Climate change and the world economy: short-run determinants of atmospheric CO2

Volcanic eruptions, the El Niño Southern oscillation (ENSO), world population, and the world economy are the four variables usually discussed as influencing the short-run changes in CO2 atmospheric levels through their influence on CO2 emissions and sinks. Using proper procedures of detrending, we do not find any observable relation between the short-term growth of world population and the increase of CO2 concentrations. Results suggest that the link between volcanic eruptions, ENSO activity, and CO2 concentrations may be confounded by the coincidence of the Pinatubo eruption with the breakdown of the economies of the Soviet Bloc in the early 1990s. Changes in world GDP (WGDP) have a significant effect on CO2 concentrations, so that years of above-trend WGDP are years of greater rise of CO2 concentrations. Measuring WGDP in constant US dollars of 2000, for each trillion WGDP deviates from trend, the atmospheric CO2 concentration has deviated from trend, in the same direction, about half a part per million.

► CO2 levels are thought to depend on volcanism, ENSO activity, and world population and output. ► There is no relation between short-term growth of world population and CO2 concentrations. ► Volcanism coinciding with global recessions may be confounding the volcanic effects on CO2. ► Years of above-trend world GDP are years of greater rise in CO2 concentrations. ► For each 1012 US$ that world GDP deviates from trend, CO2 levels deviate from trend about half a ppm.