Does Climate Sensitivity Differ Across Regions? A Varying–Coefficient Approach

Global mean surface temperature has been increasing in response to growing greenhouse gas concentrations (IPCC, 2021). While Earth is getting warmer overall, regions that differ in local geographical features experience unequal increases in temperature. In this paper, we develop a dynamic varying-coefficient panel data model and use it to measure regional climate sensitivity, defined as the increase in temperature in that region, following a doubling of CO2 concentration. The inference method proposed in this paper is capable of accommodating heterogeneous co-integrating relationships between global and local variables, and it allows comoving climate time series to possess both stochastic and deterministic trending components. Using observational data of mean surface temperatures, solar radiation, and carbon dioxide concentrations between 1959-2017, our model provides an estimate of a 3.7C increase for average climate sensitivity. Moreover, our estimates indicate that high-latitude regions in the Northern Hemisphere are most vulnerable to global warming.