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This open access book focuses on the concepts, tools and techniques
needed to successfully model ever-changing time-series data. It
emphasizes the need for general models to account for the
complexities of the modern world and how these can be applied to a
range of issues facing Earth, from modelling volcanic eruptions,
carbon dioxide emissions and global temperatures, to modelling
unemployment rates, wage inflation and population growth. Except
where otherwise noted, this book is licensed under a Creative
Commons Attribution 4.0 International License. To view a copy of
this licence, visit http://creativecommons.org/licenses/by/4.0.
Climate Econometrics: An Overview provides a review of the research
in this new and growing field. The structure of the monograph is as
follows: First, section 2 describes econometric methods for
empirical climate modeling that can account for wide-sense
non-stationarity, namely both stochastic trends and location
shifts, with possibly large outliers, as well as dynamics and
non-linearities. Section 3 considers hazards confronting empirical
modeling of nonstationary time-series data using an example where a
counter-intuitive finding is hard to resolve. The framework has a
clear subject-matter theory, so is not mere 'data mining', yet the
empirical result flatly contradicts the well-based theory. Section
4 provides a brief excursion into climate science, mainly concerned
with the composition of the Earth's atmosphere and the role of CO2
as a greenhouse gas. Section 5 considers the consequences, both
good and bad, of the Industrial Revolution raising living standards
beyond the wildest dreams of those living in the 17th century, but
leading to dangerous levels of CO2 emissions from using fossil
fuels and consider applications of climate econometrics against
that background. Section 6 illustrates the approach by modeling
past climate variability over the Ice Ages. Section 7 models UK
annual CO2 emissions over 1860-2017 to walk through the stages of
modeling empirical time series that manifest all the problems of
wide-sense non-stationarity. Section 8 concludes and summarizes a
number of other empirical applications.
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