Robust Estimation and Forecasting of Climate Change Using Score-Driven Ice-Age Models

• Published in: Econometrics
• Main Authors: Szabolcs Blazsek, Alvaro Escribano
• Format: Article in Journal/Newspaper
• Language: English
• Published: MDPI AG 2022
• Subjects: climate change; ice-ages and inter-glacial periods; global ice volume; atmospheric CO 2; Antarctic land surface temperature; dynamic conditional score; Economics as a science; HB71-74; Antarctic; Antarc*
• Online Access: https://doi.org/10.3390/econometrics10010009; https://doaj.org/article/b468d4e967f44adc9358ab6d061f7787

We use data on the following climate variables for the period of the last 798 thousand years: global ice volume ( <math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msub><mi>Ice</mi><mi>t</mi></msub></semantics></math> ), atmospheric carbon dioxide level ( <math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msub><mi>CO</mi><mrow><mn>2</mn><mo>,</mo><mi>t</mi></mrow></msub></semantics></math> ), and Antarctic land surface temperature ( <math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msub><mi>Temp</mi><mi>t</mi></msub></semantics></math> ). Those variables are cyclical and are driven by the following strongly exogenous orbital variables: eccentricity of the Earth’s orbit, obliquity, and precession of the equinox. We introduce score-driven ice-age models which use robust filters of the conditional mean and variance, generalizing the updating mechanism and solving the misspecification of a recent climate–econometric model (benchmark ice-age model). The score-driven models control for omitted exogenous variables and extreme events, using more general dynamic structures and heteroskedasticity. We find that the score-driven models improve the performance of the benchmark ice-age model. We provide out-of-sample forecasts of the climate variables for the last 100 thousand years. We show that during the last 10–15 thousand years of the forecasting period, for which humanity influenced the Earth’s climate, (i) the forecasts of <math xmlns="http://www.w3.org/1998/Math/MathML" display="inline"><semantics><msub><mi>Ice</mi><mi>t</mi></msub></semantics></math> are above the observed <math xmlns="http://www.w3.org/1998/Math/MathML" ...