One of the primary concerns about potential global change is that the steadily rising CO2 content of earth's atmosphere may lead to significant increases in the severity and frequency of drought, especially in the agricultural heartland of the USA (Manabe et al., 1981; Gleick, 1987; Manabe and Wetherald, 1986, 1987, McCabe et al., 1990). This consequence has been postulated to result from minor changes in the atmospheric supply of moisture (precipitation) and major changes in the atmospheric demand for moisture (potential evapotranspiration), as a result of increased surface temperatures. Waggoner (1989), for example, has shown how a 10% drop in precipitation can lead to a 46% increase in the frequency of drought; while Rind et al. (1990) have demonstrated that CO2-induced global warming, if it occurs as projected, could raise the frequency of severe drought in the USA from 5 to 50% by the year 2050. If drought is truly this responsive to changes in precipitation and potential evapotranspiration, and there is little reason to believe it is not, it could serve as a sensitive indicator of global warming and as a reliable test for identifying its onset. Hence, as the effective CO2 content of the atmosphere has already risen by nearly 50% above its pre-industrial level (Michaels, 1990; Houghton et al., 1990), studies of drought trends of the past century might even now provide evidence for the reality of global warming. However, there are three separate factors that could complicate this simple test.