I've been asked that question before and I recently wrote a long reply about it. Then I realized that I'd like to save that reply for posterity here on my blog.
To understand why the CO2 level is critical nowadays, please start by going here and play with the Pangea breakup animation. Yes, the CO2 level was higher in the past. So was the oxygen level, significantly, which is part of what enabled those massive dinosaurs to exist. That CO2 helped maintain the global tropical/sub-tropical/hot desert climate that was so dominant on earth for hundreds of millions of years but there was another factor too.
As you watch the Pangea breakup animation, you'll note that for a long time (hundreds of millions of years) that North America and South America were completely separate landmasses. You will also note that there were clear lines of oceanic circulation between all the major continents. This circulation was equatorial. Consequently, the entire planet had a much more tropical/sub-tropical climate even into the farther northern reaches. (This animation is not the best one but many of the animations fail to account for sea level and instead just focus on the underlying plate movements.)
However, just a few million years ago, note that the Central American isthmus rose from the sea. Also note that the Mediterranean/Red Sea linkage was broken as well. At that point in time the "normal" global equatorial circulation was broken and the earth started experiencing intermittent ice age/warm age cycles. This also caused a new circulation pattern, often called the Thermohaline Circulation to come into existence. This pattern attempts to redistribute heat but does not do so as evenly as the prior circulation patterns did. The result is the ice age/warm age cycles we've experienced for the past few million years.
Now what's critical here is that each prior warm age appears to have ended with a global warming event. Those events took thousands of years to unfold normally but in the end they changed the Atlantic circulation (the Thermohaline) and caused it to shift dramatically south. Each time this happened, the northern reaches of the world became vastly colder in short order. What caused this shift in the Thermohaline Circulation? All the initial evidence points to high ice melt rates from the Greenland ice cap plus high ice melt rates flowing into the Arctic Ocean from Canadian and Siberian permafrost melt. Note also that these cycles are positive feedback loops because once the permafrost melts even more CO2 and methane is released into the atmosphere further warming things, resulting in more melt, til the Thermohaline shuts down. At least that is the current theory and it is consistent with the newly uncovered data on abrupt climate change. The existing Thermohaline Circulation is highly dependent on properties of subfreezing temperature highly saline water, which due to its coldness and density, can rapidly sink into the depths of the Atlantic to continue the circulation cycle back through the South Atlantic into the Pacific then back around to the Atlantic again on the surface after it warms. The melting cycle dillutes that water with fresh water, preventing it from achieving densities high enough to sink and continue the circulation pattern.
So the danger here, with the current tectonic plate arrangement is that further warming appears to actually act as the trigger for another ice age. Current CO2 levels have risen rapidly and are higher now than any time in the last 650,000 years and worse, appear to be rising at a rate far higher than previous increases.
Interestingly, instead of tackling the CO2 problem another suggestion that's been made is a huge engineering effort to re-open the Central American isthmus and the Mediterranean/Red Sea linkages again. This does not mean a system of locks like today but a huge, free-flowing ocean channel where massive ocean currents like the Gulf Stream can freely flow around the equator. One problem with this is that it will definitely alter earth's global climate but in ways that we cannot easily predict. Plus it will have further effects on existing ecosystems just as they are highly stressed by human overpopulation. The problem with either change (ice age or opening the isthmus and restoring ancient circulation patterns) is that the world is highly dependent on food production from temperate areas of the globe such as the US/Canadian breadbasket, the Ukraine breadbasket, and the Australian breadbasket areas. Any major climate shift could destroy those areas as viable farming areas and result in global famine and death in the hundreds of millions or even billions. So we, as a species, need more time to both bring our own population under control and gain a better understanding of what we are doing to the climate.
If an ice age started tomorrow, even without human action, it would be disastrous for mankind. That that we appear to be actively accelerating the arrival of the next ice age when we have no mechanisms in place to mitigate its impact is the height of irresponsibility.
Of course, to make matters even worse, we are now beginning to see evidence that the power of hurricanes is growing in the Atlantic tropics due to global warming before we even get to the beginning of an ice age. And the fact is that this power factor change appears closely related to the shutdown of the Atlantic current. So even before we get to catastrophic climate shifts, we're already seeing damage accrue in the Atlantic tropics and subtropic regions due to global warming. This damage is extensive enough that major insurers like Lloyds of London will be forced to dramatically raise insurance rates for operating in the Gulf of Mexico.
So yeah, CO2 matters, especially when CO2 is higher now than any time in the last 650,000 years and it is entirely our own fault.
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