What is the 'natural variation' in global temperature that climate-change skeptics mention?
First off, let me preface this answer with a disclaimer: I do not deny climate change.

From what I've read, the skeptics for the most part don't claim to have an alternative explanation for the recent warming. Their arguments (not mine!) are fourfold:


The recent warming doesn't exist, is natural, or is just noise. The tiny half degree warming we've seen in the last 40 years is a tiny blip on the huge changes that have occurred in the past.
Climate change is a natural occurrence. The climate has changed historically naturally by huge amounts, much bigger than the tiny half degree warming we've seen in the last 40 years. 
Predicting the weather after ten days is a fool's errand. Predicting climate is worse than a fool's errand. It can't be done.
Even if things have warmed up in the last forty years, one thing is certain: It's not CO2. That a tiny trace gas could possibly drive the climate is laughable.





Those are not my arguments.

With regard to point #1,

Source: World Meteorological Organization Press Release No. 976: 2001-2010, A Decade of Climate Extremes

The above image speaks for itself. The global temperature change over the last forty years is very real, and is not noise.


With regard to point #2, yes the climate has changed in the past, and by huge amounts. We've had everything from snowball Earth to dinosaurs roaming the Arctic. And the point is? This argument is akin to a farmer taking a trip to the Grand Canyon and upon seeing what damage nature can do decides to forgo contour plowing and other anti-erosion farming techniques.

That the farmer's field might turn into a mountain or be washed out to sea several millions of years from now is irrelevant. What's relevant is that his good or bad practices have an impact on the world food supply. That nature can do far worse does not negate those bad farming practices. Bad farming practices are bad for humanity.

Getting back to climate change, if higher global temperatures are bad for humanity, it doesn't matter matter one bit how close ice came to the equator or how far north dinosaurs roamed in the past. What matters is that modern humanity is sensitive to climate change, be it natural or induced by humans.


With regard to point #3, yes, weather becomes chaotic after ten days or so. That does not mean that climate is chaotic, and if it is, the ~ten day Lyapunov time of the weather does not mean that climate also has a ten day Lyapunov time.

With regard to point #4, it is CO2. It was amusing to follow the skeptic response to Richard Muller's Berkeley Earth Surface Temperature project. Muller was a self-proclaimed skeptic, and he was going to prove those leftist climatologists wrong. The skeptic community cheered at the start. 
"He's going to prove them wrong!" A funny thing happened on the way to proving them wrong: He proved them to be correct. Muller was an honest scientist in this regard. His own work caused him to switch from being a skeptic to ascribing to AGW.