trade/environment/federalism

I've been away from the blog for some time, so I hope I haven't missed somebody else writing about this. It was interesting to note the US Environmental Protection Agency's decision not to allow the California waiver from the Clean Air Act, allowing CA to enforce its own higher standards for greenhouse gas emissions from motor vehicles. This seemed to be premised upon two things, the presence of either one would be enough to justify the EPA decision.

1. The impacts of global climate change in CA are not likely to be sufficiently different from those experienced in the rest of the United States to merit separate state regulation;
2. Local controls in CA would not be an effective way of addressing the negative environmental consequences associated with climate change experienced in CA.

Interestingly, the new EU proposal for a directive regulating carbon dioxide emissions from motor vehicles seems to take a similar approach (although the proposed standards seem to be stricter than the equivalent federal standards in the US). The targets set are uniform targets in the interests of the smooth operation of the European internal market. There is no opt-out in the proposal. Member States will only be allowed to adopt stricter standards if they satisfy a number of conditions, and it will be for the European Commission to decide whether they do:

1. The Member State is not acting in a protectionist manner;
2. The environmental benefits of the higher standards are of a sufficient magnitude to justify any resulting restrictions on trade (proportionality);
3. And the higher standards are justified on grounds of a problem specific to a Member State. While a problem need not be unique to a Member State to be considered sufficient, there must be evidence of local particularities which distinguish the situation in that Member State. This seems to be the EU equivalent to point 1 above in relation to the CA example.

What this means, in the EU at least, is that Member States can never justify stricter standards merely because they want to contribute more than their fair share to the resolution of a global environmental problem. This remains the case even where they have jumped through the protectionism and proportionality hoops, and even where there is great uncertainty as to what counts as an appropriate level of protection, or as to the nature or timing of the consequences of getting that level of protection wrong.

This seems to be a clear case of trade (seen as demanding regulatory uniformity) prevailing over environment (which might benefit from states being allowed to continue to act as policy entrepreneurs driving forward our understanding of environmental problems, or of techniques to respond effectively to them).

I’m in the midst of writing a paper on this so thoughts welcome of course.