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Global Temperature Forecast out to 2100 PowerPoint Presentation

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Slide 1 - How likely are we to limit temperature increase to + 1.5 degree Celsius by the end of the Century? This reflects agreement by the G20 summit in Rome on October 31, 2021 Gaetan Lion, November 5, 2021
Slide 2 - Introduction 2 I will leverage the climate change models introduced within my presentation “Climate Change Models to Estimate and Forecast Temperature”, September 2021. You can find extensive background on these models at my original presentation at Slideshare.net https://www.slideshare.net/gaetanlion/climate-change-model-250126342 You can also see a shorter overview of such models at my blog within the environment label category, post dated October 30, 2021. https://considerworthy.blogspot.com/search/label/environment To forecast temperatures till the end of the century, I will use the VAR model with the LN(CO2 concentration) as the causal variable and temperature anomaly level as the dependent or response variable. This same VAR model was able to generate pretty accurate out-of-sample forecast of temperatures from 1982 to 2020 using historical data until 1981 with no information whatsoever regarding the out-of-sample period (1982 to 2020). On the next slide, I am just copying slide 50 of my original presentation. This slide outlines how surprisingly successful this VAR model was in forecasting the 1982 to 2020 period with no information whatsoever. Given this empirical success, it is going to be informative what this model temperature forecast looks like over the 2021 – 2100 period, using historical data out to 2020.
Slide 3 - A VAR model w/ 1 lag using LN(CO2) can predict with no info whatsoever! 3 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Temperature Anomaly. VAR w/ LN(CO2) forecast 1 lag, 1982 - 2020. P.I. 95% Actual VAR fcst Lower Upper Just using LN(CO2) instead of CO2 as our second Z variable within a VAR model with 1 lag generates a surprisingly good forecast of the temperature anomaly over the 1982 – 2020 period with no information whatsoever regarding this period! This is rather astonishing. As shown, the VAR forecast does overestimate temperature by just about 0.1 degree Celsius at the onset in 1982 and in 2020. That’s a very small error given the model is not fed any information.
Slide 4 - VAR model fits historical data really well VAR Model historical fit using LN(CO2 concentration as causal variable) with 1-lag 1.20 1.00 0.80 0.60 0.40 0.20 0.00 -0.20 -0.40 -0.60 Actual 4 Well, frankly fitting the historical data very well is the easy part. Just about any VAR model using level variables will inevitably do that. (Note that the variables are cointegrated. So the mentioned variables having unit roots is not a statistical issue). Far more impressive and relevant, is that this same VAR model was able to predict temperatures pretty well over the 1982 – 2020 period using historical data up to 1981, as shown on the previous slide. 1881 1885 1889 1893 1897 1901 1905 1909 1913 1917 1921 1925 1929 1933 1937 1941 1945 1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017 Temperature Anomaly in Degree Celsius over 1850 - 1900 average Est.
Slide 5 - So, what does the VAR model temperature forecast out to 2100 look like? This VAR model forecasts out to 2100 is even more severe than the most severe scenarios of the recent IPCC assessment (SSP5-8.5) shown below. By 2100, the VAR model forecasts a + 5.3 Celsius increase vs. 4.3 Celsius increase for the IPCC scenario SSP5-8.5. 5 The temperature anomaly crosses the 1.5 Celsius in 2040. It crosses 2.0 Celsius in 2053. It crosses 2.5 Celsius in 2064. It crosses 3.0 Celsius in 2072. It crosses 4.0 Celsius in 2086. It crosses 5.0 Celsius in 2098.
Slide 6 - Can a model, that fit the historical data and predicted out-of-sample 1982 – 2020 very well, be way off when predicting over the 2021 – 2100 period? 6 1881 1885 1889 1893 1897 1901 1905 1909 1913 1917 1921 1925 1929 1933 1937 1941 1945 1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001 2005 2009 2013 2017 Temperature Anomaly in Degree Celsius over 1850 - 1900 average VAR Model historical fit using LN(CO2 concentration as causal variable) with 1-lag 1.20 1.00 0.80 0.60 0.40 0.20 0.00 -0.20 -0.40 -0.60 Actual Est. … Yes, it can! See why on the next slide.
Slide 7 - The VAR model forecasts extremely high CO2 concentration even when compared with IPCC scenario SSP5-8.5. 7 2021 2024 2027 2030 2033 2036 2039 2042 2045 2048 2051 2054 2057 2060 2063 2066 2069 2072 2075 2078 2081 2084 2087 2090 2093 2096 2099 CO2 concentration (ppm) VAR model CO2 forecast 1600 1400 1200 1000 800 600 400 200 0 IPCC most recent scenarios By 2100, the IPCC scenario SSP5-8.5 forecasts that CO2 concentration will reach 1,120 ppm. Meanwhile, the VAR model forecasts it will be 1,453 ppm. And, that is how the VAR model overshoots by forecasting a temperature increase by 2100 that is about 1 degree Celsius higher than the most severe IPCC scenario (SSP5-8.5). However, if we focus on shorter horizons out to 2050 the VAR forecast in CO2 concentration is quite reasonable and in line with several of the IPCC scenarios. This is also the case for the temperature increase shown earlier.
Slide 8 - Temperature forecast vs. CO2 Concentration 8 425 470 Temperature Anomaly. Celsius VAR vs. IPCC scenarios temperature anomaly 4.50 4.00 3.50 3.00 2.50 2.00 1.50 1.00 0.50 0.00 500 600 700 875 900 1000 1100 CO2 concentration in ppm VAR IPCC The table above measures the temperature increase sensitivity to CO2 concentration. We note that the temperature anomaly estimates generated by a simple OLS regression model (temperature level ~ LN(CO2 concentration) introduced in our earlier presentation generates nearly identical estimates vs. our VAR model. In turn, those estimates are not far off from the ones derived from the various IPCC scenarios. The graph indicates that the VAR model underestimates a bit temperature sensitivity to CO2 concentration at the lower CO2 concentration levels. But, as such levels increase, the VAR model temperature estimates and the IPCC scenarios rapidly converge.
Slide 9 - How likely are we to limit temperature increase to + 1.5 degree Celsius by the end of the Century? … Extremely unlikely because we have only + 0.4 degree Celsius to work with 9 The most current data would indicate we are already at + 1.1 degree Celsius. So, we have only 0.4 degree Celsius as a margin over the next 80 years or so. Meanwhile, over the past 40 years temperature has increased by 0.7 degrees. This would suggest that over the next 23 years we would cross the + 1.5 degree Celsius threshold. Notice that this back of the envelope estimate is fairly much in line with both the IPCC scenarios and the VAR model (which generates a pretty reasonable forecast out to 2050 or so).
Slide 10 - How likely are we to limit temperature increase to + 1.5 degree Celsius by the end of the Century? … Extremely unlikely because CO2 emissions are projected to rise fairly rapidly (EIA most recent forecast) The U.S. Energy Information Administration (EIA) released its most recent “International Energy Outlook 2021 (IEO2021)” on October 6, 2021. And, they forecast that CO2 emissions (that gets cumulatively captured in CO2 concentration) will continue to rise fairly rapidly till the end of their forecast period in 2050. Quoting from their report’s conclusion: “If current policy and technology trends continue, global energy consumption and energy-related carbon dioxide emissions will increase through 2050 as a result of population and economic growth. Oil and natural gas production will continue to grow, mainly to support increasing energy consumption in developing Asian economies.” 10
Slide 11 - Considerations 11 A model that fits the historical data and predicts out-of-sample over a long period of time may not necessarily generate reasonable scenarios over an even longer prospective horizon. This is probably relevant to any models that have autoregressive components such as VAR, ARIMAX, ARDLs, and other similar models. However, while the VAR model did generate rather outlying forecasts by 2100; when looking at horizon out to 2050, its forecasts were pretty much in line with the IPCC scenarios. Both a simple OLS regression and the VAR model generated temperature estimates in response to CO2 concentration scenarios that were pretty reasonable and in line with the IPCC scenarios. Thus, these models at least got the economic carbon sensitivity right. Where the VAR model went off the road is in projecting CO2 concentrations that were too high during the second half or especially third quarter of this century. This review suggests that attempting to maintain temperature increase at the 1.5 degree Celsius level by the end of the century may turn out to be extremely challenging if not unlikely. Keep in mind that we are probably at the + 1.1 degree Celsius level as we speak. So, we have very little room to work with over the next 80 years or so. Reaching this aggressive goal may entail drastic reduction in our historical demographic growth, economic growth, and economic growth sensitivity to CO2 emissions. And, that is not what the most recent IEA forecast out to 2050 anticipates. Instead, the IEA anticipates ongoing reasonably robust economic growth and rising CO2 emissions (resulting in rising CO2 concentration) driven by “increasing energy consumption in developing Asian economies.”
 

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