Decentralized environmental governance theory suggests that decentralization can produce better environmental performance mainly because lower-level governments are closer to the people and environmental issues and are considered more legitimate than the national government. However, China's decentralized system of environmental governance has been often regarded as a key factor in creating pollution problems rather than in solving them. To explain this puzzle, this article, using Blame Avoidance Behaviour in government theory as a theoretical framework, examines how blame avoidance behaviour shapes China's decentralized system of environmental governance from three perspectives: first, actors and the chain of blame shaped by the hierarchical power structure among environmental policymakers and implementers; second, the strategies of discursive domination and decentralization for blaming environmental problems on local officials; and lastly, the contextual factor of “hierarchical governmental trust.” Drawing on documentary discursive analysis and extensive fieldwork, this article suggests that the dysfunction of China's decentralized environmental governance structure may in fact be an outcome of a blame-shifting game between central and local governments.