Earth's clouds are shrinking, boosting global warming

Wait, doesn't that mean less greenhouse effect?

Clouds have two main impacts: reflect incoming, shortwave radiation back to space and absorb (and re-radiation up and down) outgoing, longwave radiation from the surface. The interplay and relative proportion between these two impacts has long been a challenge and depends upon the cloud altitude (low/high), composition (water,ice), and optical depth.

No, greenhouse effect is mostly controlled by CO2, although water vapor plays a role. But clouds mostly act to reflect sunlight back to space, so fewer clouds will mean more warming, not less.

You are right that water is a green house gas. You are wrong to assume the only water in the air is clouds. Clouds is basically water condensation. That happens a bit less in warm air; but the water is still there. You need cool air for condensation to happen. Warm air can hold more water in gas form.

Clouds reflect light and infrared radiation from the sun. Less clouds means more of that heat gets absorbed and then trapped by green house gases. Like water.

Water vapor in the atmosphere is complicated. At some altitudes, it causes atmospheric warming, at others, it increases albedo -- reflectivity -- and thus is cooling. Of course wrt to anthropogenic climate change the focus is usually on CO2; but man made water vapor emissions are relevant eg. in the context of air travel.