by L. Coleman, Feb 12, 2026 in ClimateChangeDispatch

Global warming policy has become the world’s most expensive bet. Governments have committed trillions of dollars on the assumption that carbon dioxide (CO2) from human activity is the principal driver of rising temperatures.

The story is simple: more CO2 in the air means higher global temperature. That simplicity proved politically convincing and underpins net‑zero targets, carbon pricing, and vast subsidies to decarbonize industry, energy, and transport within a generation.

But what if that core relationship is statistically less solid than advertised?

My new paper, published in the journal Science of Climate Change, probes that possibility with a disarmingly basic question: “Could CO2 be the principal cause of global warming?”

Instead of turning to climate models, I used my financial research experience to approach the problem the way economic analysts examine a market hypothesis: by testing how well data supports the assumed cause and effect.

This approach offers promise because climate and financial markets have a lot in common. Both are complex global systems with many feedbacks, incomplete data, and multiple plausible drivers. Both rely heavily on time‑series data, where establishing causality is notoriously difficult.

In finance, skeptical regulators and risk managers insist that models be stress‑tested against hard numbers. My analysis applied that toolkit to the CO2-temperature link to provide what Nobel laureate Daniel Kahneman recommended as an outside view.

The starting point is familiar. Since the 19th century, atmospheric CO2 and global average temperature have both trended upward. This co-movement is widely taken as empirical support for a mechanistic link from CO2 to temperature.

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