Dendroclimatology is the science of determining past climates from trees (primarily properties of the annual tree rings). Tree rings are wider when conditions favor growth, narrower when times are difficult. Other properties of the annual rings, such as maximum latewood density (MXD) have been shown to be better proxies than simple ring width. Using tree rings, scientists have estimated many local climates for hundreds to thousands of years previous. By combining multiple tree-ring studies (sometimes with other climate proxy records), scientists have estimated past regional and global climates.
Advantages
Tree rings are especially useful as climate proxies in that they can be well-dated via dendrochronology, i.e. matching of the rings from sample to sample. This allows extension backwards in time using deceased tree samples, even using samples from buildings or from archeological digs. Another advantage of tree rings is that they are clearly demarked in annual increments, as opposed to other proxy methods such as boreholes. Furthermore, tree rings respond to multiple climatic effects (temperature, moisture, cloudiness), so that various aspects of climate (not just temperature) can be studied. However, this can be a double-edged sword.
Limitations
Along with the advantages of dendroclimatology are some limitations: confounding factors, geographic coverage, annular resolution, and collection difficulties. The field has developed various methods to partially adjust for these challenges.
Confounding factors
There are multiple climate and non-climate factors as well as nonlinear effects that impact tree ring width. Methods to isolate single factors (of interest) include botanical studies to calibrate growth influences and sampling of "limiting stands" (those expected to respond mostly to the variable of interest).
Climate factors
Climate factors that affect trees include temperature, precipitation, sunlight, and wind. To differentiate among these factors, scientists collect information from "limiting stands." An example of a limiting stand is the upper elevation treeline: here, trees are expected to be more affected by temperature variation (which is "limited") than precipitation variation (which is in excess). Conversely, lower elevation treelines are expected to be more affected by precipitation changes than temperature variation. This is not a perfect work-around as multiple factors still impact trees even at the "limiting stand," but it helps. In theory, collection of samples from nearby limiting stands of different types (e.g. upper and lower treelines on the same mountain) should allow mathematical solution for multiple climate factors.
Non-climate factors
Non-climate factors include soil, tree age, fire, tree-to-tree competition, genetic differences, logging or other human disturbance, herbivore impact (particularly sheep grazing), pest outbreaks, disease, and CO2 concentration. For factors which vary randomly over space (tree to tree or stand to stand), the best solution is to collect sufficient data (more samples) to compensate for confounding noise. Tree age is corrected for with various statistical methods: either fitting spline curves to the overall tree record or using similar aged trees for comparison over different periods (regional curve standardization). Careful examination and site selection helps to limit some confounding effects, for example picking sites undisturbed by modern man.
Non-linear effects
In general, climatologists assume a linear dependence of ring width on the variable of interest (e.g. moisture). However, if the variable changes enough, response may level off or even turn opposite. The home gardener knows that one can underwater or overwater a house plant. In addition, it is possible that interaction effects may occur (for example "temperature times precipitation" may affect growth as well as temperature and precipitation on their own. Also, the "limiting stand" helps somewhat to isolate the variable of interest. For instance, at the upper treeline, where the tree is "cold limited", it's unlikely that nonlinear effects of high temperature ("inverted quadratic") will have a numerically significant impact on ring width over the course of a growing season.