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Econometric Measurement of Earth's Transient Climate Sensitivity

53 Pages Posted: 13 Mar 2017  

Peter C. B. Phillips

Yale University - Cowles Foundation; University of Auckland; University of Southampton; Singapore Management University - School of Economics

Thomas Leirvik

University of Lugano - Institute of Finance

Trude Storelvmo

Yale University

Date Written: February 15, 2017

Abstract

How sensitive is Earth’s climate to a given increase in atmospheric greenhouse gas (GHG) concentrations? This long-standing and fundamental question in climate science was recently analyzed by dynamic panel data methods using extensive spatiotemporal data of global surface temperatures, solar radiation, and GHG concentrations over the last half century to 2010 (Storelvmo et al, 2016). These methods revealed that atmospheric aerosol effects masked approximately one-third of the continental warming due to increasing GHG concentrations over this period, thereby implying greater climate sensitivity to GHGs than previously thought. The present study provides asymptotic theory justifying the use of these methods when there are stochastic process trends in both the global forcing variables, such as GHGs, and station-level trend effects from such sources as local aerosol pollutants. These asymptotics validate confidence interval construction for econometric measures of Earth’s transient climate sensitivity. The methods are applied to observational data and to data generated from three leading global climate models (GCMs) that are sampled spatio-temporally in the same way as the empirical observations. The findings indicate that estimates of transient climate sensitivity produced by these GCMs lie within empirically determined confidence limits but that the GCMs uniformly underestimate the effects of aerosol induced dimming effects. The analysis shows the potential of econometric methods to calibrate GCM performance against observational data and to reveal the respective sensitivity parameters (GHG and non-GHG related) governing GCM temperature trends.

Keywords: Climate Sensitivity, Cointegration, Common Stochastic Trend, Idiosyncratic Trend, Spatio-Temporal Model, Unit Root

JEL Classification: C32, C33

Suggested Citation

Phillips, Peter C. B. and Leirvik, Thomas and Storelvmo, Trude, Econometric Measurement of Earth's Transient Climate Sensitivity (February 15, 2017). Cowles Foundation Discussion Paper No. 2083. Available at SSRN: https://ssrn.com/abstract=2931087 or http://dx.doi.org/10.2139/ssrn.2931087

Peter C. B. Phillips (Contact Author)

Yale University - Cowles Foundation ( email )

Box 208281
New Haven, CT 06520-8281
United States
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University of Auckland ( email )

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Auckland
New Zealand
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University of Southampton

Southampton, SO17 1BJ
United Kingdom

Singapore Management University - School of Economics

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Singapore

Thomas Leirvik

University of Lugano - Institute of Finance ( email )

Via Buffi 13
CH-6900 Lugano
Switzerland
+1 2039887643 (Phone)

Trude Storelvmo

Yale University ( email )

New Haven, CT 06520
United States

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