The impact of a future solar minimum on climate change projections in the Northern Hemisphere

Solar variability represents a source of uncertainty in the future forcings used in climate model simulations. Current knowledge indicates that a descent of solar activity into an extended minimum state is a possible scenario. With aid of experiments from a state-of-the-art Earth system model, we investigate the impact of a future solar minimum on Northern Hemisphere climate change projections. This scenario is constructed from recent 11 year solar-cycle minima of the solar spectral irradiance, and is therefore more conservative than the 'grand' minima employed in some previous modeling studies. Despite the small reduction in total solar irradiance (0.36 W m^-2), relatively large responses emerge in the winter Northern Hemisphere, with a reduction in regional-scale projected warming by up to 40%. To identify the origin of the enhanced regional signals, we assess the role of the different mechanisms by performing additional experiments forced only by irradiance changes at different wavelengths of the solar spectrum. We find that a reduction in visible irradiance drives changes in the stationary wave pattern of the North Pacific and sea-ice cover. A decrease in UV irradiance leads to smaller surface signals, although its regional effects are not negligible. These results point to a distinct but additive role of UV and visible irradiance in the Earth's climate, and stress the need to account for solar forcing as a source of uncertainty in regional scale projections.

Volatility spillovers for spot, futures, and ETF prices in energy and agriculture

The agricultural and energy industries are closely related, both biologically and financially. The paper discusses the relationship and the interactions on price and volatility, with special focus on the covolatility spillover effects for these two industries. The interaction and covolatility spillovers or the delayed effect of a returns shock in one asset on the subsequent volatility or covolatility in another asset, between the energy and agricultural industries is the primary emphasis of the paper. Although there has already been significant research on biofuel and biofuel-related crops, much of the previous research has sought to find a relationship among commodity prices. Only a few published papers have been concerned with volatility spillovers. However, it must be emphasized that there have been numerous technical errors in the theoretical and empirical research, which needs to be corrected. The paper not only considers futures prices as a widely-used hedging instrument, but also takes an interesting new hedging instrument, ETF, into account. ETF is regarded as index futures when investors manage their portfolios, so it is possible to calculate an optimal dynamic hedging ratio. This is a very useful and interesting application for the estimation and testing of volatility spillovers. In the empirical analysis, multivariate conditional volatility diagonal BEKK models are estimated for comparing patterns of covolatility spillovers. The paper provides a new way of analyzing and describing the patterns of covolatility spillovers, which should be useful for the future empirical analysis of estimating and testing covolatility spillover effects.