Subsidiarity, the principle which says that action should be taken at the lowest effective level of governance, is a potentially powerful concept around which a debate about the optimal assignment of tasks across different administrative levels of the European Union (EU) could be constructed. Its sudden incorporation into mainstream European discourse in the early 1990s provided an unprecedented opportunity for such a debate to take place. However, for various reasons this opportunity was spurned and subsidiarity has since metamorphosed into a technical process of legislative reform dubbed 'Better Law-Making'. By analysing recent experience in the water sector through the lens of 'new' institutional theory, the author reveals that, far from undermining the framework of EU environmental policy, instead, the reforms have led to the tightening of some existing standards, although less important issues are being devolved to national authorities. It is debatable whether the political outcomes of the reform process to date were fully expected or desired by those states that advocated greater subsidiarity in the first place. There is precious little evidence that European environmental governance has moved much 'closer' to European citizens as a result of subsidiarity.