The preceding chapter explored the difficult issues that arise for the design of environmental policy in an international setting, issues whose source is, in part, the absence of an international agency with the authority to make decisions that can internalize the costs that nations impose on one another. This chapter returns to purely domestic issues, concerning itself with the choice of the appropriate authority for environmental decision-making. In particular, we ask whether it is preferable to delegate the determination of standards for environmental quality to regional (or “local”) governments or to rely on a national environmental agency to set uniform standards for environmental quality that apply throughout the nation.

Current policy exhibits considerable ambivalence on this matter. In the United States, for example, the Congress, under the Clean Air Act, directed the U.S. Environmental Protection Agency to set national standards for ambient air quality. The EPA responded by defining maximum allowable concentrations for six so-called “criteria” air pollutants applicable to all areas of the country. In contrast, under the Clean Water Act, the individual states have responsibility for setting water quality standards. U.S. policy thus relies on uniform national (minimum) standards for air quality, but state-specific standards for water quality. Which approach, a national or a decentralized determination of environmental standards, is the appropriate one?

The results of this chapter suggest that the answer to this question is not simply one or the other approach. Instead, the analysis points to the need both for centralized and decentralized participation in the setting of environmental standards.