RIP ARCUS

This ARCUS update just arrived. ARCUS had a great run and definitely helped push forward my research program. (See, e.g., my previous post.) Maybe ARCUS' demise was a planned sunsetting, or maybe not. The update is silent on the that. In the current environment, one has to wonder what went on behind the scenes. In any event: RIP ARCUS.

Dear ARCUS Community,

It is with a mix of gratitude and sadness for our community that we share an important update about ARCUS’s future. After more than three decades of connecting, supporting, and facilitating collaboration within the U.S. Arctic research community, ARCUS will sunset its operations at the end of September 2025 and formally dissolve as a nonprofit organization.

This decision comes after careful consideration and reflection on the changing needs of the Arctic research landscape. While ARCUS as an institution will close, the impact of the relationships, collaborations, and shared work we have fostered will continue to ripple through the community for years to come. We are profoundly grateful for the many individuals—past and present—who have served on our Board, worked on our staff, contributed as partners, and supported ARCUS’s mission with passion and dedication.

We want to assure you that we remain active and committed right up to the end. In the weeks ahead, we’ll continue to shine a light on our member institutions and the vital research they do, including:

Wednesday, 10 September – A joint webinar with the Cold Climate Housing Research Center (CCHRC; an ARCUS member) jumpstarting a project to outline the state of the science around socioeconomic aspects of cold climate housing research and innovation

Thursday, 18 September – A listening session with the IARPC Secretariat and Navigating the New Arctic Community Office (NNA-CO) to encourage community input into the next IARPC Arctic Research Plan

Finally, we warmly invite all who have been part of ARCUS’s journey to join us for a virtual celebration—Friday, 19 September at 10am AK / 11am PT / 12pm MT / 1pm CT / 2pm ET—as we honor this extraordinary community and close this chapter together. Please consider taking a moment to connect one last time under the ARCUS umbrella and help ensure the U.S. Arctic research community continues to thrive even in this time of great change.

With heartfelt thanks,

Dr. Audrey R. Taylor

ARCUS Executive Director

The Second of Two Sea Ice Trilogies: Real Time

The second trilogy, below, this time without Rudebusch, also treats Arctic sea ice forecasting, but from a real-time, fixed-target (September), perspective. All of the work came under the umbrella of the Arctic Research Consortium of the United States (ARCUS), and its Sea Ice Prediction Network (SIPN), which oversaw the Sea Ice Outlook (SIO). 

More on ARCUS in the next post. But for now let's look at the second trilogy.

The basic feature-engineered real-time forecasting approach is proposed in

Diebold, F.X. and Gobel, M. (2022), “A Benchmark Model for Fixed-Target Arctic Sea Ice Forecasting,” Economics Letters, 215, 110478,

and it is compared to a feature-engineered real-time machine learning approach in 

Diebold, F.X., Goebel, M., and Goulet Coulombe, P. (2023), “Assessing and Comparing Fixed-Target Forecasts of Arctic Sea Ice: Glide Charts for Feature-Engineered Linear Regression and Machine Learning Models,” Energy Economics, 124, 106833.

The trilogy culminates with a 61-author (must be real science!) assessment of June-September real-time Arctic sea ice forecasting across many models and years, including the above Diebold et al approach: 

Bushuk, M., et al. (2024), “Predicting September Arctic Sea Ice: A Multi-Model Seasonal Skill Comparison,” Bulletin of the American Meteorological Society, 105, 1170-1203. 

The First of Two Arctic Sea Ice Trilogies

I never bogged on the Arctic sea ice "trilogy" below with Glenn Rudebusch et al., certainly not for lack of interest, but rather because much of the research was done when the blog was dormant in the early 2020s. The trilogy addresses the timing of the first ice-free Arctic (IFA) September -- the early IFA (late 2030s) robustly predicted by statistical time-series models; why, in contrast, the large-scale structural climate models tend to get things wrong with a much later IFA; and why you should care. I'm posting on it now not only because I simply think it's interesting and important (and I hope you will too), but also because it complements and contrasts with my next post (on a related but different Arctic sea ice trilogy). Stay tuned! 

Diebold, F.X. and Rudebusch, G.D. (2022), “Probability Assessments of an Ice-Free Arctic: Comparing Statistical and Climate Model Projections,” Journal of Econometrics, 231, 520-534.
---> Compares statistical and large-scale climate model forecasts, and finds that the stat models forecast a much earlier near-ice-free Arctic.

Diebold, F.X., Rudebusch, G.D., Goebel, M., Goulet Coulombe, P. and Zhang, B. (2023), “When Will Arctic Sea Ice Disappear? Projections of Area, Extent, Thickness, and Volume," Journal of Econometrics, 236, 105479.
---> Drills down much deeper on the DR (2022) statistical models, exploring many variations (extent, area, thickness, volume; polynomial vs carbon trends; much more...), establishing robustness of the DR (2022) results and providing more refined forecasts.

Diebold, F.X. and Rudebusch, G.D. (2023), “Climate Models Underestimate the Sensitivity of Arctic Sea Ice to Carbon Emissions,” Energy Economics, 126, 107012.
---> Asks WHY the large-scale models fail so badly in DR (2022) and traces the failure to insufficient carbon sensitivity of sea ice in the large-scale models.

COVID, Economic Activity, and Climate

Everyone talks about COVID helping reduce warming:
COVID up --> economic activity down --> CO2 down --> temperature down.

But there's a flip side:
COVID up --> activity down --> atmospheric sulphate aerosols down --> temperature UP!
(Sulphate aerosols reflect solar heat, so if they're down, temp is up.) 

See https://news.mongabay.com/2020/06/climate-conundrum-could-covid-19-be-linked-to-early-arctic-ice-melt/.

It would be interesting to assess the the competing effects of CO2 vs. sulphate aerosols, dynamically.  One might start with impulse-response analysis of an economic activity shock in a predictive model containing economic activity, CO2, sulphate aerosols, and temperature.

Ice-Free Arctic Summers are Coming VERY Soon

A very happy New Year to all!

Here's a new D&R to start it off:

"Probability Assessments of an Ice-Free Arctic: 
Comparing Statistical and Climate Model Projections"
by
Francis X. Diebold and Glenn D. Rudebusch
arXiv:1912.10774 [stat.AP, econ.EM].

The downward trend in Arctic sea ice is a key factor determining the pace and intensity of future global climate change; moreover, declines in sea ice can have a wide range of additional environmental and economic consequences. Based on several decades of satellite data, in a new paper Glenn Rudebusch and I provide statistical forecasts of Arctic sea ice extent during the rest of this century (Diebold and Rudebusch, "Probability Assessments of an Ice-Free Arctic: Comparing Statistical and Climate Model Projections", arXiv:1912.10774 [stat.AP, econ.EM]). Our results indicate that sea ice is diminishing at an increasing rate, in sharp contrast to average projections from the CMIP5 global climate models, which foresee a gradual slowing of sea ice loss even in high carbon emissions scenarios. Our long-range statistical projections also deliver probability assessments of the timing of an ice-free Arctic. This analysis indicates almost a 60 percent chance of a seasonally ice-free Arctic Ocean in the 2030s -- much earlier than the average projection from global climate models.

Climate Change Economics and Finance

The latest IMF Finance & Development focuses on the economics of climate change. I feared it would be a forgettable collection of green-washed puff pieces, but fortunately I was wrong. There's actually a lot of insightful material, and of course a lot to discuss and debate, and it's an easy and enjoyable read. Thanks to Raham Kanani at the IMF for alerting me.

FEATURED ARTICLES:

• The Adaptive Age: No institution or individual can stand on the sidelines in the fight against climate change // by Kristalina Georgieva
• The Greatest Balancing Act: When it comes to sustaining the vital symbiosis between the economic and the natural world, we all can do more // by David Attenborough and Christine Lagarde
• Carbon Calculus: For deep greenhouse gas emission reductions, a long-term perspective on costs is essential // by Kenneth Gillingham
• Fifty Shades of Green: The world needs a new, sustainable financial system to stop runaway climate change // by Mark Carney
• Putting a Price on Pollution: Carbon pricing strategies could hold the key to meeting the world’s climate stabilization goals // by Ian Parry
• Investing in Resilience: Disaster-prone countries are strengthening their ability to withstand climate events // by Bob Simison
• Climate Change and Financial Risk: Central banks and financial regulators are starting to factor in climate change // by Pierpaolo Grippa, Jochen Schmittmann, and Felix Suntheim         
• Reaping What We Sow: Smart changes to how we farm and eat can have a huge impact on our planet // by Nicoletta Batini                
• A Greener Future for Finance: The successes and challenges of green bonds offer lessons for sustainable finance // by Afsaneh Beschloss and Mina Mashayekhi

FRBSF on Climate Change

Just back from the fantastic Federal Reserve Bank of San Francisco Conference on the Economics of Climate Change.  Program and links to papers here.  Every paper was a highlight.  Check out, for example, Basal-Kiku-Ochoa here on the more "structural empirical" side , or Pesaran et al. here on the more "reduced-form empirical" side (although they have theory too). Really good stuff. The slides for my discussion of Pesaran et al. follow.

Volatility and Risk Institute

NYU's Volatility Institute is expanding into the Volatility and Risk Institute (VRI). The four key initiatives are Climate Risk (run by Johannes Stroebel), Cyber Risk (run by Randal Milch), Financial Risk (run by Viral Acharya), and Geopolitical Risk (run by Thomas Philippon). Details here. This is a big deal. Great to see climate given such obvious and appropriate prominence. And notice how interconnected are climate, financial, and geopolitical risks.

The following is adapted from an email from Rob Engle and Dick Berner:

The Volatility Institute and its V-lab have, for the past decade, assessed risk through the lens of financial volatility, providing real-time measurement and forecasts of volatility and correlations for a wide spectrum of financial assets, and SRISK, a powerful measure of the resilience of the global financial system. Adopting an interdisciplinary approach, the VRI will build on that foundation to better assess newly emerging nonfinancial and financial risks facing today’s business leaders and policymakers, including climate-related, cyber/operational and geopolitical risks, as well as the interplay among them. 

The VRI will be co-directed by two NYU Stern faculty: Nobel Laureate Robert Engle, Michael Armellino Professor of Management and Financial Services and creator of the V-lab; and Richard Berner, Professor of Management Practice and former Director of the Office of Financial Research, established by the Dodd–Frank Wall Street Reform and Consumer Protection Act to help promote financial stability by delivering high-quality financial data, standards and analysis to policymakers and the public. 

The VRI will serve as the designated hub to facilitate, support and promote risk-related research, and external and internal engagement among scholars, practitioners and policymakers. To realize its interdisciplinary potential, the VRI will engage the expertise of faculty across New York University, including at the Courant Institute of Mathematical Sciences, Law School, Tandon School of Engineering, Wagner School of Public Policy and Wilf Family Department of Politics in the Faculty of Arts & Science.