Dias, R.; Teixeira, N.; Alexandre, P.; Chambino, M. Exploring the Connection between Clean and Dirty Energy: Implications for the Transition to a Carbon-Resilient Economy. Energies2023, 16, 4982.
Dias, R.; Teixeira, N.; Alexandre, P.; Chambino, M. Exploring the Connection between Clean and Dirty Energy: Implications for the Transition to a Carbon-Resilient Economy. Energies 2023, 16, 4982.
Dias, R.; Teixeira, N.; Alexandre, P.; Chambino, M. Exploring the Connection between Clean and Dirty Energy: Implications for the Transition to a Carbon-Resilient Economy. Energies2023, 16, 4982.
Dias, R.; Teixeira, N.; Alexandre, P.; Chambino, M. Exploring the Connection between Clean and Dirty Energy: Implications for the Transition to a Carbon-Resilient Economy. Energies 2023, 16, 4982.
Abstract
This study investigates the relationship between clean and dirty energy markets, specifically focusing on clean energy stock indexes and their potential as hedging assets and safe havens during periods of global economic uncertainty. The research analyzes five clean energy indexes and five dirty energy indexes from May 2018 to May 2023, considering events like the global pandemic and the Russian invasion of Ukraine. The main objective is to examine the causal relationship among different stock indexes pertaining to dirty and clean energy by using the Granger causality test (VAR Granger Causality/Block Exogeneity Wald Test) to determine whether clean energy indexes can predict future prices of dirty energy indexes. However, the findings reveal that clean and dirty energy indexes do not exhibit hedging characteristics or serve as safe havens during times of economic uncertainty, rejecting the research question. These results have important implications for investment strategies, as assets lacking safe haven characteristics may not preserve portfolio efficiency in uncertain times. The study's insights provide valuable guidance for investors, poli-cymakers, and participants in energy financial markets. It highlights the need to adapt investment approaches and seek alternative options to navigate uncertain economic conditions effectively.
Business, Economics and Management, Econometrics and Statistics
Copyright:
This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
