This paper provides a review and assessment of the debate over environmental federalism-the issue of the roles of different levels of government in environmental management. The paper begins with the presentation of three benchmark cases that provide a framework for thinking about the issue. It then offers a review, first of the theoretical literature and second of some new, provocative empirical literature on the race to the bottom. The paper contends that there remains, under certain circumstances, an important role for decentralized government in the setting of environmental standards and the design of regulatory programs. The central government, in addition to setting standards for "national" pollutants, has a fundamental contribution to make in supporting research in environmental science and pollution control technology and in providing needed information and guidance to state and local governments.