance, such as Real Driving Emissions (RDE) conformity factors under EU Regulation 2017/1151, positioning it as a voluntary enhancement rather than a direct substitute. Independent testing by the AIR Alliance has revealed NOx emissions up to 10 times higher in real-world scenarios than WLTP predictions for certain diesel models, prompting calls for policymakers to blend AIR Index data with official benchmarks for more robust air quality modeling.[4] No formal regulatory mandate requires AIR Index integration as of 2025, though its data has informed advocacy for tightening RDE limits in post-Euro 6d phases.[20]| Aspect | AIR Index Approach | Relation to Broader Standards |
|---|---|---|
| Emissions Testing | On-road NOx/CO2 via portable analyzers (min. 3 tests per model) | Complements WLTP/RDE by validating lab-to-road correlations; uses CEN 17379 for interoperability |
| Interior Air Quality | Ventilation/filter tests under dynamic loads | Builds on ISO 16890/11155; addresses gaps in static regulatory cabin assessments |
| Policy Use | Independent ratings for consumer/policy guidance | Influences non-binding extensions to EU air quality directives (e.g., Directive 2008/50/EC) |