Climate change is having a variety of impacts on natural resources in the United States, ranging from more severe drought to increased flooding, and is altering assumptions that have been central to water resource planning and management. Congress and the Executive Office of the President have directed federal agencies to address the potential impacts of climate change. The two key federal water resource management agencies included in this review—the Corps and Reclamation—have similar yet distinct roles in managing water for a wide variety of purposes. In addition to the water management challenges posed by climate change, both agencies are dealing with aging water management infrastructure with limited funding for maintenance and construction. According to the U.S. Global Change Research Program, changes in the climate in the United States and its coastal waters have altered—and will continue to alter—the water cycle, affecting where, when, and how much water is available for all uses. Changes in the climate—including warmer temperatures, changes in precipitation patterns, rising sea levels, and more frequent and intense storms—affect water resources in a number of ways such as increased flooding in some areas and drought in others, and inundation and erosion in coastal areas. Precisely how and to what extent changes in the climate will affect particular water resources in the future is uncertain, but climate-related changes are expected to continue and increase in intensity in some areas of the nation. Climate change has the potential to affect many aspects of the environment and society in which water resource management plays an active role. A 2011 federal interagency review of the potential impacts of climate change on water resources identified four interrelated areas of concern for water resource managers as follows: assuring an adequate water supply for multiple needs, such as drinking water, agriculture, energy production, industrial uses, navigation, and recreation; protecting life, health, and property in the face of risks posed by protecting the quality of freshwater resources, including the quality of surface water and groundwater, and the health of fisheries and aquatic habitat; and protecting coastal and ocean resources as rising sea levels and changes in storm frequency, intensity, and duration impact coastal infrastructure. Adaptation—defined by the National Research Council as adjustments in natural or human systems to a new or changing environment that exploits beneficial opportunities or moderates negative effects—is an element of the proposed responses to climate change that is gaining more attention. More specifically, policymakers are increasingly viewing adaptation as a risk-management strategy to protect vulnerable sectors and communities that might be affected. As we reported in our May 2013 report on land resource management agency adaptation efforts, climate change adaptation planning frameworks generally consist of four key elements that are reviewed and revised as needed as new information emerges. These four elements are the following: Establish a mandate to address climate change with clearly articulated adaptation goals, objectives, and measures of success toward meeting goals. Assess and understand the risks, vulnerabilities, and opportunities posed by climate change by determining (1) what aspects of the climate are changing and over what periods, (2) which resources will be most at risk, (3) why these resources are likely to be vulnerable, and (4) what uncertainties are associated with the predicted climate change impacts and how this may impact adaptation efforts. Develop and prioritize management adaptation actions; that is, determine how to respond to the identified risks by considering a wide array of possible adaptation measures and identifying the highest priority adaptation measures. Implement management options, evaluate the results to determine the actions’ effectiveness, and makes adjustments as necessary. As climate continues to change, adaptation actions need to be regularly monitored for effectiveness and plans need to incorporate new information about risks, lessons learned, and modified priorities. According to a 2009 study collaboratively produced by the Corps, NOAA, Reclamation, and USGS, a variety of water-management options might be considered to facilitate adaptation to climate change, including operational changes, demand management, and infrastructure changes. The study concluded that the options for responding to the effects of climate change will vary by location, and that evaluating options will likely require a partnership between federal, state, and local interests to attain consensus among water managers and users. In 2009, Congress passed the SECURE Water Act, requiring Reclamation to establish a climate change adaptation program to (1) assess the effect of and risk resulting from global climate change on the quantity of water resources and (2) develop strategies to address potential water shortages and other impacts. To assess the effect of climate change, the law requires Reclamation to analyze the extent to which changes in water supply will impact several areas, including Reclamation’s ability to deliver water to its customers, hydroelectric power generation, fish and wildlife habitat, and recreation. The law requires Reclamation to assess specific risks to the water supply of each of its major river basins, including risks related to, among other things, changes in snow cover and the timing and quantity of runoff. To develop strategies to address impacts, the law requires Reclamation, in consultation with nonfederal stakeholders such as appropriate state water resource agencies, to consider and develop appropriate strategies to mitigate the impacts of water supply changes, such as strategies for modifying reservoir storage or operating guidelines and water conservation. Also in 2009, the President signed Executive Order 13514, Federal Leadership in Environmental, Energy, and Economic Performance which, among other things, directs agencies to participate in the Interagency Climate Change Adaptation Task Force (Task Force), which was already developing a strategy for adaptation to climate change, and to develop approaches through which the policies and practices of the agencies can be made compatible with the Task Force’s strategy. In October 2010, the Task Force delivered a progress report to the President through the Council on Environmental Quality containing overarching policy goals to advance climate adaptation and recommending the development of a national action plan to strengthen climate change adaptation for freshwater resources. Based on the work of the Task Force, the Council on Environmental Quality subsequently issued detailed adaptation planning implementation instructions in March 2011. The instructions directed the agencies to issue an agency-wide climate change adaptation policy statement, complete a high-level analysis of agency vulnerability to climate change, and submit to the Council on Environmental Quality and the Office of Management and Budget their climate adaptation plans by June 4, 2012, for implementation in fiscal year 2013. For over 230 years, the Corps has led the development and stewardship of much of the nation’s public water resources. The Corps’ Civil Works Program plans and manages water for transportation, recreation, energy, wildlife habitat, aquatic ecosystems, and water supply, while reducing the impacts of flood damages and other natural disasters. Specifically, the Corps has constructed—and continues to operate, maintain, and rehabilitate—a large inventory and wide variety of water management infrastructure, including reservoirs, hydropower facilities, commercial inland waterways, harbors, and levee systems. In June 2011, in response to the implementing instructions for Executive Order 13514, the Corps established its adaptation policy statement for addressing the effects of climate change, which called for the integration of climate change adaptation in all Corps activities. Two Corps programmatic efforts—the Interagency Performance Evaluation Task Force/Hurricane Protection Decision Chronology Lessons Learned Implementation Team (also known as Actions for Change) and the Responses to Climate Change Program—support the Corps’ ongoing adaptation activities. Since 1902, Reclamation has carried out its mission to manage, develop, and protect water and related resources in 17 western states. The agency has led or provided assistance in constructing most of the large dams and water diversion structures in the West for the purpose of developing water supplies for irrigation—that is, “reclaiming” these lands for human use. In 2009, Reclamation directed its Office of Research and Development and its Office of Policy and Administration to take the lead in implementing the actions required by the SECURE Water Act. Reclamation’s climate adaptation efforts fall within the larger effort by Interior to, among other things, implement Executive Order 13514. In 2013, Interior adopted a policy directing the agency to integrate climate change adaptation strategies into its operations, policies, programs, and planning. See appendix I for more information on the Corps’ and Reclamation’s organization and infrastructure. In addition to each agency’s individual efforts, the Corps and Reclamation established a partnership in 2007—the Climate Change and Water Working Group (CCAWWG)—to address their mutual concerns about the potential effects of climate change on their agencies’ missions. In 2009, the CCAWWG partners jointly produced a preliminary assessment of how climate could impact federal water resources management, which explored strategies to improve water management by tracking, anticipating, and responding to climate change, and identified adaptation challenges. According to a 2012 National Research Council report on Corps infrastructure, large portions of the Corps’ water resources infrastructure were built over 50 years ago and are experiencing various stages of decay and disrepair, making project maintenance and rehabilitation a high priority. The report also found that federal funding over the past 20 years has consistently been inadequate to maintain the Corps’ infrastructure at acceptable levels of performance and efficiency. Similarly, most of Reclamation’s water infrastructure facilities are more than 50 years old and, according to a 2011 Congressional Research Service report, with limited budgetary resources and aging infrastructure, Reclamation’s maintenance needs are likely to increase, as is competition for limited funding. Despite the ongoing challenges of operating and maintaining aging infrastructure under budgetary constraints, it is important that the Corps and Reclamation address the challenge of managing climate change risk in order to limit the fiscal exposure of the federal government. As noted in our 2013 high-risk update, climate change poses a significant financial risk to the federal government, including, but not limited to its role as the owner or operator of extensive infrastructure vulnerable to climate impacts. State and local authorities are responsible for planning and implementing many types of infrastructure projects, and decisions at these levels of government can affect the federal government’s fiscal exposure.