Environmental Regulation in a Federal System

Environmental Regulation in a Federal System

Framing Environmental Policy in the European Union

New Horizons in Environmental Economics series

Tim Jeppesen

In this important book Tim Jeppesen investigates environmental regulation in a federal system and addresses the underlying question of whether regulation should be decided centrally, by EU institutions, or de-centrally, by individual member states. Whilst simple economic reasoning presumes that transboundary externalities require central solutions and local externalities need local solutions, the author finds that the real answer is much more complicated.

Chapter 2: Framing Environmental Policy in the EU

Tim Jeppesen

Subjects: economics and finance, environmental economics, environment, environmental economics, environmental governance and regulation


1. INTRODUCTION Concern for the environment has become an important dimension of cooperation within the European Union. The introductory articles of both the EU and the EC Treaty set forth the principles of cooperation. Article 2 EC emphasizes that the objective of the Community is ‘to promote . . . a harmonious, balanced and sustainable development of economic activities’. Article 3 EC cites the duties of the Community, which include the introduction of ‘a policy in the sphere of the environment’. Compared to the Treaty of Rome and the Single European Act (SEA), where environmental protection is not mentioned in the introductory articles, the EC Treaty clearly attaches considerable importance to the environment. Even though environmental protection is recognized as an important objective in the EC Treaty, it is, however, equally clear that environmental concern does not allow for national measures with an environmental aim ad infinitum (Krämer, 1992, p. 78). Member States’ possibilities of implementing national environmental measures that differ from EU measures are restrained by several provisions in the Treaties. The internal market, in particular, imposes several restrictions on national environmental policies. Article 14 EC determines that the internal market ‘shall comprise an area without internal frontiers in which the free movement of goods, persons, services and capital is ensured’. A well-functioning internal market requires in addition that equal conditions of competition for firms in the Community are maintained. The potential conflict is most distinct when environmental regulations are imposed in the form of product standards. In...

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