A crucial question for international law is how to allocate regulatory jurisdiction over transboundary problems between sovereign states. Insufficient clarity can trigger disputes such as that regarding the legality of the EU Directive that extends its ETS to all flights taking off from or landing at an EU airport, including those by non-EU carriers. This article uses this dispute as the vehicle to examine sovereignty in an increasingly interdependent world. It argues that a state’s decisional inviolability is central to sovereignty. Decisional sovereignty allows a state to regulate actors or activities with a link to its territory when these affect the state’s domestic affairs, rather than leaving the state at the mercy of an actor’s home state or of other states from the territory of which the problem emerges. Moreover, allocation of regulatory jurisdiction in conformity with decisional sovereignty reduces the incentives to free-ride on other states’ regulatory efforts and incentivizes international cooperation.
