PARIS— Alain Brakha has run a newspaper kiosk for the past 30 years outside this city’s opulent opera house, where he breathes some of the worst traffic pollution in Europe.

“You feel it, of course,” the 57-year-old Mr. Brakha said as cars and tourist buses whizzed by Place de l’Opéra, belching pungent clouds of diesel exhaust. “You have difficulty breathing. During (pollution) peaks, it’s stifling. It’s as if someone puts a cover on a pot.”

Air pollution in Europe has declined over the past decade because of stricter environmental rules. But Paris and dozens of other cities still contend with pollution—especially from nitrogen oxides, or NOx—that far exceeds legal limits. Environmental experts and government officials say Volkswagen AG ’s admission that it sold diesel cars designed to fool emissions tests points to a significant reason: that diesel vehicles more broadly pollute much more than the lab-test levels auto makers advertise.

“There’s a policy failure with on-road diesel legislation,” said Jens Borken-Kleefeld, a senior researcher at the International Institute for Applied Systems Analysis, which does technical analysis of air-quality issues for the European Union. “This to a large extent means you have NOx noncompliance issues across Europe.”

Mr. Borken-Kleefeld estimates that if diesel vehicles were as low-polluting as lab tests suggest, a third of the nearly 300 areas with air levels of nitrogen dioxide, or NO2, the most dangerous form of NOx, now exceeding the EU’s regulatory limits would comply with the standards.

The Volkswagen scandal is putting new pressure on European policy makers to roll out tougher vehicle-testing standards that measure emissions based on how cars are actually driven, not how they perform in a lab. It is also reinforcing plans by some European cities to restrict diesel vehicles from their streets, a blow to the European auto industry’s huge investments in diesel technology.

“This scandal encourages us to go faster and stronger in the fight against these vehicles,” said Raphaël Chambon, deputy chief of staff to Paris Mayor Anne Hidalgo, who is pushing to eliminate all but the cleanest diesel vehicles from the French capital by 2020.

Nitrogen oxides are Western Europe’s biggest air quality problem, according to pollution data. Cars and trucks—mainly those with diesel engines—are the bloc’s primary source of the pollutants, followed by power plants, the European Environment Agency says.

In the U.S., where far fewer diesel cars are on the road, NO2 levels in the biggest cities tend to be half levels in European cities.

U.S. testing procedures of NOx emissions from cars are also much stricter than EU tests, because they more accurately model aggressive acceleration and other aspects of real-world driving, according to the International Council on Clean Transportation, a non-profit group that helped uncover the Volkswagen scandal.

In Europe, independent tests of cars in normal driving conditions have shown that emissions from even new diesel models with the latest pollution-control technology are four to five times the advertised levels.

Volkswagen has said that millions of cars sold in Europe were installed with emissions-masking software, though no evidence has emerged of other auto makers doing the same thing.

Regulations could also play a role in the discrepancy between lab and road tests: Industry experts say European law allows companies to prep vehicles sent for emissions tests in laboratories so they perform better, for example by testing the cars with a fully charged battery so the engine doesn’t have to work harder to charge the battery as it would on the road.

Erik Jonnaert, secretary-general of the European auto industry group ACEA, said many different factors, such as individual driving styles, can affect a car’s emissions on the road. But the group acknowledged that emissions tests don’t always reflect real-word driving conditions and said it was working to address the criticism. New standards “will require real-world emissions testing of cars for the first time,” he said. “The automotive industry is actively supporting these developments.”

Volkswagen didn’t respond to requests for comment.

NOx in its most dangerous form, nitrogen dioxide, or NO2, is a precursor of ground-level ozone and fine particles, which cause asthma, cardiovascular disease and other illnesses, according to the European Environment Agency. There is also mounting concern about the direct effects of breathing NO2.

Germany, France and four other European Union nations exceeded NOx pollution limits in 2013, explaining that higher-than-expected diesel emissions contributed to the problem.

Outside the Place de l’Opéra in 2013, nitrogen dioxide pollution was nearly twice the level deemed healthy, according to a monitoring station there, one of more than 4,000 across the continent that measure air quality. In the U.K., the worst air is found on Marylebone Road next to Madame Tussaud’s wax museum in central London, at more than twice levels considered healthy. A monitoring station on Stuttgart’s Am Neckartor, one of Germany’s busiest roads, registered the highest nitrogen dioxide levels in Europe in 2013, the last year for which complete data is available.

Paris has been hit with acute episodes of smog recently, including an episode last year in which the authorities made public transport free to get cars off the road.

But cities have limited tools to combat emissions. They can, like Paris, Berlin and other cities, ban older cars and other vehicles that don’t meet current emissions standards from their streets. This strategy, however, relies on purportedly cleaner cars performing as indicated in laboratory emissions tests.

“[The tests] are outdated and don’t properly reflect real driving conditions, particularly in cities,” said Michael Klinkenberg, policy adviser for Eurocities, a lobby group for cities. “That’s a big problem.”