While most discussions about climate change focus on continued warming, one of the greatest climate threats of the 21st century could paradoxically bring drastic cooling to parts of the world and catastrophic flooding to others. Scientists and economists are increasingly focusing on attention to the Atlantic Meridional Overturning Circulation (AMOC) – a vast system of ocean currents that acts like a global conveyor belt distributing heat from the tropics towards the poles.

Although a full AMOC collapse this century remains a low-probability event, the risk is much more real than previously thought. Research shows that the system is weakening significantly, and some models suggest it could collapse as early as 2050. What would be the consequences of crossing this climatic tipping point?

European freezer: Drastic cooling and dryness

While the rest of the world would continue to struggle with global warming, Europe would experience a shock drop in temperature after the AMOC collapse. The circulation that otherwise keeps winters mild in places like London (compared to cities at similar latitudes, such as Calgary, Canada) would grind to a halt.

• Rapid drop in temperatures: The northern parts of Europe would be most affected. It is estimated that temperatures in the UK, Ireland, Iceland and Scandinavia would drop by 2 to 3°C per decade. The cooling would then spread to Germany, France, Poland and parts of Central Europe.
• Precipitation shift: Along with the cooling, precipitation patterns would change significantly. Storm systems would shift further south and east, leaving northern and western Europe significantly drier than they are today. These changes would have huge impacts on the continent's agricultural production and energy systems.
• Ice expansion: Sea ice in the Arctic would expand further south, which could seriously disrupt the operation of oil and gas facilities in the North Sea.

Earthquakes on the American coast: Water apocalypse

On the opposite side of the Atlantic, stopping the so-called Gulf Stream (part of the AMOC) would release huge masses of water that this fast current otherwise keeps diverted from the coast.

The result would be a sudden and significant rise in sea level along the east coast of the United States by at least 50 centimeters beyond conventional projections. Modeling shows that in a hypothetical collapse scenario in 2050, this rise in sea level would:

• It led to more than doubling the total exposure of properties to the risk of a century-long flood.
• It brought a 2.8-fold increase in risk compared to today, representing billions in financial losses on at-risk assets in just a selected portfolio of residential and commercial buildings.
• It put entirely new communities at risk. More than 100 different areas (ZIP codes) that currently face almost no risk of flooding would suddenly see massive water threats.

Metropolises like New York or Miami would face a catastrophic increase in flood threats, with Miami alone having a 100-year flood pose a risk of over $500 million to the properties analyzed.

Global climate shocks

The impacts would not be limited to the North Atlantic region. A collapsed AMOC system would cause a chain reaction across the planet:

• Global rainfall systems would be severely disrupted. Major changes in rainfall would affect the Amazon basin, as well as areas influenced by the African, Asian and South American monsoons.

Economic and financial "tsunami"„

Physical changes would immediately lead to market shocks. Extreme nonlinear losses could act as a catalyst for a financial tipping point. This sudden increase in climate threats would test the global insurance system. We are already seeing a massive withdrawal of private insurance companies from the market in Florida due to the rising risk of flooding. A collapse of the AMOC could lead to massive regional uninsurables, which would in turn undermine mortgage markets, reduce property values, and reduce government tax revenues.

Although there is no strong scientific consensus that the AMOC will definitely collapse in the 21st century, the weakening of this flow itself is an indisputable fact. Although the collapse scenario is probable and highly uncertain, its catastrophic impact in the form of a „European freezer“, devastating American floods and global precipitation shocks is so enormous that global economists and institutions must take it into account now when building resilience to long-term risks. JRi&CO2AI