Beyond "Trading up": Environmental Federalism in the European Union

This study analyses the stringency of EU environmental regulations. Contrary to the proposition of an economic “trading up” of standards, the positive theory of environmental federalism which is developed allows for an examination of political mechanisms and the effects of regulation. Empirical results of the study of European and national decisions in EU vehicle emission legislation allow for the conclusion that the adoption of strict rules is viable, even in extreme sectoral cases where the industry concerned is economically and politically powerful.
The distribution of costs across the industry and EU member states is the central mechanism which provokes strict and lax rules. In vehicle emission legislation, systematic differences between the regulation of CO2 and air pollutant emissions exist. Diesel particulate filters were introduced comparatively late as a result of a “Baptist-bootlegger” coalition of environmental associations and parts of the automotive industry.