The aim of this study is to assess the environmental policy in the federal system of Ethiopiarnthereby to analyze the state of devolution in the environmental matters with particular referencernto Batu City administration of Oromia state. Basic research questions, including the extent of thernenvironmental policy decentralization and effectiveness of environmental policy implementation,rnwhether the environmental policy is consistent with socio-cultural values of local community andrnthe challenges of managing environment in the Batu city administration of Oromia The studyrnwas carried out in Batu city administration of Oromia region. It has utilized a case study designrnand a mixed research approach. The instruments used to gather the required information for thernstudy were questionnaire, key informant interview and focus group discussion (FGD) as well asrnpersonal observation. The total number of respondents who took in questionnaire and keyrninformant interview 70 and 12 respectively; a FGD comparising eight participants was alsornconducted. The obtained data through questionnaire were analyzed through simple statisticsrnwhile those obtained through key informant interview, focus group discussion and observationrnwere interpreted qualitatively. The major findings of the study include: Niether the regional staternnor the urban local government is empowered to effectively implement environmental policy.rnThere are lack of compliance between environmental legal provision and socio-cultural values ofrnthe local community. Particularily, the development projects like floriculture have notrnimplemented the extant Environmental Impact Assessment (EIA). Consequentely, the lack ofrneffective EIA has detrimental human and other biotic life in and around Batu CityrnAdministration. Hence, it is the argument of this Thesis that environmental policy making andrnimplementation in the federation need meaningful participation of the people, devolvedrnenvironmental power for both the regional and urban local government; and effectivernimplementation of EIA by investment projects like floriculture.