Publications by Year: Forthcoming

Wagner G, Weitzman ML. Potentially Large Equilibrium Climate Sensitivity Tail Uncertainty. Economics Letters [Internet]. Forthcoming. Publisher's VersionAbstract
Equilibrium  climate  sensitivity  (ECS),  the  link  between  concentrations  of greenhouse  gases in  the  atmosphere  and  eventual  global  average  tempera- tures, has been persistently and perhaps deeply uncertain.  Its ‘likely’ range has been approximately between 1.5 and 4.5 degrees Centigrade for almost 40 years (Wagner and Weitzman, 2015).  Moreover, Roe and Baker (2007), Weitzman  (2009),  and  others  have  argued  that  its  right-hand  tail  may  be long, ‘fat’ even.  Enter Cox et al. (2018), who use an ‘emergent constraint’ approach to characterize the probability distribution of ECS as having a cen- tral or best estimate of 2.8◦C with a 66% confidence interval of 2.2-3.4 ◦C. This  implies,  by  their  calculations,  that  the  probability of  ECS  exceeding 4.5◦C is less than 1%.  They characterize such kind of result as “renewing hope that we may yet be able to avoid global warming exceeding 2[◦C]”. We share the desire for less uncertainty around ECS (Weitzman, 2011; Wagner and Weitzman, 2015).  However, we are afraid that the upper-tail emergent constraint on ECS islargely a function of the assumed normal error terms in the regression analysis.  We do not attemptto evaluate Cox et al. (2018)’s physical modeling (aside from the normality assumption), leaving that task to physical scientists.  We take Cox et al. (2018)’s 66% confidence interval as given and explore the implications of applying alternative probability distri- butions.  We find, for example, that moving from a normal to a log-normal distribution,  while  giving  identical probabilities  for  being  in  the  2.2-3.4◦C range, increases the probability of exceeding 4.5◦C by over five times.  Using instead a fat-tailed Pareto distribution, an admittedly extreme case, increases the probability by over forty times.
Keywords: climate change, climate sensitivity, fat tails