Environmental policy, focusing on the control of pollution and on over-exploitation, easily overlooks the extensive range of interconnections between economic activities and natural systems. In this timely book, a number of specialists examine how crucial aspects of complex environmental problems and policy can be dealt with in decentralized governmental systems. Bridging the gap between the conventional environmental federalism literature and advances in environmental and ecological economics that have been made over the last two decades, this innovative book explores alternative solutions to the problem of assigning powers over the environment. It deals with important issues in environmental governance including interjurisdictional contracting, discounting, risk management, eliciting compliance, and environmental accounting - in each case concentrating on the comparative advantage of governments at different jurisdictional levels in implementing optimal policies.Offering a comprehensive approach to environmental policy, this book will be a valuable resource for researchers and students in environmental economics, environmental politics, governance and decentralization. It will also benefit practitioners and policy-makers with responsibilities over the environment.