This paper is a review of some current issues in the field of environmental federalism. Environmental spillovers among political jurisdictions are ubiquitous and likely to increase with increasing population and consumption, so the centralization or decentralization of environmental governance is of pressing concern in a world of tightly linked socio-ecological systems. Spillovers among jurisdictions play a key role in federalism analysis because they tend to reduce benefits from decentralization. Laboratory federalism, a common rationale for decentralization, has not proven successful as a model of local policy innovation, and hence has not offered much guidance on the question of decentralization. A key result in this paper is that, given a national policy toward a public good, differences in preferences across jurisdictions toward addressing that public good may push national policy toward a quantity-based regulatory instrument, such as a cap and trade program, rather than a price instrument, such as a carbon tax. Given the growing importance of human effects on the global environment, the lack of academic interaction between environmental federalism analysis and studies of adaptive governance and linked complex adaptive systems leaves both literatures incomplete. The increasing urgency of global sustainability issues argues for linking insights from environmental federalism with the literature on linked socio-ecological complex adaptive systems.