Decreasing sea ice and snow cover are reducing the surface albedo and changing the Arctic surface energy balance. How these surface albedo changes influence the top of atmosphere albedo and energy balance is a more complex question, though, that depends critically on the modulating effects of the intervening atmosphere and clouds. This thesis investigates the radiative impacts of clouds in the Arctic, particularly on shortwave fluxes, in observations and models. First, satellite observations are used to quantify the contribution of clouds to the planetary albedo and benchmark reanalyses. We find that the atmosphere accounts for the majority (>60%) of the planetary albedo throughout the sunlight months, and clouds further reduce the variability of the planetary albedo that is otherwise observed in the surface albedo. Next we investigate the impact of clouds on absorbed shortwave radiation in the Arctic. In the last two decades, trends in absorbed shortwave are statistically significant if calculated with clear-sky fluxes, but clouds reduce the magnitude of shortwave trends and increase the time needed to discern a statistically significant trend beyond the length of the current record. In the latest generation of climate models, this delaying effect of clouds is often underestimated, if it is present at all. Predicted changes over the 21st century of cloud cover and planetary albedo help explain these model discrepancies. Finally, we quantify how clouds can impact the ocean surface energy budget under different CO2 forcings using a state of the art global climate model. Clouds have a limited impact on upper ocean temperatures in the pre-industrial environment, but the connection between clouds and SSTs strengthens with higher CO2 concentrations. Cloud cover is negatively related to fall SST in the Arctic, but the seasonal cycles of sea ice and radiative fluxes determine how effectively clouds can influence SSTs.