Article Volume 33:3

Environmental Protection, Economic Conflict and the European Community

Table of Contents

Environmental Protection, Economic Conflict and the

European Community

Owen Lomas*

The predominant objectives of the European
Community are economic, one of these being
the creation of a common market and, ulti-
mately, full integration of the economies of
Member States. Although the Community
has elaborated an environmental policy, the
policy has been largely conditioned by the
restricted mandate granted to the Council of
the Community, which is to issue directives
“for the establishment or functioning of the
common market”. Environmental initiatives
have had to be justified on the basis that they
remove impediments to the creation of a
common market and, consequently, the ev-
olution of an environmental policy has been
controlled by the economic agenda of the
Community. This, as the author points out,
may nevertheless work to the advantage of
the environment where the interests of the
environment and of economic integration co-
incide. When the added factor of the eco-
nomic self-interest of Member States is taken
into account, an interesting dynamic devel-
ops the outcome of which is often politically
contingent. The author examines the inter-
play between environmental policy, eco-
nomic integration, and the economic self-
interests of Member States and, supported by
illustrations, presents the various outcomes
which this dynamic has produced.

Les objectifs principaux de la Communaut6
europ~enne sont a caract~re 6conomique,
l’un d’eux visant la creation d’un march6
commun et, ultimement, ]a complete int6-
gration 6conomique des Etats membres. Bien
que la Communaut6 ait 6labor6 des poli-
tiques environnementales, ces politiques ont
grandement U6 conditionnies par le carac-
tare restrictif du mandat d6volu au Conseil
de la Communaut6, lequel consiste A 6mettre
des directives pour l’tablissement ou le fonc-
tionnement du march6 commun. Les initia-
tives en matire d’environnement ont 6t6
justifi~es par le fait qu’elles pouvaient contrer
certains obstacles i la creation d’un march6
commun et, en consequence, le dtveloppe-
ment de politiques environnementales a 6t6
soumis au contrle 6conomique de la Com-
munaut6. Ceci, note rauteur, peut constituer
un avantage pour ‘environnement lorsque
les int~r~ts propres A renvironnement et ft
l’intgration 6conomique coincident. Lors-
que le facteur additionnel de l’intr&t indi-
viduel Etats membres est pris en
considiration, une int~ressante dynamique
se d6veloppe, et les r6sultats de cette dyna-
mique reposent souvent sur des donnes pu-
rement politiques. L’auteur 6tudie cette
relation entre politiques environnementales,
integration 6conomique et int&rat individuel
des Etats membres et, A l’aide d’illustrations,
pr~sente divers r6sultats produits par cette
dynamique.

*Lecturer in Law, University of Birmingham, England; from October 1988, University of

Warwick, England.

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Synopsis

Background
I.
II.

Environmental Policy and Economic Integration
Illustrations of the Inter-relationship
A. Water Pollution –
Framework Directive

B. Air Pollution and Acid Rain

the Dangerous Substances in Water

1.
2.

Industrial Plants
Motor Vehicle Exhaust Emissions

III. Analysis
Conclusion

This article examines the dynamics of the inter-relationship between
the environmental policy of the European Community, the movement to-
wards economic integration in the Community and the desire of Member
States to protect their individual economic interests. It seeks to demonstrate
that:
a) there is an affinity between economic integration policy and environ-
mental policy which arises from the origins and legal status of the latter,
and the fact that both types of policy face a common obstacle in the form
of the economic self-interest of individual Member States;
b) while both types of policy are prone to fall victim to the economic self-
interest of Member States, of the two, economic integration is better placed
to overcome this obstacle;
c) the fortunes of environmental policy can become dependent on, and
subordinated to, those of economic integration policy;
d) despite the affinity which exists between them, the mutual interests of
economic integration policy and environmental policy do not always co-
incide, so that progress in integration policy can, as a result, represent a set-
back for environmental protection;

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e) conversely, where the mutual interests of economic integration and the
environment do coincide, the latter may benefit from its association with
the former.

Background

The European Community’ comprises a group of nations with pre-
dominantly economic objectives, in particular that of economic integration.
However, in 1972, at a meeting of the Heads of State or Government of
the Member States in Paris, it was declared that the Community should
have an environmental policy.2 Nearly 16 years later the Community has
seen three environmental “action programmes” and a fourth is just begin-
ning. 3 Policy initiatives have been taken across a whole range of environ-
mental issues, including water, air and noise pollution, the management of
waste, land use planning, and the protection of wildlife and the countryside. 4
The Community has also developed cross-sectoral policies on matters such
as environmental impact assessment, 5 cross-media pollution 6 and the need

‘It is now customary to refer to the “European Community” although there are, in fact,
three Communities: the European Economic Community (EEC), the European Atomic Energy
Community (EURATOM) and the European Coal and Steel Community (ECSC). The EEC
and EURATOM were established by two different treaties signed in Rome in 1957, while the
ECSC was established by a treaty signed in Paris in 1951. For environmental purposes, it is
the Economic Community which is of most importance and references in this paper to the
Treaty ofRome are, therefore, to the treaty establishing this Community.

2A definition of the environment, used by the European Commission, is “those elements
which in their complex inter-relationships form the framework, setting and living conditions
for mankind, by their very existence or by virtue of their impact”. See N. Haigh, EEC Envi-
ronmental Policy and Britain – An Essay and a Handbook (London: ENDS, 1984) at 3.
3The first programme was adopted in November 1973 (OJ Cl 12), the second in May 1977
(OJ C139), and the third in February 1983 (OJ C46). The fourth programme, to run from 1987
to 1991, was adopted by the Commission in October 1986 (COM (86), 485 final), and approved
by the Council of Ministers in March 1987. See (1987)146 ENDS Report at 22 (ENDS Reports
are published monthly by Environmental Data Services Limited, London). Formal adoption
by the Council must, however, wait for the delivery of United Kingdom and European Par-
liaments’ opinions.

4For details of the substance of these policies see, inter alia: N. Haigh, EEC Environmental
Policy and Britain, 2d ed. (London: Longman, 1987); S. Johnson, The Pollution Control Policy
of the European Community (London: Graham & Trotman, 1983); Commission of the Eu-
ropean Community, Ten Years of Community Environment Policy (Brussels: Commission of
the European Community, 1984). For a brief overview see J. Minor, “Environmental Law: the
European Dimension” in D. Hughes, Environmental Law (London: Butterworths, 1986) c. 4.
5A Directive (85/337 OJ L175/40) on “The Assessment of the Effects of Certain Public and
Private Projects on the Environment” was adopted in 1985, five years after it had been originally
proposed. For a discussion of the Directive see N. Haigh, “Environmental Assessment – The
EEC Directive” (1987) J.P.L. 4. The Directive came into force on 3 July 1988.

6See the fourth environmental action programme, supra, note 3.

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for environmental policy to be integrated into the policies of the Community
and its Member States in all areas.

Within the Commission of the European Community, the environment
now has its own Directorate-General 7 which, together with its predecessor,8
has been responsible for numerous legislative proposals, well over a hundred
of which have now found their way into Community law. Environmental
policy is, therefore, rightly seen as an important element in the make-up of
the European Community.

Yet, the environmental programme claims a mere 0.06 per cent of the
Community’s budget.9 This is because the institutions of the Community
have no role in the implementation and administration of the policy. That
is the responsibility of Member States. The main function of the Community
is to agree on common policies and then legislate, with a view to having
these policies put into effect by the Member States.’ 0 For this reason, there
is a tendency for the Community to measure the success of environmental
policy in terms of the number of legislative proposals made and passed into
law. This conveniently ignores the more difficult question of implementa-
tion, where serious obstacles remain.1

7The Commission is the administrative arm of the Community. It has considerable powers,
including the right to make proposals for new policies and legislation. Directorate-General XI
(DG XI) deals with Environment, as well as with Consumer Protection and Nuclear Safety.
8The predecessor to Directorate-General XI was the Environment and Consumer Protection

Service of the Commission.

9See D. Briggs, “Environmental Problems and Policies in the European Community” in C.
Park, ed., Environmental Policies: An International Review (London: Croom Helm, 1986) 105
at 138.

10The Community also has research and experimental functions and may issue advice and

perform an educative role in relation to environmental matters.

“While Directives (the main legal instrument used for environmental policy) are legally
binding on Member States, their implementation is the responsibility of each Member. Where
implementation will be costly or otherwise disadvantageous for a Member State, there is a
tendency to delay or only partially implement, or otherwise seek to circumvent the Directive.
The Community has no effective method of “policing” implementation and it lacks the re-
sources to establish one. As a result, an enforcement deficit has arisen. The Community has
now recognized this: see the fourth environmental action programme, supra, note 3, which
places great importance on more effective enforcement and makes specific proposals. The House
of Lords Select Committee on the European Communities has, on a number of occasions,
criticized weaknesses in implementation. See, for example, their Report on the Fourth Envi-
ronmentalAction Programme (8th Report 1986/87 HL 135) at 21, para. 79, where they comment
that, “[i]mplementation of environmental law already made should be given high priority; for
law which is not implemented undermines confidence in the Community and the law which
it creates. . . . [T]here are signs of a growing gap between standards of implementation by some
Member States and the others …. ” See also Haigh, supra, note 2 at 23.

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Of the three main legislative means available to the Community,12 Di-
rectives have, almost invariably, been used to enact environmental policy.
Directives are legally binding on Member States as to the result to be
achieved, but the form and the method of implementation remains within
the discretion of each Member.13 This allows for considerable flexibility in
the selection of the machinery of implementation that best accords with the
particular national system. Implementation may, for example, be achieved
by means of an administrative direction, rather than primary or even sub-
ordinate legislation.

I.

Environmental Policy and Economic Integration

The environmental policy of the European Community has a close
affinity with economic integration policy. Two reasons, in particular, account
for this. The first concerns the origins and legal status of environmental
policy, while the second relates to the relationship which each bears to the
economic self-interest of Member States. Dealing with origins and status
first, at the time the European Communities were formed in the 1950s, the
environment was not thought of as a subject requiring systematic interna-
tional cooperation. Consequently, the original treaties contained no refer-
ence to matters of the environment. The legal basis for Community
environmental policy was, therefore, until very recently, rather tenuous. 14
It relied upon two articles of the Treaty of Rome,15 which established the
Economic Community, namely Articles 100 and 235.

and Decisions (which are binding upon those to whom they are addressed).

12These are Regulations (which are directly applicable law in the Member States), Directives
13Directives are not, therefore, directly applicable. They require implementation by Member
States within a given period. Though Directives are not directly applicable under the Treaty
ofRome, the European Court of Justice has decided that they may be capable of having direct
effect, thus giving citizens the right to enforce a Directive in their national courts. See Case
26/62, Van Gend en Loos v. Nederlandse Administratie der Belastingen, [1963] E.C.R. 1; Case
41/74, Van Duyn v. Home Office, [1974] 2 E.C.R. 1337; and Case 8/81, Becker v. Finanzamt
Mimster-Innenstadt, [1982] 1 E.C.R. 53. The need to enforce a Directive in the national courts
will only arise where a Member State has failed in its legal duty to implement it, either in
whole or part. Thus, where a court enforces a Directive, the ruling also amounts to a finding
that the Member State has failed to carry out its legal obligations. It is now clear that Directives
are capable only of “vertical” direct effect –
i.e. a citizen may only enforce a Directive against
a Member State. “Horizontal” direct effect, involving the reliance on a Directive by one in-
dividual when bringing an action against another, is not possible: see Case 152/84, Marshall
v. Southampton Health Authority, [1986] 2 W.L.R. 780.
14The idea of amending the Treaty in order to make environmental policy explicit was, at

the time, dismissed as unnecessary.
1525 March 1957, 298 U.N.T.S. 3.

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Article 100 reads, in part:

The Council shall, acting unanimously on a proposal from the Commission,
issue directives for the approximation of such provisions laid down by law,
regulation or administrative action in Member States as directly affect the
establishment or functioning of the common market.

Article 235 reads:

If action by the Community should prove necessary to attain, in the course of
the operation of the common market, one of the objectives of the Community
and this Treaty has not provided the necessary powers, the Council shall, acting
unanimously on a proposal from the Commission and after consulting the
Assembly, take the appropriate measures.

The argument used to justify the implementation of environmental
policies under Article 235 was rather weak, and the provision is not relied
upon exclusively. The difficulty is that, in order for the article to be used,
environmental protection must be “one of the objectives of the Commu-
nity”. This is taken to mean objectives set out or referred to in the Treaty
of Rome. Yet the Treaty contained no explicit reference to environmental
matters whatsoever. In order to overcome this, it was necessary for the
Commission to assert that the essentially economic aims of the Community,
which are set out in Article 2, in fact comprehended environmental issues.
The reasoning used here was that the promotion of “balanced” economic
expansion and the raising of living standards referred to in Article 2 con-
tained qualitative, as well as quantitative, elements, the former including
protection of the environment.16

Article 100 was taken to authorize Directives on the environment on
the basis that the policies concerned “directly affected the establishment or
functioning of the common market”. The underlying argument here was
that a uniform environmental policy was necessary in a common market
if industry and commerce were to compete on equal terms. Failure to agree
on common policies would open the door to divergent national environ-
mental measures, leading to unequal production costs and a consequent
distortion of competition. Such measures might also amount to non-tariff
barriers to trade, in the form of measures having an equivalent effect to
quantitative restrictions. 17

16Doubts about the correctness of these arguments, and consequently their legality, have been
raised by the House of Lords Select Committee on the European Communities (22d Report
1977/78). See also J. Usher, European Community Law and National Policy – The Irreversible
Transfer? (London: George Allen & Unwin, 1979).

17See Articles 30-32 Treaty of Rome.

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Once accepted, these arguments clearly brought environmental policies
which “directly” affected the common market within the article.18 Most
environmental Directives have, therefore, been based on Article 100 to-
gether with Article 235.

The fact that the Community’s environmental policy was conceived of
and justified in these essentially economic terms is of considerable signifi-
cance. It demonstrates clearly the close affinity which has, perforce, devel-
oped between environmental policy and the preponderant goal of economic
integration of the European Community.

The inadequate legal foundations of the Community’s environmental
policy have now been rectified by the Single European Act’ 9 which amends
the Treaty of Rome. Article 130R of the amended Treaty establishes envi-
ronmental protection as an explicit policy of the Community, and Article
130S provides power to implement it. The inclusion of these measures,
which had long been called for,20 in the Single European Act, has been
heralded as the “coming of age” of the Community’s environmental policy.2 1
There is no doubt that they represent a significant development. In practice,
however, Article 100A of the amended Treaty will most likely have the
greatest impact on the Community law-making procesS. 22

Article 100A provides, in part, that:

1…. The Council shall, acting by a qualified majority on a proposal from the
Commission…, adopt the measures for the approximation of the provisions
laid down by law, regulation or administrative action in Member States which
have as their object the establishment and functioning of the internal market.

3. The Commission, in its proposals envisaged in paragraph 1 concerning
health, safety, environmental protection and consumer protection, will take as
a base a high level of protection. [emphasis added]

‘$The House of Lords Select Committee, supra, note 16 has also criticized the use of Article
100 where the Directives concerned only indirectly affect the functioning of the Common
Market, thus raising doubts about the legality of a number of Community laws.

19The Single European Act was signed in February 1986 but, due to a delay in ratification

by the Irish Government, did not come into force until I July 1987.

2OThe call has come from lawyers, environmentalists and politicians alike. See, for example,
E. Grabnitz & C. Sasse, Umweltkompetenz der Europaaischen Gemeinschaften (Berlin: Erich
Schmidt Verlag, 1977) at 77.
21See P. Kromarek, “The Single European Act and the Environment” (1986) 1:1 European

Env. Rev. 10 at 12.

22Where the establishment of environmental protection as an explicit Community policy
may be of significance is in the European Court of Justice. Here, it is possible that the inter-
pretation given to specific Community laws by the Court may be influenced by the express
recognition given to environmental policy in Articles 130R, S and T.

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What makes the provision such a potentially powerful tool for envi-
ronmental policy is that, unlike under Article 130S, proposals brought under
Article 100A may be adopted by a qualified majority of the Council. 23 As
a result, contentious proposals which cannot be passed unanimously under
Article 130S may instead be brought under Article 100A, provided that they
are seen by the Commission as contributing to the “establishment and func-
tioning of the internal market”. Any doubt that this Article can be used in
cases where use of Article 130S would also be possible is removed by the
specific reference to environmental protection in paragraph 3. Already, the
Commission has indicated that seven draft Directives on environmental
issues, which have been obstructed by the unanimity requirement of Article
130S, may be brought before the Council under Article 100A.24 As we shall
see later, this has already happened in one case.25

Although the role of environmental policy receives express recognition
in Article 100A, the goal of economic integration remains at the heart of
this article. Despite Articles 130R and 130S, it is clear that the relationship
between economic integration and environmental policy in the European
Community is likely to continue in the coming years.

The second factor contributing to the close affinity between environ-
mental policy and economic integration, is that they share a common ob-
stacle to their progress. Measures designed to harmonize and integrate the
laws of Member States, and/or to promote economic integration, inevitably
require the surrendering of certain competitive advantages by some States.
They also bring with them costs and benefits which fall disproportionately
on Member States. Both environmental protection policy and economic

23Under the qualified majority voting system, the voting power of each Member State is
basically determined by its population, with adjustments being made to safeguard the interests
of smaller countries. Thus, France, Italy, United Kingdom and West Germany have 10 votes
each, Spain has 8 votes, Belgium, Greece, Netherlands, Portugal have 5 votes each, Denmark
and Eire have 3 votes each and Luxembourg has 2 votes. A simple majority is not sufficient
at least 54 of the 76 available votes must be obtained. The effect of this is that at least

seven Member States must support a proposal before it can be adopted. It also means that a
large country, such as the United Kingdom, will need at least two, and possibly four, allies
before it can prevent a policy from being adopted.

Merely because qualified majority voting is available does not mean that it will be used.
Previous experience has shown that normally the Council only adopts policies which, after
lengthy negotiation, command unanimous support. However, the use of qualified majority
voting is increasing, and there is reason to believe that its use for Article 100A may become
more routine. This is partly because all Member States, as recently as 1986, signed the Single
European Act which provides for qualified majority voting, and partly because, as explained
below (see text accompanying note 85), para. 4 of Article 100A provides alternative courses
of action for Member States who are outvoted.
24See (1987) 146 ENDS Report at 22-23 and (1987) 149 ENDS Report at 23.
25See below, text accompanying notes 84-85.

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integration policy have, therefore, to come to terms with the short term
economic self-interests of individual Member States, which often operate
powerful constraints on their progress.

Despite their close affinity, however, it would be wrong to conclude that
environmental policy and economic integration policy command the same
influence and status in the Community. Because greater economic integra-
tion is perceived by all Member States to be in their mutual long term
economic interests, economic integration policy is clearly in a stronger po-
sition than environmental policy to overcome opposition from Member
States trying to protect their short term economic position.

This factor, taken together with the legal and historical dependency of
environmental policy on the contribution it can make to economic inte-
gration, has important implications for environmental protection. On one
level, it may result in the interests of environmental policy being lost in a
purely economic argument between the demands of economic integration
policy and those of the economic self-interest of Member States. Where this
occurs, environmental policy becomes subordinate, and gains and losses for
the environment become secondary and incidental. At another level, the
effect may be to lock the environment into a policy framework which has
been designed to promote economic integration, rather than environmental
protection. This may have a decisive impact on the form and content of
important environmental policy initiatives. For, as is demonstrated below,
the demands of economic integration and environmental protection are not
always coterminous and may even be contradictory. Policy initiatives com-
bining both environmental protection and economic integration objectives
can, therefore, progress in ways which satisfy the needs of economic inte-
gration but which, for the environment, constitute a set-back. One particular
example of this is that, while environmental policy demands stringent emis-
sion standards, all that is needed to satisfy the requirements of economic
integration is that standards be uniform (or, at least subject to a uniform
maximum requirement, so that industry knows what it has to do to be
granted free access to the whole of the European market).

More positively, where the interests of economic integration policy and
environmental policy are in harmony, the potential exists for the latter to
benefit from its association with the former. In particular, the economic
integration aspects of the policy may enable it to gain sufficient support to
prevail over the economic self-interests of Member States in circumstances
where the environmental benefits alone would have been insufficient to
achieve this.

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II.

Illustrations of the Inter-relationship
Numerous examples exist which could be used to illustrate the complex
dynamics of the inter-relationship between environmental policy, economic
integration policy and the economic self-interests of Member States. For
reasons of topicality, both in Europe and in the North American context,
the examples of water pollution and air pollution, specifically the problem
of “acid rain”, have been selected for consideration. No attempt will be
made to assess the effectiveness of the policies examined, although some
conclusions may be drawn from what will be said.

A. Water Pollution –

Directive

the Dangerous Substances in Water Framework

Community action to control water pollution has taken several forms. 26
One approach has been to try to improve the quality of different categories
of water, such as drinking water, water used for bathing and fresh water
supporting fish. Another has been to attack different sources of pollution
directly through, for example, Directives on detergents and on waste from
the titanium dioxide industry. A third method, which contains elements of
each of the first two, is revealed in the Dangerous Substances in Water
Framework Directive27 of 1976. This Directive, which applies to all inland,
coastal and territorial waters,28 reflects a compromise between the United
Kingdom and the then eight other Community members, achieved following
more than a year of sometimes acrimonious disagreement and debate. The
Directive sets a framework for the elimination or reduction of pollution of
water by highly dangerous substances. The substances concerned are set out
in two lists in an Annex to the Directive which have become known as the
“black list” and “grey list”, reflecting their relative dangerousness. The black
list includes particularly toxic, persistent and bio-accumulatable substances,
such as mercury, cadmium and carcinogenic compounds. The objective here
is the complete elimination of water pollution by these substances. The grey
list contains substances which are considered to be slightly less hazardous
to the environment, such as lead, zinc, cyanide and ammonia.

26For details, see Haigh, supra, note 2, c. 5 & 7 and note 4, c. 4.
2776/464 OJ L129. For a detailed discussion, see J. Farquhar, “The Policies of the European
Community Towards the Environment: The Dangerous Substances Directive” (1983) J.P.L.
145.
28Groundwater is covered in a complementary Directive: 80/68 OJ L20.

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The contentious element in the proposal for this Directive concerned
the regime of control to be adopted in relation to black list substances. The
Commission proposed that “limit values” should be set, in daughter Di-
rectives,29 for each substance on the list. A “limit value” specifies the max-
imum allowable emission of a substance into the water by industry.30
Though limit values must not be exceeded, a Member State may ‘impose
emission standards which are more stringent than those specified by the
limit values.

The United Kingdom objected to this method. It proposed instead that
“water quality objectives” be applied for the discharge of individual sub-
stances. A “water quality objective” 31 prescribes the level of water pollution
which must not be exceeded, without specifying any maximum level of
discharge into the water by industry. Member States would set emission
standards in relation to each discharge which were necessary to meet the
prescribed quality objective in the receiving water.

The compromise eventually agreed upon was that the Community
would use both methods of control, but with limit values being regarded
as the preferred regime (see Table 1). The result was that the United King-
dom alone adopted the quality objective approach. 32

29This is a term used to describe later Directives which seek to apply the principles agreed
in the framework in specific circumstances or in relation to specific pollutants or sources of
pollution.
30A “limit value” laid down in a Community Directive expresses the maximum permissible
emission level for a given pollutant from any fixed installation anywhere in the Community.
This limit value is binding on each Member State, but not on the operators of individual
installations. Each Member State must, therefore, implement the Directive containing the limit
values by creating “emission standards” in their domestic laws. These emission standards may
either be equal to or more (but not less) stringent than the limit value. Further, provided, in
each case, the standard set is not less stringent than the limit values, these emission standards
may also vary from plant to plant, according to local circumstances or additional criteria laid
down in domestic law.

In light of this, Community-wide limit values can never be described as imposing “fixed”
or “uniform” emission standards on installations. The most that can be said is that the Com-
munity has a fixed or uniform maximum permissible emission level (or a fixed or uniform
minimum standard).

31The term employed is water quality objectives, although it is more correct to refer to
standards. This is because in an annex to the First Action Programme, the Community defined
standards as prescribing, with legally binding force, the levels of pollution not to be exceeded,
and objectives as being more in the nature of goals. It is clear that what is intended in the
Directive are, therefore, standards.
32This approach also requires a Member State to satisfy the Commission regularly that the

objectives (standards) set are being met.

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In relation to grey list substances, all Member States agreed to establish
their own water quality objectives, 33 to be achieved by the setting of emission
standards for each substance.

The Dangerous Substances in Water Framework Directive 1976

TABLE 1

Grey List Substances
Aim: Reduction of Pollution

Control method. Self-set “water
quality objectives” from which
limits on emissions must be
derived.
Emission standard to be set in
relation to each discharge which
is necessary to meet, in the
receiving water, the “water
quality objectives” determined
by individual Member States.

Black List Substances
Aim: Elimination of Pollution
Preferred control method:
Prescribed “limit values” for
emissions.
Emission standards to be
imposed on all discharges, the
same as or more stringent than
the “limit values” contained in
daughter Directives.

Alternative control method:
Prescribed “water quality
objectives” from which limits
on emissions must be derived.
Emission standard to be set in
relation to each discharge which
is necessary to meet, in the
receiving water, the “water
quality objectives” laid down in
daughter Directives.

So far, the Directive has given rise to three daughter Directives –

two
on mercury and one on cadmium. 34 Progress has been, by anyone’s stand-
ards, disappointingly slow. 35

33But these water quality objectives were set in accordance with existing Community Di-
rectives –
the implication being that the Community may decide, at some future date, to lay
down its own objectives. In fact, the Commission has now proposed just such a Directive to
contain quality objectives for chromium in water.

34These are: 82/176 OJ L81/29 and 84/156 OJ L74/49 on mercury, and 83/513 OJ L291/1

on cadmium.

35Note, however, that black list substances not yet covered by daughter Directives are subject

to the controls of the grey list regime.

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The two different approaches to pollution control contained in this
Directive reflect differing philosophies concerning environmental protec-
tion. Advocates of the limit value method argue that all pollution 36 is un-
desirable or cannot be assumed to be harmless, and that reductions should
be made whenever and wherever possible. In contrast, the quality objective
approach is more pragmatic, confining itself to pollution which caues iden-
tifiable harm.

Genuine differences of opinion also exist concerning the environmental
benefits that might be expected to flow from the adoption of either ap-
proach. 37 The proponents of limit values point to their easy application and
verification and to the fact that such measures are directed at the very source
of the pollution. Those favouring quality objectives argue, conversely, that
they deal with the problem of water pollution itself, rather than with activ-
ities which may not be damaging at all to the environment. Using this
approach, finite resources can be concentrated where they are most needed
and where the most effective contribution can be made to environmental
protection. Indeed, its proponents argue that in heavily polluted areas de-
termining emission standards for each discharge by reference to water qual-
ity objectives can lead to stricter controls than would apply if a limit value
approach had been used.38 As well, unlike limit values, the use of quality
objectives encourages industry to locate where least environmental damage
will be caused, thereby reducing costs.

Whatever the relative merits of the two approaches in environmental
terms, it is clear that at the heart of the dispute lay economic considerations.
The insistence of the United Kingdom on the inclusion of quality objectives
in the Directive was clearly motivated by reasons of economic cost and
economic self-interest. The quality objective approach allows for consid-
erable flexibility in the emission standards to be imposed on industry in
individual cases. In particular, largely for geographical reasons, in many
locations in the United Kingdom, quality objectives can be met by very
generous emission limits involving little or no abatement costs for the in-
dustries concerned. 39 In this way, industrial costs can be minimized, with
consequent benefits for the national economy. For the other Member States
who do not enjoy the same geographical advantage, the quality objectives
approach did not have the same economic attractions.

36Use of the word “pollution” here, however, can be said to beg the question, and raise
difficulties of definition. In the case of water, unless all discharges are to be regarded as “pol-
lution”, then evidence of some danger to the environment must exist before it can become
appropriate to use the word.

37See Haigh, supra, note 2, c. 4 & 5, particularly at 33-36.
38It is important to remember, however, that the limit value approach does not prevent
39This is discussed in more detail below, in text preceding note 90.

Member States from imposing more stringent emission standards, if they wish.

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EUROPEAN COMMUNITY

Economic self-interest is, of course, the chief enemy of economic in-
tegration. The United Kingdom’s success in having quality objectives in-
cluded in the Directive thus dealt a severe blow to any contribution which
it could be expected to make in this regard. For, whereas limit values tend
to equalize competition, quality objectives encourage distortions, favouring
some producers over others. This is particularly unfortunate, bearing in
mind that the chief legal justification for the Directive under Article 100
was its contribution to establishing the common market by equalizing com-
petition. It is worth noting, however, that although the United Kingdom
was alone in opposing limit values for black list substances, ironically and
inconsistently, all Member States agreed that the quality objective approach
should be adopted for grey list substances and, further, that each should be
free to determine the objectives to be set. The contribution that this made
to economic integration is not readily apparent, and the use of Article 100
as the means to implement this part of the Directive must surely have been
open to challenge as ultra vires and void. The implications for the envi-
ronment of the compromise solution contained in the Directive are less
easy to assess, depending as they do on judgments about the relative merits
of the two approaches to pollution control. For the purpose of the present
analysis, however, this does not matter. What the history of the disputed
draft Directive shows, is that environmental considerations were largely
secondary and incidental and that economic considerations were allowed
to predominate.

B. Air Pollution and Acid Rain

The control of air pollution has become a matter of international con-
cern. The European Community, and the United Kingdom itself, are both
parties to the 1979 Geneva Convention on Long Range Transboundary Air
Pollution.40 This Convention, which was conceived within the framework
of the United Nations Economic Commission for Europe (ECE), entered
into force in 1983. Since then, priority has been given under the Convention
to tackling the serious problem of acid rain,41 which has now reached critical
proportions on the European continent. The processes leading to the cre-
ation of acid rain are highly complex and still not fully understood.42 How-

40Convention on Long-Range Transboundary Air Pollution, 13 November 1979, 18 I.L.M.
1442.
41This is more correctly called acid deposition, rain being only one form.
42See the discussion in R. Cox & S. Penkett, “Formation of Atmospheric Acidity” in H. Ott
& H. Stangl, eds, Acid Deposition: A Challenge for Europe. Symposium proceedings, Karlsruhe
September 1983 (Brussels: Commission of the European Communities, 1983).

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ever, it is now well known that they involve the oxidation of compounds
of sulphur and nitrogen that are mainly produced by industrial plants (par-
ticularly power stations) and vehicle exhaust emissions. Action taken under
the Convention has, therefore, focussed upon abating the emission of sul-
phur compounds – mainly sulphur dioxide (SO 2) and nitrogen oxides
(NOx). In July 1985, a Protocol 43 on the reduction of sulphur dioxide was
issued, in which signatories undertook to reduce their emissions of S02 by
at least 30 per cent by 1993, with 1980 as the base line. Neither the United
Kingdom nor the European Community signed the Protocol.44 A draft Pro-
tocol on NOx emissions is also under discussion, but no agreement has been
reached.

Within the European Community, efforts have been made to develop
policies that, while consistent with the ECE Convention, are designed to
impose tighter and more specific controls on emissions of SO2 and NOx.
A general approach has been to set air quality standards that prescribe the
maximum permissible ground level concentrations of the pollutants, based
on what is necessary to protect human health and the environment. 45 How-
ever, neither of these Directives have so far proved very effective in reducing
pollution. The target date for compliance with the SO 2 Directive was 1 April
1983, yet by 1986 there had been no general change in air quality in the
Community, and all Member States continue to have zones in which the
limit values are exceeded.46 Both Directives permit derogation and non-
compliance, subject to steps being taken to improve the situation, and the
mandatory compliance dates are not until 1993 and 1994 for SO 2 and NOx,
respectively.

The Commission has also presented proposals for reducing emissions
of SO 2 and NOx from two specific sources: industrial plants and motor
vehicles. These proposals will be examined in some detail, for differing
reasons. The proposal on industrial plants highlights the difficulties posed
for both environmental policy and economic integration by economic self-
interest. In contrast, the proposals on motor vehicle emissions demonstrate
that the demands of economic integration can sometimes be satisfied while
environmental needs remain at the mercy of the economic self-interest of
Member States. These latter proposals also provide an example of how the

43See UN Economic Commission for Europe, Transboundary Air Pollution – Effects and

Control (New York: United Nations, 1986) at ix.

44In November 1986 the United Kingdom indicated that it might be willing to sign, but it

has now confirmed that it will not be doing so.

45See Directives 80/779 OJ L229 on SO2, and 85/203 OJ L87 on NOx.
46See Annual Summary Report on the application of the Directive referred to in Economic
and Social Consultative Assembly, European Environment Policy – Air, Water, Waste Man-
agement (Brussels: Economic & Social Committee of the European Community, 1987) at 40-
41.

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EUROPEAN COMMUNITY

economic integration framework within which some environmental policy
initiatives are placed tends to dictate their form and content.

1.

Industrial Plants

The only Directive concerning industrial plant emissions actually in
force was passed in 1984.47 This requires certain new plant in key industries
to secure authorization prior to commencing operations and imposes a duty
on Member States to ensure that the plant operations do not “result in a
significant level of air pollution”. The Directive also requires Member States
to adopt policies for the “gradual adaption” of existing plant to “best avail-
able technology” for the avoidance of air pollution, but imposes no time
limits.

Although a step in the right direction, the 1984 Directive contains no
limit values or air quality standards for any pollutants. Even before it was
adopted, it was seen as inadequate, in the light of growing evidence of serious
damage to forests, lakes, crops and buildings caused by acid rain, particularly
in West Germany. Prompted by the West Germans, the Commission, there-
fore, made proposals for major and specific reductions in the emission of
SO2 and NOx48 from large industrial plants over a nine year period.49 The
motives of the West Germans and the Commission were not, however,
purely environmental. Domestic political pressures had already prompted
the West German Government to introduce measures on a national level
involving a substantial reduction in emissions. These measures promised
to place considerable economic burdens on West German industry, thus
affecting adversely its competitive position. This is recognized in the pream-
ble to the draft Directive which stated that disparities between Member
States in “the obligations imposed in respect of large combustion plants …
[were] … liable to create unequal conditions of competition and this would
have a direct effect on the Common Market”. 50 The second purpose of the
Directive was, therefore, to promote equal environmental protection stand-
ards and thus economic integration, or to protect equal standards from
erosion, where already in existence. This aspect of the proposals also pro-
vided their chief legal justification (they were brought under Articles 100
and 235).

4784/360 OJ L188/20.
48Proposals for reductions in dust emissions were also included.
49COM 83/704 OJ C49.
50See Preamble to the Commission’s draft Directive which was appended to COM 83/704,

supra, note 49 at 2.

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The draft Directive, which was amended in 1985, 51 has still not been
adopted over five years after it was originally produced. It continues to be
the subject of fierce disagreement between Member States. Some of the
reasons for this disagreement are worth investigating.

The Commission’s proposal was that the total emissions from plant
with over 50 megawatts (MW) thermal output (i.e. mainly power stations)
should be reduced by 60 per cent in the case of SO 2 and 40 per cent for
NOx by 1995, with 1980 as the base line. 52 The methods to be used to
achieve this reduction were to be left to the discretion of individual Member
States. However, in relation to new plant, the proposal laid down mandatory
uniform limit values with more stringent limits for plants producing more
than 300 MW (large power stations).

Technologically, the proposals created few difficulties. 53 The know-how
exists to achieve the emission reductions required and West Germany is
currently retro-fitting all of its power stations with the equipment necessary
to achieve the reductions in its emissions referred to above. Few now dispute
the need for action to be taken to reduce the emissions of sulphur and
nitrogen compounds if the damage caused by acid rain is to be arrested.
The argument, largely advanced by the United Kingdom, that the link be-
tween these emissions and acid rain has not been established and that more
research is required has lost all credibility within the Community.

The main obstacle to adoption is, therefore, economic. Member States
are concerned that the financial costs of achieving the required emission
reductions will have a detrimental effect on their national economy and
competitive position. This has resulted in a remarkable and unedifying series
of negotiations in which the dimensions of the problem posed by acid rain,
and the measures required to effectively combat it, appear to have been
largely forgotten.

In early 1986, both of the key targets for reductions in emissions by
1995 were abandoned. 54 Since then, attention has been focussed primarily
on reaching an agreement on reductions in SO 2, leaving NOx emissions and

51COM 84/47 OJ C76.
52The cut proposed for dust was also 40 per cent.
53There is, however, some dispute between the United Kingdom and West Germany with
regard to catalytic flue gas treatment systems for the abatement of NOx emissions. West Ger-
many advocates their use, while the United Kingdom questions their effectiveness, and regards
them as being excessively costly.

54Meeting of the Council of Ministers, March 1986.

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EUROPEAN COMMUNITY

limit values for new plant for subsequent determination. 55 Numerous pro-
posals have been tabled in an attempt to overcome the objections of in-
dividual Member States. These have included the use of phased emissions
reductions, with the scale of cuts in the later phases being left open,5 6 and
differential cuts for individual Member States, 57 determined by reference to
various suggested criteria such as economic prosperity58 or emissions per
head of population. 59 One recent proposal, by the Belgians, 60 was made to
appease those whose emissions had fallen before the 1980 base line (mainly
the United Kingdom), and those whose emissions have risen since then due
to the commissioning of new plant (Spain and Eire). Under this proposal,
a system of emission “credits” would be granted to qualifying Member States
reducing the required emission cuts.

None of these proposals has been formulated by reference to what is
required to combat the environmental effects of acid rain. The Belgian pro-
posal, for example (which itself is a substantial improvement on some of
the earlier suggested compromises), 61 envisages cuts of only 35 per cent by
1993 and 57 per cent by 1998,62 without taking into consideration the ne-
gative impact of substantial emission credits granted to the United
Kingdom 63 and Spain.

The Council’s discussions on these proposals resumed in December
1987 on the fourth anniversary of the Commission’s original proposal, with
demands being made by Member States for individual extensions to the

55Discussions have, though, continued about the size and timetable for cuts in emissions of
NOx, on the limit values to be imposed in respect of new plant, and upon the size of plant to
be covered by any proposals. Unfortunately, disagreements remain on all of these matters, as
they do in relation to reducing emissions of SO 2.

56There was strong disagreement about the need for the deep levels of cuts being proposed
in the later phases. It was therefore felt that more progress might be made on the urgent need
for agreement on short and medium term cuts, if proposals for the longer term were put to
the side to be resolved at a later stage.

57This was first proposed by the Dutch at a meeting of the Council of Ministers in March
58The criterion of economic prosperity was proposed by the Dutch at the meeting of March

1986.

1986.

59This was a proposal of the United Kingdom made at a Council Meeting in November
1986. The United Kingdom also wanted the reductions to apply to emissions from all sources,
rather than just from large plant.

WrThis proposal was advanced at Council Meetings in March and May 1987.
6″Under the proposal of the United Kingdom of November 1986, for example, reductions
of only 30 per cent by 1995 were involved. An eventual reduction of 60 per cent was also
included, but no date was set, and the year tentatively suggested was 2010!
62These are Commission estimates. See (1987) 145 ENDS Report at 20.
63As a result of such credits, the reductions required were lowered in the case of the United
Kingdom from 35 to 26 per cent and from 57 to 46 per cent by 1993 and 1998, respectively.

REVUE DE DROIT DE McGILL

[Vol. 33

deadlines 64 and for financial assistance from the Community to meet the
cost of compliance. 65 No agreement was reached and at a subsequent meet-
ing in March 1988 the deadlock continued.

The history of these proposals provides a powerful illustration of the
way in which economic self-interest can undermine and marginalize both
concern for the environment and the larger objective of economic integra-
tion within the Community. Ironically, however, the very existence of the
draft Directive demonstrates the potential which exists for the environment
to benefit where its interests coincide with those of economic integration.
Whether this potential can ever be realized in relation to this Directive
remains to be seen.

2. Motor Vehicle Exhaust Emissions

Motor vehicle exhaust fumes contain, among other things, carbon mon-
oxide (CO), unburned hydro-carbons (HC) and nitrogen oxide (NOx). 66
These emissions are injurious to health and contribute to photochemical
smog. It is their major contribution to the creation of acid rain, however,
which is currently causing the most concern in Europe.

In the early 1970s the European Community recognized that if some
Member States were to impose more stringent measures than others to
control these emissions, this would create barriers to the free trade in ve-
hicles, thus prejudicing the creation of a common market. Accordingly, the
Community adopted a Directive in respect of petrol-engined vehicles that,
inter alia, set limit values for emissions of CO and HC.67 A subsequent
Directive in 1977 imposed limit values for NOx emissions, 68 and three other
Directives, the last in 1983, successively reduced the emission limits spec-
ified.69

These Directives merely followed advances in engine technology, and
the actual limits were simply copied from agreements reached amongst a
larger group of nations in the UN Economic Commission for Europe. The

64Requests for extensions of the deadline were made by the United Kingdom, Spain and
Italy.65The request for financial assistance was made by Spain.
66The exhaust fumes also contain lead, if leaded petrol is used. However, lead in petrol is

being phased out in the Community. See Directive 85/210 OJ L96/25.

67Similar Directives generally exist in relation to diesel engines and, for the sake of simplicity,

the paper therefore concentrates on petrol-engined vehicles only.

6877/102 OJ L32/32.
6974/290 OJ L159, 78/665 OJ L223/48 and 83/351 OJ L197.

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EUROPEAN COMMUNITY

Directives were, therefore, little influenced by environmental considera-
tions. 70 Moreover, because the Directives were designed primarily to en-
hance economic integration through the removal of barriers to trade, it was
not necessary to make compliance with limit values compulsory. The only
obligation placed on Member States was not to introduce values more strin-
gent than those contained in the Directives. Car manufacturers which re-
spected the limit values set out in the Directives were therefore assured an
opportunity to market their vehicles anywhere in the Community. In the
absence of these measures, car manufacturers could have faced continually
changing limits from State to State which, whether intended to do so or
not, would have had the effect of non-tariff barriers to trade.

This comparatively lax approach to emission control would probably
have continued had it not been for the growth of the acid rain problem,
which prompted new proposals from the Commission involving substantial
reductions in emissions from existing levels, and limit values similar to
those already in existence in the United States.71 These proposals were the
first to consider the genuine demands of environmental protection, rather
than merely what engine technology allowed and, for this reason, they en-
visaged the use of “add on” catalytic converter technology. Three-way cat-
alytic converters are standard for new cars in the United States and Japan,
where over 100 million are now fitted with them, but their use in Europe
had not previously been seriously considered.

Despite the attention devoted in these proposals to environmental
needs, the legal justification for this development in emission control policy
rested on Articles 100 and 235, thus recognizing the continued role of the
policy in promoting economic integration. The language of the draft Di-
rective, like that of earlier Directives, also suggested that economic inte-
gration remained an important consideration. In particular, the Directive
continued the practice of expressing limit values in terms of the maximum
stringency which Member States could demand before cars could be mar-
keted in their countries. While this approach remained adequate to secure
integration of markets, as will be explained below, effective protection for
the environment demanded the expression of limit values as fixed and com-
pulsory minimum, as well as maximum, standards.

The Commission’s proposals were strongly supported by a number of
Member States, particularly West Germany, but were vehemently opposed
by others, notably the United Kingdom. There were essentially three ob-
jections to the proposals. First, it was argued that the cost to the consumer

70The partial exception was the 1983 Directive, which was adopted to take account of the

increase in traffic density in highly urbanized areas.

71COM 84/226.

McGILL LAW JOURNAL

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of using catalytic converters would be too high. Estimates of between 500
and 1000 were mentioned, though experience has shown that the actual
cost is about 400.72 Even so, this constitutes a substantial percentage in-
crease in the price of some of the inexpensive cars on the market.

Second, in relation to sales of small cars, it was feared that Japanese
manufacturers, who are well accustomed to working to United States emis-
sion standards, would be given a substantial advantage. Small and inex-
pensive cars constitute a substantial segment of the European car market
and are the life blood of volume car manufacturers in Italy, France and the
United Kingdom. Yet in designing cars for the European market, these
manufacturers have given no consideration to catalyst technology. The im-
mediate cost implications for European manufacturers of equipping small
cars with this technology would be greater than for their Japanese compet-
itors.

The final objection was to the use of catalytic converter technology at
all for the control of vehicle exhaust emissions. One reason for this was
doubt about their reliability and continuing effectiveness, particularly in
light of the speed limits and driving conditions of Europe.73 The primary
reason, however, was that Europe’s volume car manufacturers believe that
catalytic converters are “dead-end technology”, 74 favouring instead the use
of “lean burn engines”, which also provide higher fuel efficiency.75 The
Commissions’s proposals threatened the continued development of lean
burn engines which, unlike catalytic converters, could meet neither the limit
values envisaged nor the timetable for implementation. In essence, there-
fore, what lay behind opposition to the Commission’s proposals was the
concern of Member States with volume car manufacturers on their territory
to protect their industries and their economic self-interests.

In March 1985, following protracted negotiations, the Council finally
agreed on a compromise solution, subject to reserves from two Member
States. 76 In a departure from tradition, it was decided to split the European
car fleet into three categories –
according to
engine size, making it possible to impose different limit values and appli-
cation dates for each category. Details of actual values and dates (which

small, medium and large –

72See (1987) 146 ENDS Report at 10.
73Such doubts were largely based on evidence from North America and on projections of
how the technology might function under European driving conditions. See, however, ibid.,
for recent evidence which appears to have removed most of these doubts.

74See J. Griffiths, “Lean Burn v. Catalysts: The Car Emissions Argument Goes On” [London]

Financial Times (22 March 1985) 2.

75Note, however, that lean burn engines will generally require oxidation catalysts to remove

hydro-carbons. These are, however, much cheaper than three-way catalytic converters.

76The reserves were entered by Denmark and Greece.

1988]

EUROPEAN COMMUNITY

were not agreed upon until several months later), and the equivalent United
States values, for comparison, are given in Table 2.

Emission Limits’ for Petrol Engined Vehicles (Grams/Test 2)

TABLE 2

Small

Up to 1.4 litres

Medium

1.4 – 2 litres

Large

Over 2.0 litres

U.S. equivalent

for all cars
(estimated 3)

CO
HC + NOx
NOx
HC

Date of
Application
New models
All new
vehicles

45
15
6

30
8

25
6.5
3.5

16
4.6
2.4
2.2

1.10.90

1.10.91

1.10.91

1.10.93

1.10.88

1.10.89

Notes
1. The emission limits represent maximum stringencies. Member States may allow higher

emissions but must not require lower ones.

2. This refers to the mass in the test procedure laid down by Directive 70/220.
3. These figures are themselves higher than the limits now being met by new cars on the United

States market.

The limits set for cars over 2 litres can only be met by fitting them with
three-way catalytic converters. However, the extra cost of this to the con-
sumer represents a relatively small proportion of the purchase price for a
car in this category. Few technical difficulties arise, since most manufacturers
producing cars of this size have for a long time been fitting them with
catalytic converters for the lucrative United States market.

The limits for cars under 1.4 litres are only about half those for large
ones, yet this category of cars accounts for approximately 50 per cent of
current HC and NOx emissions in Europe. The emissions limits were set
according to present “state of the art” engine technology, so that the in-
stallation of catalytic converters will not be required. Although the Com-
munity is currently considering a further tightening in emission limits for
cars in this category beginning in 1992, the negotiations are deadlocked and
it is very unlikely that any reduction which would necessitate the use of
catalytic converters will be agreed upon. European car manufacturers have,
therefore, been successful in securing protection from their Japanese com-
petitors.

REVUE DE DROIT DE McGILL

[Vol. 33

An agreement on medium-sized cars from 1.4 – 2 litres, which account
for sixty per cent of all European sales, proved the most difficult to achieve.
The limit values and the application dates can obviously be met by using
catalytic converters. But, by the time the application dates are reached, it
may be possible for manufacturers to achieve the emission limits using “lean
burn” engines. 77 This keeps alive the lean burn development programme
favoured by most manufacturers and offers the possibility of avoiding the
higher cost of using catalytic converters.

It can be seen that this compromise agreement protected the European
car industry and secured the economic interests of affected Member States.
But where did it leave the environment and the battle against acid rain?
Robin Grove-White, Director of the Council for the Protection of Rural
England, commented that following the agreement

[e]nvironmental priorities are running a rather poor second, if not third, against
all the horse-trading which has gone on on industrial and political grounds. 78

The broad aim of the Commission’s original proposals had been to bring
European emission standards in line with those in force in the United States.
But by the time of the outline compromise in March 1985, the aim had
become to set limit values which would have the same effect on the envi-
ronment as those in force in the United States. A few months later, when
the actual limit values were agreed upon, this statement itself had been
reinterpreted to mean that the European Community’s car fleet, when fully
complying with the limits set, would emit no more NOx than the car fleet
of the United States. 79 The actual effect that this level of emissions would
have on the environment is unclear. What is clear is that even this objective
will not be met by the limit values which have been agreed upon. This is
because the European Commission’s calculations assume that Europe’s car
population and mileage travelled will remain constant, whereas present pre-
dictions are for substantial increases in both.80 As a result, one expert has
predicted that eventual reductions in NOx emissions are likely to be in the
order of 20 per cent of existing levels, rather than the 50 per cent claimed
by the Commission.8′

77Oxidation catalysts will also be required. See supra, note 75.
78ENDS Report, supra, note 72 at 9.
79The United States car fleet emits about 1.5 million tonnes of NOx per year, while the

Community’s car fleet emits about 3.2 million tonnes.

8OVehicle miles in the United Kingdom are expected to increase by up to 50 per cent by the
year 2000, while the Dutch car fleet, for example, is expected to grow by between 30 and 50
per cent by 2010.

81This prediction was made by an official from the Dutch Environment Ministry speaking
at a conference in London on “The Clean Car: A Challenge for Europe”, which was organized
by the European Environmental Bureau and was held on 12 March 1987.

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Emission reductions of this order of magnitude are a very long way
from the Commission’s original aim to match United States standards. They
are also in stark contrast to the policy being followed by a group of countries
who are members of the UN Economic Commission for Europe, but who
do not also belong to the European Community. The “Stockholm Group”
(Sweden, Norway, Austria and Switzerland) require “state of the art” emis-
sion standards equivalent to United States limits for all vehicles, irrespective
of engine size. This can only be achieved by fitting three-way catalytic con-
verters.

The recent history of the Community’s efforts to control vehicle emis-
sions provides further clear evidence of how the economic interests of in-
dividual Member States (in this case those playing host to volume car
manufacturers) can prevail over the demands of environmental protection.
However, insofar as an aim of the policy was to preserve intact the economic
integration which had been achieved by the harmonizing effect of earlier
Directives, the record is more encouraging. Viewed from this perspective,
the actual emission limits are immaterial. What is important is that they
exist and that manufacturers know the maximum emission control stand-
ards which any Member State can demand. Provided they comply with
these standards, they will have a right of free access to all the Community’s
markets. Measured against these criteria, the compromise agreement was a
success.

That the needs of economic integration can be met, while so little is
being achieved for environmental protection, illustrates a point made earlier
in this paper when it was suggested that the demands of each are not always
coterminous. If the former is allowed to predominate, the rhythm of progress
of environmental protection policy will be linked to and driven by the
economic agenda of the Community. Similarly, the content of environmental
policy will be conditioned by the needs of economic integration. The present
policy is potentially disastrous for the environment, not only because ex-
pressing limit values in terms of maximum stringencies places a ceiling on
the emissions reductions allowed. This approach also enables Member States
to ignore with impunity the new limit values and retain instead their existing
emission standards, or adopt any other levels desired, provided that they
are less, rather than more, stringent than the agreed limit values. Indeed,
the implementing Directive will, like the earlier Directives on vehicle emis-
sion levels, be known as a measure of “optional harmonization”, thus high-
lighting its true economic nature.

This major flaw in vehicle emission control policy illustrates well the
danger of grafting environmental objectives onto policies which rely for

McGILL LAW JOURNAL

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their legal justification82 and have, hitherto, had as their primary aim, the
securing of economic integration. Immediately after the compromise agree-
ment had been reached, three of the larger Member States (Italy, France and
the United Kingdom) indicated that they might ignore some or all of the
new limit values. The United Kingdom has subsequently confirmed that it
will not implement the new limit values for cars with engine capacities over
2 litres by the dates provided in the Directive. The United Kingdom has
also indicated that it is only prepared to implement the new limit values
for smaller medium cars, provided that France, Italy and Spain agree to do
likewise. For the car manufacturers, this is not a serious problem. Provided
that they are able to comply with the new limit values, where Member States
require it, they are guaranteed a Community-wide market for their cars. No
more can be asked of them and the primary requirement of economic in-
tegration is satisfied.83 However, where Member States continue to set emis-
sion standards less stringent than the limit values, manufacturers will have
the option to save costs by, for example, not fitting a catalytic converter. It
is an option which they are certain to exercise. As a result, even the predicted
20 per cent cut in NOx emissions may be in question, making it difficult
for the policy to maintain its credibility.

While some Member States have been indicating their unwillingness
to enforce the agreed limit values, Denmark has been resisting formal adop-
tion of the Directive on the ground that it is too weak. It is mainly Denmark’s
reserve that has prevented implementation of the policy since 1985.84 The
Danes argue that, on environmental grounds, they need to have the ability
to impose more stringent emission limits for the small cars which dominate
their fleet. Their position illustrates Community environmental policy at
its worst. While Denmark’s neighbours, Norway and Sweden, are cutting
emissions to United States standards, its membership in the Community
means that, if the present policy is implemented, it may be forced to accept
much higher limits. Here we have an example of how the demands of
economic integration, when incorporated in a Community environmental
policy, can work in direct opposition to environmental protection.

82The policies are elaborated under Article 100.
83Economic integration policy would, of course, benefit further from a policy based on uni-
form fixed and compulsory limit values, rather than one based on maximum permissible
stringency. Indeed some car manufacturers are now recognizing that differing emission stand-
ards will increase costs and create additional production and marketing difficulties. It is also
likely that these costs and difficulties will fall disproportionately on some manufacturers as
against others. The fact remains, however, that the Directive is of great benefit to the car
industry. All manufacturers may now tailor their products to its requirements, confident in the
knowledge that this will guarantee them access to all the Community’s markets. In contrast,
the Directive guarantees the environment nothing at all.

“The Greek reserve, which was aimed at securing Community money to pay for air pollution

abatement measures in Athens, was of less significance.

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The impasse reached as a result of the Danish reserve was finally broken
at a meeting of the Council of Ministers on 21 July 1987. At the meeting,
Denmark had the (from their point of view, very dubious) privilege of being
responsible for the Commission’s first use of the qualified majority voting
provisions contained in Article 100A of the Treaty of Rome, as amended
by the Single European Act.85 As was customary, the draft Directive had
originally been issued under Articles 100 and 235. Following the coming
into force of the Single European Act on 1 July, the Commission had the
option to reissue it under Article 130S, as environmental policy, or use
Article 100A, on the basis that it had as its object “the establishment and
functioning of the internal market”. Not surprisingly, the Commission chose
the latter course, in order to take advantage of the majority voting proce-
dures available. In doing so, however, they underlined once again the fun-
damental nature of the policy as economic rather than environmental.

Under the new legislative procedures introduced by the Single Euro-
pean Act, the policy agreed upon by a majority of the Council was subse-
quently approved by the European Parliament, and has now been adopted.
However, Denmark has taken further action. Paragraph 4 of Article 100A
provides that:

If, after the adoption of a harmonisation measure by the Council acting by
qualified majority, a Member State deems it necessary to apply national pro-
visions on grounds of major needs referred to in Art. 36, or relating to the
protection of the environment or the working environment, it shall notify the
Commission of these provisions.
The Commission shall confirm the provisions involved after having verified
that they are not a means of arbitrary discrimination or a disguised restriction
on trade between Member States.
[T]he Commission or any Member State may bring the matter directly before
the Court of Justice if it considers that another Member State is making im-
proper use of the powers provided for under this Article.

Relying on this provision, Denmark has indicated to the Commission
that it intends to adopt stricter emission standards because they are nec-
essary for the protection of its environment. The Commission will now take
Denmark to the European Court of Justice for “making improper use of
the powers provided for under” Article 100A by imposing emission stand-
ards which represent “arbitrary discrimination or a disguised restriction on
trade” in cars between Members of the Community. The outcome is un-
certain, but there is no doubt that it will serve to highlight the conflict which
can arise between economic integration and environmental protection, when
both are stated to be the objects of Community policy.

85In fact, no vote was taken, it being apparent that, with only Denmark and Greece opposing,

the necessary qualified majority would be secured.

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III. Analysis

The above examples offer some insight into the complexity and dy-
namics of the relationship between environmental policy, economic inte-
gration and the economic self-interest of Member States. They demonstrate
how both environmental policy and economic integration policy can, on
occasion, be thwarted by the economic self-interest of one or more Member
States, and how environmental protection policy can become lost in a battle
between opposing economic forces. In particular, they show how environ-
mental policy develops within a framework designed to serve the needs of
economic integration, how this can influence the content of Directives on
the environment and how environmental policies are justified and promoted
according to their ability to effect harmonization of the European economies.

If one looks at the affinity between environmental policy and economic
integration policy from an environmental perspective, it is clear that the
basic imperative of economic integration did not only provide a legal basis
for environmental policy prior to the Single European Act. More impor-
tantly, it has played a major role in providing the impetus needed to develop
an environmental policy, although this does not, of course, say anything
about the quality of that policy. Looking to the future, the availability of
qualified majority voting procedures for measures promoting economic in-
tegration is likely to provide added impetus to the development of envi-
ronmental policy, as the recent moves on the vehicle emission control policy
demonstrate.8 6

This said, however, it is important to challenge the assumption which
often appears implicit in much of the discussion of European Community
environment policy, that the environment can only benefit from greater
harmonization and economic integration. As our examples show, the in-
terests of the two are not invariably the same, and this must be recognized
and taken into account if environmental policy is not to suffer, as it has in
the case of the vehicle emission control policy. Dangers of this kind are
latent in much of the environmental policy which is developed with a view
to promoting economic integration. Thus, if one looks again at the proposals
for large combustion plants, or even the Directive on dangerous substances
in water, one can see that any level of reduction in emissions, or any limit
values, satisfy the needs of economic integration, provided they are uniform.
For environmental policy, on the other hand, the absolute amount of any
reduction and the limit values set may be critical. Difficulties of this nature
may be overcome if the needs of both types of policy are recognized and

86But note the reservations expressed supra, note 23.

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accepted. Clearly, an absolute reduction in emissions, for example, in an
amount required to meet the genuine needs of environmental policy can
also be applied in a uniform manner across the European Community to
further the ends of economic integration.

In other circumstances, however, economic integration policy and the
needs of the environment may be contradictory. One example of this, which
has not yet been resolved, concerns an aspect of the Community’s policy
on waste. In order to reduce the environmental problems caused by dis-
posable bottles and cans for beverages, as well as to conserve energy and
natural resources, the Community has adopted a Directive which encourages
re-use and recycling of beverage containers.8 7 Under the Directive, action
programmes must be prepared which, inter alia, encourage and facilitate
greater use of refillable containers. Preceding the adoption of this Directive,
Denmark had banned completely the use of non-returnable containers for
carbonated soft drinks and beer. The ban, which does not apply to exports,
was enthusiastically supported by the Danish brewing industry, because the
extra cost of transporting the empty bottles back made it uneconomic for
German breweries to export bottled beer to Denmark. 88 Complaints from
the German brewers have led to Denmark’s ban being challenged by the
Commission as a breach of Article 30 of the Treaty, in the form of a non-
tariff barrier to trade. 89 Yet, their policy might fairly be regarded as an
enthusiastic implementation of the Directive on beverage containers.

As noted above, another negative effect of the relationship between
economic integration and environmental policy, when viewed from the per-
spective of environmental policy, is that the demands of environmental
protection tend to become lost in a dispute about how far economic inte-
gration should go, and to what extent Member States should be permitted
to hold on to any competitive advantages that they may have. Take, for
example, the dispute between the proponents of limit values and quality

87Directive 85/339.
88There is nothing, however, to stop German brewers either bottling, or bottling and brewing,

in Denmark itself, provided returnable bottles are used.

89See ECJ – Case 302/86. The Irish Government has now also proposed restrictions on the
use of cans and plastic containers for beer, cider, wine and soft drinks. These proposals have
been made in direct response to the Directive on beverage containers. Details of the precise
bans which are proposed are contained in the Irish Government’s draft programme for im-
plementation of the Directive. The Industry Committee for Packaging and the Environment
(INCPEN) in Britain is now pressing the Commission to disallow the Irish draft programme
on the basis that “[i]fthe programme was to be accepted by the Commission, an environmental
protection Directive would, in effect, be the vehicle used for erecting further barriers to intra-
Community trade, despite the EEC’s very commitment to the dismantlement of non-tariff
barriers”. See Memorandum submitted by INCPEN to the House of Lords Select Committee
on the European Communities on the Fourth Environmental Action Programme (8th Report
1986/87 HL 135 at 116).

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objectives during the negotiations that led to the Directive on dangerous
substances in water. The eight Member States favouring limit values argued
that limit values were necessary to ensure that industries in each Member
State bore similar pollution control costs. The United Kingdom, however,
favoured the use of water quality objectives, for reasons of economic self-
interest. The United Kingdom’s rivers are short and fast and its coasts are
washed by a turbulent and tidal sea. The same standard of water quality
likely to be achieved on the Continent of Europe by the use of the limit
value approach could, therefore, often be achieved in the United Kingdom
by the imposition of significantly more generous discharge limits, with con-
sequential savings in industrial costs. For the United Kingdom to have
agreed to mandatory limit values would, therefore, have been to surrender
the significant competitive advantage offered by its fortuitous geographical
circumstances. It should be remembered that while Britain may enjoy a
comparative advantage in respecting water quality objectives, other geo-
graphical factors operate to the advantage of different Member States. Thus,
German industry benefits, in terms of transport costs, from its proximity
to continental markets and, to take a more facetious example, Italian lemon
growers enjoy the benefits of a warm sun!90 However, such an economic
justification for the United Kingdom’s water pollution policy takes us a long
way from the needs of the environment. This is not to say that economic
and environmental issues can, ultimately, be separated. But, this accepted,
it is surely regrettable that the economic arguments should systematically
predominate over basic environmental concerns. For example, in choosing
between the use of fixed limit values and water quality objectives, environ-
mentalists would no doubt argue that one of the most important consid-
erations was the relative effectiveness of the two approaches. Could water
quality objectives be relied upon to guard against the unquantifiable, indirect
and long-term effects of discharging dangerous substances into water? Ques-
tions of this kind involve matters of pollution control theory, which also
need to be addressed, but which tend to be overwhelmed by economic
considerations.

Similar observations can be made about the Community’s efforts to
control air pollution caused by large combustion plants. Here, Member
States, threatened by proposals for uniform cuts in emissions in the pro-
motion of competitive equality, largely ignored environmental considera-
tions for reasons of economic self-interest. For the United Kingdom, the
issue again concerned the preservation of the competitive advantage arising
from its geographical location. Being an island off the coast of Continental
Europe, exposed to Atlantic weather systems and westerly winds, the prob-
lems of dispersing air pollution have hitherto been less acute than for other

90This illustration is not original, having been used by Haigh, supra, note 2 at 36.

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EUROPEAN COMMUNITY

Member States, and the costs correspondingly lower. Acceding to the de-
mands for substantial uniform reductions in emissions, in order to promote
economic integration, would have meant surrendering this advantage. Log-
ical though this argument was in economic terms, what it ignored was the
serious environmental problem of long range, transboundary air pollution.

It would, of course, be wrong to blame the affinity between environ-
mental policy and economic integration policy for these failings. Even if
there were no association between the two, environmental policy would still
be liable to be emasculated by the economic self-interest of Member States
and their unwillingness to assume the costs of effective environmental po-
licy. But, removing the economic integration dimension would, at least,
make it possible to assess the costs and benefits of environmental policy
free from extraneous factors. It would also prevent Member States, partic-
ularly the United Kingdom, from rejecting environmental policy initiatives
on the ground that they constitute unnecessary harmonization measures
that threaten national sovereignty when, in truth, they are rejected largely
for reasons of economic self-interest.

There is no doubt, however, that insofar as it was the objective of the
environmental program to advance the economic integration of the Com-
munity, this has been successful. The development of a European environ-
mental policy has spawned a wide range of Directives that have harmonized
varying national laws and policies. Indeed, as we have noted, the main legal
foundation for most of these measures has been Article 100, a provision
concerned exclusively with promoting economic integration.

However, economic integration policy too can suffer from its associa-
tion with environmental policy, where the interests of the two are at vari-
ance. Referring again to the Directive on dangerous substances in water, we
can see that, while it can at least be argued that water quality objectives
may be useful environmentally,9′ they certainly do nothing to standardize
industrial costs and promote equal competition. Similarly, if an agreement
on air pollutant emissions from large combustion plants allowed for sub-
stantial differences in the reductions to be achieved by individual Member
States, this might be environmentally sound, provided the overall reduction
was sufficient. In terms of economic integration, however, it would introduce
new competitive distortions.

There are other environmental Directives that leave a large amount of
discretion in the hands of Member States. The effect of this may be to permit

91See the earlier discussion in text accompanying note 37.

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varying implementation measures, some adding significantly to industrial
costs or otherwise distorting competition and the free movement of goods.
The Danish law banning “one way” beverage containers is a case in point.

The above examples have also revealed how environmental policy and
the collective Community goal of economic integration has been under-
mined by the economic self-interest of Member States.92 Concerns about
the economic costs of environmental policy initiatives are frequently in-
voked. Calculations concerning the direct and indirect effects of proposals
on the productivity and competitiveness of home industries, as well as their
likely impact on jobs, exert a powerful influence upon the positions adopted
by individual Member States. Major industrial organizations also apply
relentless pressure at both the domestic and community level in order to
protect their economic interests. By objecting to Community environmental
policy initiatives, a Member State may not only avoid a deterioration in its
competitive position, it may obtain significant economic advantages. Com-
munity initiatives on environmental matters are often taken under pressure
from Member States who, because of domestic problems and internal po-
litical pressures, have already begun to act on a national level, thus imposing
additional financial burdens on their industries and economies. Where this
has happened, there is a great temptation for Member States with decaying
or fledgling industries and inferior productivity records, to exploit the com-
petitive advantage and resist any moves to establish a general Community
policy. A good example of this is the twin track decision of West Germany
to retro-fit all its large and medium sized power stations with gas flue de-
sulphurization equipment and, at the same time, to press in the Community
for major reductions in SO 2 emissions of all Member States. This decision
has imposed a major financial burden on West German industry, which can
only work to the advantage of competitors who have not had to incur similar
costs. Another, perhaps more alarming, example of this kind, concerns the
disposal of dangerous and toxic wastes. In the absence of adequate Com-
munity Directives on this problem, Member States such as Germany, Bel-
gium, Holland and France have imposed strict controls on the disposal of
these types of waste, thus greatly inflating treatment and disposal costs. The
United Kingdom, on the other hand, has done virtually nothing. 93 The result
has been an eightfold increase in the tonnage of such waste imported into
the United Kingdom for treatment and/or disposal, in a period of only two

92Cleary, other factors play a part. These may include differing national traditions and ways
of doing things but, more tangibly, dislike of State intervention and a desire to leave things to
market forces may play an important role.
93This has alarmed a number of local authorities and even the Government’s own Hazardous

Waste Inspectorate. For further details see (1986) 148 ENDS Report at 6-7.

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years.9 4 The actual and potential economic benefits to the United Kingdom
of this trade in dangerous and toxic waste are considerable. The effect is to
create a strong economic disincentive for the Government of the United
Kingdom to either strengthen domestic law, or to agree to stricter Com-
munity-wide controls. There is no sign yet that conflicting pressures from
environmentalists will be powerful enough to overcome this major disin-
centive to constructive action.

It would be wrong, however, to assume that economic self-interest will
always work to the disadvantage of environmental policy. It is rarely the
case that Member States actively pursuing environmental protection policies
are doing so for environmental reasons alone. Certainly, environmental
initiatives are often taken in response to political pressure, but the impor-
tance of economic considerations when it comes to having these policies
implemented should not be overlooked. West German environmental policy
again provides a good example. The German Government firmly believes
that its environmental programme will, in the long term, bring substantial
economic as well as environmental benefits. 9 The decision to retro-fit power
stations with emission control technology and to require substantial reduc-
tions in emissions from industry generally has given a major boost to West
Germany’s pollution control industry which, because of the advances it has
made, can be expected to benefit substantially from exports as other coun-
tries decide, or are forced, to take similar action. Of more significance,
however, is that rather than simply fitting emission control devices, West
German industry is responding to demands for tighter controls by investing
in new plant and machinery with “state of the art” pollution control tech-
nology built in. The Government’s policy is, therefore, giving a major im-
petus to industrial investment and modernization. Research done for both
the West German Government and German industry also suggests that the
net effect of the country’s environmental policies is likely to be favourable
in terms of job creation. 96

94Between 1984 and 1986 imports of United Kingdom classified “special” waste, which must
be notified, increased from 5,000 tonnes to 40,000 tonnes. However, many other substances
are regarded as hazardous on the continent, but not in the United Kingdom, with the result
that they are not notifiable. Estimates by the Department of the Environment are that at least
130,000 tonnes of this type of waste were imported in 1986 and, since then, the evidence from
disposal companies suggests that even larger increases have occurred. For details, see (1986)
148 ENDS Report, ibid.

95Information here, and below, is based upon interviews with officials of the West German

Interior Ministry (now Environment Ministry) in Bonn conducted in the Autumn of 1985.

96See “Environmental Policies: A Source of Jobs?” in Environment and Economics (Paris:
OECD, 1985) 91 at 93. See also: R.U. Sprenger & G. Knaadgen et al., Struktur undEntwicklung
der Umweltschutzindustrie in derBRD (Berlin: Erich Schmidt Verlag, 1983); and R.U. Sprenger,
“Environmental Technology” (1986): 1:1 European Env. Rev. 17 at 19.

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Many environmentalists would regard the West German approach to
be relatively enlightened. However, the relative strength of West German
industry means that the costs of environmental programs can be absorbed
without seriously eroding its competitive position in the European Com-
munity and beyond. One might also wonder whether the West German
Government would be so enthusiastic about implementing environmental
measures which have few, if any, economic benefits. It is worth noting, for
example, that West Germany is the only country in the Community which
has no speed limits on its motorways. Despite substantial public support
for a speed limit, and evidence of the damaging effects in terms of higher
exhaust emissions which contribute substantially to acid rain and forest
“die back”, the West German Government continues to resist proposals to
introduce speed limits. It appears that the Government has been persuaded
by the German manufacturers of larger cars (Mercedes, BMW) that speed
limits would lead to a substantial drop in sales and profitability.

Conclusion

What emerges from this paper is a picture of European environmental
policy caught up in a clash between the movement for economic integration
in the Community, and the economic self-interests of Member States. More
often than not, environmental policy finds itself allied with the forces for
economic integration, on which it has, traditionally, had heavily to rely for
its legal foundations. Economic integration is not, however, always the friend
of environmental policy, as some of our examples have shown.

Recognition of the comparative impotence of environmental policy in
the world of economics should not, however, lead us to the conclusion that
Europe’s environmental programmes are worthless or unnecessary. However
modest the achievements to date may have been, it is doubtful if even this
much would have been gained had Member States been left to their own
devices. It is also unlikely that individual action would have been as effec-
tive, given the need for many environmental policies to be international in
character if they are to succeed. In this respect, the European Community
has the potential to fulfil a valuable function by bringing together a group
of nations in pursuit of common environmental objects. In practice, action
may be required on an even wider geographical basis involving, for example,
the rest of Scandinavia or Eastern Europe. 97 Here though, the contribution

97Worldwide action might also be required. One example is the growing evidence of damage
to the ozone layer caused by chlorofluoro-carbons (CFCs), which may necessitate world-wide
agreement on the elimination of production. A start was made on this at an international
conference in Montreal, Canada in September 1987 when some cuts in production were agreed
upon.

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539

that can be made by the Community, if it has agreed on a common position,
is also of great value, and may be decisive. The lingering question is whether
economic considerations will enable the Community to carry out these func-
tions with sufficient regularity and vigour to make a real impact on the ever
growing threats to the environment.