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This book examines the harmonization of environmental liability rules in a federal system from a law and economics perspective. The author uses public interest and private interest theories to examine at which level environmental liability rules best can be decided in a federal system. The harmonization of environmental liability rules in the European Union by means of Directive 2004/35/CE on Environmental Liability with Regard to the Prevention and Remedying of Environmental Damage induced this research. This directive gave rise to much controversy and conflict on the role of liability rules for environmental damage, and on the optimal policy level of liability rules for environmental damage in the EU. The book unravels the decision-making process behind the environmental liability directive, and the reasons and consequences of harmonization. The author examines whether the harmonization of environmental liability rules in the EU corresponds with the optimal policy level of environmen