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800,000 Years of Climate Risk

Author

Listed:
  • Tobias Adrian
  • Nina Boyarchenko
  • Domenico Giannone
  • Ananthakrishnan Prasad
  • Dulani Seneviratne
  • Yanzhe Xiao

Abstract

We use a long history of global temperature and atmospheric carbon dioxide (CO2) concentration to estimate the conditional joint evolution of temperature and CO2 at a millennial frequency. We document three basic facts. First, the temperature–CO2 dynamics are non-linear, so that large deviations in either temperature or CO2 concentrations take a long time to correct–on the scale of multiple millennia. Second, the joint dynamics of temperature and CO2 concentrations exhibit multimodality around historical turning points in temperature and concentration cycles, so that prior to the start of cooling periods, there is a noticeable probability that temperature and CO2 concentrations may continue to increase. Finally, evaluating the future evolution of temperature and CO2 concentration conditional on alternative scenarios realizing, we document that, even conditional on the net-zero 2050 scenario, there remains a significant risk of elevated temperatures for at least a further five millennia.

Suggested Citation

  • Tobias Adrian & Nina Boyarchenko & Domenico Giannone & Ananthakrishnan Prasad & Dulani Seneviratne & Yanzhe Xiao, 2022. "800,000 Years of Climate Risk," Staff Reports 1031, Federal Reserve Bank of New York.
    • Handle: RePEc:fip:fednsr:94741
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    References listed on IDEAS

    as
    1. James H. Stock, 2020. "Climate Change, Climate Policy, and Economic Growth," NBER Macroeconomics Annual, University of Chicago Press, vol. 34(1), pages 399-419.
    2. Giselle Montamat & James H. Stock, 2020. "Quasi-experimental estimates of the transient climate response using observational data," Climatic Change, Springer, vol. 160(3), pages 361-371, June.
    3. Carolyn W. Snyder, 2016. "Evolution of global temperature over the past two million years," Nature, Nature, vol. 538(7624), pages 226-228, October.
    4. Pretis, Felix, 2020. "Econometric modelling of climate systems: The equivalence of energy balance models and cointegrated vector autoregressions," Journal of Econometrics, Elsevier, vol. 214(1), pages 256-273.
    5. Simon Dietz & James Rising & Thomas Stoerk & Gernot Wagner, 2021. "Economic impacts of tipping points in the climate system," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 118(34), pages 2103081118-, August.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    climate change; multimodality; Network for Greening the Financial System (NGFS) scenarios;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods

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