At first blush, it may seem as though there are as many responses to this question as there are religions. In reality, there are only three. Pantheism denies the existence of good and evil because god is all and all is god. Philosophical naturalism* (the worldview undergirding evolutionism) supposes that everything is a function of natural processes, such as brain chemistry and genetics, thus there is no good and evil. Theism alone has a relevant response—and only Christian theism offers one that is satisfactory.
First, Christian theism acknowledges that God created the potential for evil because God created humans with freedom of choice. We choose to love or to hate, to do good or to do evil. The record of history bears eloquent and chilling testimony to the fact that we humans have, of our own free will, actualized the reality of evil through our choices.
Furthermore, without choice, love is rendered meaningless. God neither forces his love on people nor forces people to love him. Instead, God, the supreme exemplar of love, created us with freedom of choice. Without such freedom, we would be little more than preprogrammed robots.
Finally, the fact that God created the potential for evil by granting us freedom of choice will ultimately lead to the best of all possible worlds—a world in which “there will be no more death or mourning or crying or pain” (Revelation 21:4). Those who choose Christ will be redeemed from evil by his goodness and will forever be able to not sin.
good of those who love him, who have been
called according to his purpose.
For further study, see Joni Eareckson Tada and Steven Estes, When God Weeps: Why Our Suffering Matters to the Almighty (Grand Rapids: Zondervan, 1997).