IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v138y2024ics0140988324005401.html
   My bibliography  Save this article

Do climate change risks affect the systemic risk between the stocks of clean energy, electric vehicles, and critical minerals? Analysis under changing market conditions

Author

Listed:
  • Basher, Syed Abul
  • Sadorsky, Perry

Abstract

This paper analyzes the impact of climate change risks—specifically from natural disasters, global warming, international summits, and U.S. climate policy—on the return connectedness (systemic risk) of a network consisting of the stocks of clean energy, electric vehicles, and critical minerals in bear, bull, and normal market conditions. Employing a quantile vector autoregression (QVAR) approach, we find significant temporal variations in the total connectedness index, with notable spikes during the COVID-19 pandemic and the Russia-Ukraine war. Total connectedness is higher but less variable under bear and bull market conditions. Concerns about global warming has a positive and significant impact on systemic risk during bear and normal market conditions while international summits have a negative impact during normal market conditions. However, the effects of these climate change risks are small in magnitude. Economic policy uncertainty and stock market volatility have the largest positive impacts on systemic risk under most market conditions. Our results reveal a nonlinear (inverted U-shaped) relationship between variable importance and systemic risk quantile, showing that the impact on connectedness is largest in magnitude under normal market conditions.

Suggested Citation

  • Basher, Syed Abul & Sadorsky, Perry, 2024. "Do climate change risks affect the systemic risk between the stocks of clean energy, electric vehicles, and critical minerals? Analysis under changing market conditions," Energy Economics, Elsevier, vol. 138(C).
  • Handle: RePEc:eee:eneeco:v:138:y:2024:i:c:s0140988324005401
    DOI: 10.1016/j.eneco.2024.107832
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324005401
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.eneco.2024.107832?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Clean energy; Climate change risks; Quantile connectedness; Systemic risk; Critical minerals; Electric vehicles;
    All these keywords.

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:138:y:2024:i:c:s0140988324005401. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.