Subsidiarity in european environmental law: A competence allocation approach

Since the 1970s, the influence of the European Union in the area of environmental law and policy has steadily expanded, even though environmental policy continues to be a shared competence between the European Union and its Member States. As such, the allocation of competences between the European and national levels is governed by the principle of subsidiarity, which is aimed at maintaining a high level of decentralization. As it stands, subsidiarity is tested primarily, if not exclusively, against the presence of, or potential for, economic or environmental externalities of the regulated activity. Notwithstanding recent changes in the Lisbon Treaty to strengthen ex ante political control over the application of the subsidiarity principle, a rebuttable presumption in favor of an ever-increasing European role in environmental policy has developed. This Article aims to move beyond this rebuttable presumption by introducing additional criteria for competence allocation: Heterogeneity of preferences and conditions between regulated jurisdictions and activities, and the potential for economies of scale and scope. In addition, a distinction is made between the different phases of the regulatory process-specifically, norm setting, implementation, and enforcement-also referred to as regulatory competences. By distinguishing between these stages of regulation, the relative importance of externalities, and the additional criteria mentioned above, each stage of regulation is explicated. Finally, this Article discusses the extent to which instrument choice can act as an alternative for the centralization or decentralization of competences. The potential of this complementary "competence allocation" approach to the interpretation of subsidiarity in European environmental law is illustrated by a case study of the European Union Emissions Trading Scheme.