Explaining the stringency of environmental policies: Domestic determinants or international policy coordination?

This paper examines how and to what extent spatial interactions among EU national governments affect the stringency of environmental policies (EP). We innovate on the literature along three dimensions: 1) we evaluate the spatial interactions across countries to assess the "interaction dividend" associated with international treaties; 2) we better examine how political and institutional variables shape EP when such interactions are taken into account; 3) we identify the type of EP for which these interactions play a more relevant role by considering for the first time the new EPS21 disaggregated indexes of policy stringency. In a sample of 21 European countries between 2000 and 2018, a benchmark model shows that, among country-specific effects, proxies for the industries' lobbying power, quality of governance, government's ideology, decentralization and the urbanization rate of voters play important roles. When the model consider spatial interactions among countries, the estimates reveal that between 1/3 and more than one-half of a country's commitment to EP can be attributed to positive spillover effects from other countries, depending on the type of policy, with more prominent effects in technology support policies. These results reinforce the need of supranational coordination through international organizations and treaties.