[Southwest North America is just one of 12 tipping points described.]
Overview - Aridity in Southwest North America is predicted to intensify and persist in the future and a transition is probably already underway and will become well established in the coming years to decades, akin to permanent drought conditions (4). Levels of aridity seen in the 1950s multiyear drought or the 1930s Dust Bowl are robustly predicted to become the new climatology by mid-century, resulting in perpetual drought. In California alone this will result in a number of impacts including on water resources, agriculture, and wildfire.
Wider impacts - Besides South-western North America, other land regions to be hit hard by subtropical drying include southern Europe, North Africa and the Middle East as well as parts of South America. If the model projections are correct, Mexico in particular faces a future of declining water resources that will have serious consequences for public water supply, agriculture and economic development and this will (and already has) affected the region as a whole, including the United States.
Insurance aspects - Insurers are now alert to wildfire risk in the region. The most serious aspects of the tipping point for insurers would therefore be the indirect ones, i.e. economic and labour market disruption and a deterioration of public finances. On the positive side, investment in water management and alternative energy could provide opportunities for fund managers.
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