Does Carbon Dioxide Predict Temperature?

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Title: Does Carbon Dioxide Predict Temperature?
Author: Mytty, Tuukka
Other contributor: Helsingin yliopisto, Valtiotieteellinen tiedekunta, Politiikan ja talouden tutkimuksen laitos
University of Helsinki, Faculty of Social Sciences, Department of Political and Economic Studies
Helsingfors universitet, Statsvetenskapliga fakulteten, Institutionen för politik och ekonomi
Publisher: Helsingfors universitet
Date: 2013
Language: eng
Thesis level: master's thesis
Discipline: Economics
Abstract: Does carbon dioxide predict temperature? No it does not, in the time period of 1880-2004 with the carbon dioxide and temperature data used in this thesis. According to the Inter Governmental Panel on Climate Change(IPCC) carbon dioxide is the most important factor in raising the global temperature. Therefore, it is reasonable to assume that carbon dioxide truly predicts temperature. Because this paper uses observational data it has to be kept in mind that no causality interpretation can be made, only predictive inferences. The data is from the years 1880-2004 and consists of carbon dioxide emissions and temperature anomalies, the base period for the anomalies is 1961-1990. The main analysis method is the cointegrated VAR model but also the standard VAR model is used. The variables were tested for possible unit roots and it was found that there were unit roots present. Then the variables were tested for the cointegrating rank and here the analysis divided into three parts. One, with the assumptions that the variables are integrated of order one, a constant as a deterministic term and one cointegrating relation. Two, variables are allowed to be integrated of order two, a linear trend as a deterministic term and one cointegrating relation. Three, based on some weak evidence there was a result that variables weren’t cointegrated and the analysis could be done in differences. In the first the case it the result was that carbon dioxide doesn’t predict temperature but actually temperature predicted carbon dioxide, the second version gave the same result. In the third case neither one of the variables predicted the other one. These results go against the what is considered as the common consensus in the subject matter of climate change.
Subject: carbon dioxide
climate change

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