A Positive Political Economic Theory of Environmental Federalization

Abstract

This Article sets out a positive theory that explains the late twentieth-century federalization of American environmental law. On this theory, federalization occurred not because states had failed to regulate to reduce air and water pollution, but because older and heavily developed states moving toward such regulation gained a relative competitive advantage by imposing minimum standards on less developed and less polluted states (in the case of air), and by receiving subsidies from such regions (for water pollution reduction). The failure of federalization in the case of climate change is directly explained by this theory: the majority of states would be certain short and medium term net losers from such legislation.

Keywords: political economy, environmental federalism, environmental federalization, regulatory centralization, Clean Air Act, Clean Water Act, U.S. climate legislation