Global Temperatures and Greenhouse Gases: A Common Features Approach

We propose a common features approach and establish that global temperatures and greenhouse gases share a common trend without conditioning on the exact nature of their trends. We also find deterministic cycles in global temperature series with a period of 72 years whose amplitude is non-negligible compared to the warming effect caused by anthropogenic greenhouse gas emissions. We also explore the direction of causation in the co-trending relationship by establishing an error correction mechanism, which shows that greenhouse gas emissions do not respond to the equilibrium errors whereas the global temperature responds to equilibrium errors so as to maintain the co-trending relationship. Finally, we forecast future temperatures conditional on representative concentration pathways (RCP) of greenhouse gases considered by the intergovernmental panel on climate change (IPCC). Our forecasts show that the cyclical component could play a significant role in the next 30 years in such a way that would make the politics of effective emission control policy making more challenging.