In this dissertation, I study empirically society’s ability to manage some of the most pressing environmental concerns today: climate change and water scarcity. The first paper explores how the two issues conflict. Investment in groundwater extraction improves California farmers’ resilience against drought. However, the unpriced consequences of that adaptation choice outweigh the private benefits of the investment. In the second paper, I study the value of groundwater, and showthat groundwater management institutions fail to generate the most value out of the scarce resource. In the third paper, my co-authors and I examine the effectiveness of the US government’s spending on climate change adaptation, noting that there is a tradeoff between sending money to places that will be most impacted, and to places more economically disadvantaged.