The achievement of positive environmental performances at the national level could strongly depend on differences within local capabilities of both institutions and the private business sector. Environmental regulation per se (especially if set at the national level) can be a weak instrument if the institutional and business environment could not transform regulation strengths into opportunities. As well as the environmental accounting matrix for 10 air polluting emissions is now available for the 20 Italian regions (and 24 productive sectors), we have analysed which are the main drivers at the regional level promoting positive environmental performances, and which are the foremost gaps at the sectoral level which reduce the capacity to obtain them.