Does Climate Sensitivity Differ Across Regions? A Varying–Coefficient Approach

Global mean surface temperature has been increasing in response to growing greenhouse gas concentrations (IPCC 2021). While Earth is getting warmer overall, regions that have different local geographical features experience unequal increases in temperature. In this article, we develop a varying-coefficient dynamic panel data model and use it to measure local climate sensitivity, defined as the increase in temperature in a given location following a doubling of CO₂ concentration. The inference method proposed in this article can accommodate heterogeneous co-integrating relationships between global and local variables, and it allows the co-moving climate time series to possess both stochastic and deterministic trending components. Using observational data of mean surface temperatures, solar radiation, and carbon dioxide concentrations between 1959 and 2017, our model provides heterogeneous estimates for climate sensitivity that range between increases of 2.5 °C and 5 °C over land, depending on the latitude. Our estimates indicate that high-latitude locations in the Northern Hemisphere are most susceptible to global warming.