Global Warming and Local Dimming: The Statistical Evidence

Two effects largely determine global warming: the well-known greenhouse effect and the less well-known solar radiation effect. An increase in concentrations of carbon dioxide and other greenhouse gases contributes to global warming: the greenhouse effect. In addition, small particles, called aerosols, reflect and absorb sunlight in the atmosphere. More pollution causes an increase in aerosols, so that less sunlight reaches the Earth (global dimming). Despite its name, global dimming is primarily a local (or regional) effect. Because of the dimming the Earth becomes cooler: the solar radiation effect. Global warming thus consists of two components: the (global) greenhouse effect and the (local) solar radiation effect, which work in opposite directions. Only the sum of the greenhouse effect and the solar radiation effect is observed, not the two effects separately. Our purpose is to identify the two effects. This is important, because the existence of the solar radiation effect obscures the magnitude of the greenhouse effect. We propose a simple climate model with a small number of parameters. We gather data from a large number of weather stations around the world for the period 1959-2002. We then estimate the parameters using dynamic panel data methods, and quantify the parameter uncertainty. Next, we decompose the estimated temperature change of 0.73 degrees C (averaged over the weather stations) into a greenhouse effect of 1.87 degrees C, a solar radiation effect of -1.09 degrees C, and a small remainder term. Finally, we subject our findings to extensive sensitivity analyses.