Globally, groundwater use is intensifying to meet demands for irrigation, urban supply, industrialization, and, in some instances, electrical power generation. In response to hydroclimatic variability, surface water is being substituted with groundwater, which must be viewed as a strategic resource for climate adaptation. In this sense, the supply of electricity for pumping is an adaptation policy tool. Additionally, planning for climate-change mitigation must consider CO2 emissions resulting from pumping. This paper examines the influence of electricity supply and pricing on groundwater irrigation and resulting emissions, with specific reference to Mexico—a climate–water–energy 'perfect storm'. Night-time power supply at tariffs below the already-subsidized rates for agricultural groundwater use has caused Mexican farmers to increase pumping, reversing important water and electricity conservation gains achieved. Indiscriminate groundwater pumping, including for virtual water exports of agricultural produce, threatens the long-term sustainability of aquifers, non-agricultural water uses, and stream–aquifer interactions that sustain riparian ecosystems. Emissions resulting from agricultural groundwater pumping in Mexico are estimated to be 3.6% of total national emissions and are equivalent to emissions from transporting the same agricultural produce to market. The paper concludes with an assessment of energy, water, and climate trends coupled with policy futures to address these challenges.