The Economics of Global Warming 1959-2020

Weshah Razzak

No 2103, Discussion Papers from School of Economics and Finance, Massey University, New Zealand

Abstract: Evidence-based policy re global warming is best relying on a relevant sample of data. Showing close correlation between CO2 and temperature over hundreds of thousands of years is irrelevant today. We choose a sample of annual data from 1959 to-date to provide some statistically robust stylized facts about the relationships between actual CO2 and temperature. Visually, there is a clear upward trend in both data. Time series analyses suggest that CO2 is difference-stationary and temperature is trend-stationary. Thus, the moments (mean, variance, etc.) of the data in levels are functions of time, which means that the correlation between the two variables may be spurious. However, we find no statistically robust evidence of correlation, long run co-variation, long run common trend, or common cycles between CO2 and temperature over a period of 60 years. Nonetheless, at most 40 percent of the variance of the Northern Hemisphere temperature is due to , 20 percent of the Southern Hemisphere, and much less of global temperature.

Keywords: Econometrics of unit root; trend; cycle; VAR; temperature and global warming; CO2; greenhouse gasses; and fossil fuel consumption (search for similar items in EconPapers)
JEL-codes: C01 C22 C3 Q54 (search for similar items in EconPapers)
Pages: 74 pages
Date: 2021
New Economics Papers: this item is included in nep-ban, nep-ene, nep-env and nep-his
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Persistent link: https://EconPapers.repec.org/RePEc:mas:dpaper:2103

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