Spillovers among 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 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. Given a national policy toward a public good, differences in preferences across jurisdictions may push national policy toward a quantity instrument rather than a tax instrument. Finally, the lack of 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.