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Diffusion of policies and institutions is becoming an increasingly relevant topic in the study of environmental politics and policies. However, the manner of dealing with diffusion is often inadequate. Many studies ignore diffusion effects altogether or take them for granted without estimating the degree of diffusion. This, however, results in inefficient and misleading conclusions. In this paper I argue that the logic of analysis needs to be modified in order to incorporate diffusion into our research models. Previous approaches in anthropology trying to solve Galton's problem in social research might offer a solution here. Drawing upon the history of anthropologists' ideas political scientists might be able to deal with diffusion in a more appropriate manner. In this paper I build on my previous studies (see for instance IO 60 (2):401-431) and apply the method of spatial lags to the area of environmental policy. This is an appropriate research field for the question at hand because it is a new policy which is exposed to domestic as well as international pressures. I estimate the effects of diffusion in two different ways. On the one hand, I focus on the level of carbon emissions as an indicator for the development of air pollution policies of the OECD countries. On the other hand, I analyze the introduction of environmental institutions in the OECD countries. By focusing on outcome and output variables the paper will give a comprehensive overview of diffusion patterns in environmental policies. ..PAT.-Unpublished Manuscript [ABSTRACT FROM AUTHOR]