Identifying the Causal Role of CO2 during the Ice Ages

Jan 2020 | 898

Authors: Jennifer Castle, David Hendry

We investigate past climate variability over the Ice Ages, where a simultaneous-equations system is developed to characterize land ice volume, temperature and atmospheric CO2 levels as non-linear functions of measures of the Earth’s orbital path round the Sun. Although the orbital variables were first theorised as the fundamental causes of glacial variation by Croll in 1875 following Agassiz’s conception of a ‘Great Ice Age’ in 1840, their minor variations were thought insufficient to drive such major changes, especially the relative rapidity of shifts between glacial and warmer periods. The changes over the ice ages in atmospheric CO2 closely matched changes in land ice volumes, and since temperature changes are in turn affected by CO2 and also closely tracked ice volumes, a key identification issue is the causal role of CO2 in the process. As any links between CO2 and temperature above the forces from the orbital drivers (which of course are still operating) must have been natural ones hundreds of thousands of years ago, understanding their interactions at that time is important now that additional CO2 emissions are anthropogenic. We develop a simultaneous equation system over the last 800,000 years that allows a test of the role of CO2 as endogenously driven by the orbital variations, or an ‘exogenous’ influence as it now is.

JEL Codes: C01, C51, C87, Q54

Keywords: Climate Econometrics; Model Selection; Outliers; Identification; Saturation Estimation; Au- tometrics; Ice Ages

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