This paper aims at making a conceptual and theoretical contribution to understanding problem‐solving capacity in multi‐level contexts. To do so, I use the framework of structure, agency, process, and outcome to systematically discuss how the literatures of comparative federalism and multi‐level governance define and analyze problem‐solving. In discussing these literatures, I also examine how concepts such as integration, functional differentiation, self‐rule, and shared‐rule have important implications for problem‐solving. Policy challenges, such as climate change, require problem‐solving at various territorial levels. To demonstrate the insight from the two literatures and to offer comprehensive theoretical implications for effective problem‐solving capacity, this paper also provides illustrative examples of climate change action and environmental policy in Germany and the EU.