Scholars of democratic experimentalism and new governance rightly criticize the static allocations of authority found in the American traditional federalism framework for its rigidity and potential to stifle innovation at the state and local levels. Nevertheless, this critique underappreciates the level of experimentation harbored by this framework, as witnessed in the dynamic interaction between the various levels of government. This dynamic interplay, which is very much on exhibit with respect to climate change regulation, is far from being devoid of new policy innovation. It also exhibits something that, in the long run, may be just as important-the adoption, at local and regional levels, of policy innovations developed at other levels, often on a national or international scale. Hence not only do we see policy innovation arising out of traditional American federalism, but also "scale innovation."This backdrop is important when exploring the best governance models for emerging environmental issues, the full scope of which are still poorly understood. Where does climate change adaptation fit? Does it illustrate the market failures and potential gamesmanship that have justified traditional federalism models, complete with a strong policymaking role for