Racing to the Top: California, the European Union and Setting Global Standards

Abstract

The “Brussels Effect” and the “California Effect” shape everything from the quality of the air you breathe to the features available on your iPhone. The European Union (EU) and California have leveraged their status as large, highly regulated economies to become global actors. As the world’s second and fourth largest economies, the EU and California have enacted policies with a ripple effect touching nearly every part of the world. This thesis examines how California and the EU unilaterally engage in global governance through their power to set strict regulatory standards. Despite their status as a subnational and a supranational state, California and the EU offer a compelling alternative at a time when the multilateral retreat and deadlock in the consensus-based United Nations system calls for a new model. By looking beyond more traditional geographic ties, such as those connecting California and Asia, and thinking in terms of economic power, a joint liberal regulatory regime led by California and the EU can shape world order. Working with other economic powers demonstrates the chance to engage in integrated and dynamic policymaking to address persistent and complex global challenges. Such opportunities to improve quality of life and wellbeing lie outside the spheres of national security, domestic policy and constitutional rights. This thesis argues for thinking in terms of economic power to find like-minded partners, whoever they are and wherever they are located. By forming unstoppable global coalitions, California and the EU can address humanity’s greatest challenges and provide a liberal alternative for a new world order in an era of geopolitical uncertainty. Building upon earlier work on the “California Effect” and the “Brussels Effect,” this thesis argues for an explicit partnership to expand the role of California and the EU in setting global standards, transforming unintentional similarities into deliberate cooperation. Drawing upon original interviews with diplomats, policymakers, regulators and legislative staffers in Brussels and California, case study analysis is conducted. Three case studies focus on vehicle emissions standards, emerging digital technologies and climate change to demonstrate the types of pressing cross-border issues which California and the EU can help solve. This is augmented by process tracing, historical background and original government documents. Since starting this thesis, at least six late-breaking developments of note have occurred: important diplomatic meetings were held, new laws were passed, court cases were filed, and new policies were proposed. To effectively shape global change, California and the EU are encouraged to form a series of institutions, modeled off the G7, to formalize partnerships with like-minded partners. Led by the two economies powerful enough to set global standards and buttressed by like-minded partners, such clubs are argued to be an unstoppable force for increasing well-being around the world. As this thesis demonstrates, building upon California and the EU’s economic power by leveraging their values and standard setting model provides a promising path for the world to coalesce around.