Ecological subsidiarity is the corrective to the accounting-boundary problem: if local success turns destructive when responsibility is drawn smaller than consequence, then jurisdiction has to be sized to the consequence. The rule is that a solution must be governed at the smallest scale that contains both its benefits and its significant costs — so household matters can stay with households, but a problem whose costs cross borders is not adequately governed nationally. Some ecological goods simply cannot be produced locally at all; they require coordination at the scale where the externality actually appears, which is why one actor’s restraint is fragile when rivals can take the advantage, and why a planetary externality cannot be solved inside one city.
It extends ordinary subsidiarity — decisions at the lowest level capable of carrying their consequences — with an explicit externality criterion: jurisdiction should rise to the scale of the externality. That phrasing does double duty, guarding against two opposite errors at once: centralizing everything (which introduces distance from consequence) and pretending every problem is local (which lets consequence escape the boundary that counts it).