Economic policy uncertainty and carbon footprint: International evidence

Tee, Chwee-Ming; Wong, Wai-Yan; Hooy, Chee–Wooi

doi:10.1016/j.mulfin.2023.100785

Cited by 23 publications

(4 citation statements)

References 70 publications

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“…Sarkodie et al [6] suggest that a rise in bitcoin trading volume spurs the carbon and energy footprint by 24% in the long term, while a dynamic impact promotes it by nearly 50%. Tee et al [25] underline that economic policy uncertainty has a positive relationship with the carbon footprint, and this conclusion is suitable for the total, direct and indirect carbon emission measurements. Kohli et al [16] reveal that as of July 2021, bitcoin's energy consumption is equivalent to that of countries such as Sweden and Thailand; it emits 64.18 million tons of carbon dioxide, and this emission is close to that of Greece and Oman.…”

Section: Literature Reviewmentioning

confidence: 92%

Could Cryptocurrency Policy Uncertainty Facilitate U.S. Carbon Neutrality?

Song

Chang

et al. 2023

Sustainability

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Investigating the essential impact of the cryptocurrency market on carbon emissions is significant for the U.S. to realize carbon neutrality. This exploration employs low-frequency vector auto-regression (LF-VAR) and mixed-frequency VAR (MF-VAR) models to capture the complicated interrelationship between cryptocurrency policy uncertainty (CPU) and carbon emission (CE) and to answer the question of whether cryptocurrency policy uncertainty could facilitate U.S. carbon neutrality. By comparison, the MF-VAR model possesses a higher explanatory power than the LF-VAR model; the former’s impulse response indicates a negative CPU effect on CE, suggesting that cryptocurrency policy uncertainty is a promoter for the U.S. to realize the goal of carbon neutrality. In turn, CE positively impacts CPU, revealing that mass carbon emissions would raise public and national concerns about the environmental damages caused by cryptocurrency transactions and mining. Furthermore, CPU also has a mediation effect on CE; that is, CPU could affect CE through the oil price (OP). In the context of a more uncertain cryptocurrency market, valuable insights for the U.S. could be offered to realize carbon neutrality by reducing the traditional energy consumption and carbon emissions of cryptocurrency trading and mining.

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Section: Literature Reviewmentioning

confidence: 92%

Could Cryptocurrency Policy Uncertainty Facilitate U.S. Carbon Neutrality?

Song

Chang

et al. 2023

Sustainability

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“…The government's stance towards renewable energy is cloaked in obscurity, causing this uncertainty. Due to the possibility that these restrictions could be modified in the future, investors are cautious about making long-term investments (Tee et al, 2023;Serfraz et al, 2023;Qamruzzaman, 2023a;. EPU particularly impacts solar photovoltaic investment since lenders often consider this technology risky and unreliable.…”

Section: Xiementioning

confidence: 99%

Clarifying the nexus between Trade Policy Uncertainty, Economic Policy Uncertainty, FDI and Renewable Energy Demand

Qamruzzaman

2024

IJEEP

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: As the world becomes increasingly aware of the need to shift towards sustainable energy sources, China and the United States are two global superpowers leading this transition. With growing populations and increasing demand for energy, these countries have recognized the importance of renewable energy in meeting their needs while reducing carbon emissions. The motivation of the study is to evaluate the impact of trade policy uncertainty on renewal energy demean in the USA and China for the period 2000-2021 by employing linear and nonlinear assessment. The test statistics derived through the cointegration test by following Bayer-Hancked and Makki's cointegration established a long-run tie in the empirical equation. Moreover, the long-run linkage was revealed with symmetry and asymmetry investigation. Referring to the coefficients of linear assessment, the study established that uncertainties have a detrimental role in clean energy demand in the long- and short-run assessment. The asymmetric association between uncertainties and REC has been documented through the execution of a standard weld test with the null of symmetry. The directional causality test established a unidirectional linkage between trade policy uncertainty and REC [TPU<- ->REC], and a bidirectional linkage between economic policy uncertainty and REC [EPU<- ->REC].

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“…Another group of researchers explains the effects of EPU on corporate social responsibility (CSR), ESG engagement, and sustainability‐related decisions during times of uncertainty. The prior studies such as, (Jia & Li, 2020; Ongsakul et al, 2021; Peng et al, 2023; Rjiba et al, 2020; Tee et al, 2023; Vural‐Yavaş, 2020), found that EPU has a positive relation with ESG means the economy uncertainty drives the firms to exhibits sustainability commitment towards society and environment by protecting its legitimacy and remove negative impact of EPU on the capital structure of the firms (Asimakopoulos et al, 2023). Alandejani and Al‐Shaer (2023) also discovered that political instability and uncertainty avoidance are negatively linked with ESG performance.…”

Section: Literature Reviewsmentioning

confidence: 99%

“…Conversely, prospect theory suggests that investors prefer short‐term certain gains over long‐term, uncertain gains (Kahneman & Tversky, 2013). Research indicates that companies with strong ESG performance are better equipped to navigate economic uncertainty and perform well in the market in the short and long run (Jia & Li, 2020; Tee et al, 2023; Vural‐Yavaş, 2021). Comprehensive studies have examined the link between policy uncertainty and corporate social responsibility (CSR), including ESG and other sustainability engagement at the firm‐level variables.…”

Section: Introductionmentioning

confidence: 99%

Unlocking the dynamic linkages between sustainable equity investment and economic policy uncertainty: An empirical analysis for G‐20 countries

Gartia,

Bhue,

Panda

2024

Bus Strat Dev

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The study examines the dynamic relationships between sustainable equity investment and economic policy uncertainty of G‐20 countries using monthly environmental, social, and governance (ESG) equity and economic policy uncertainty (EPU) indices. Using the autoregressive distributed lag model and nonlinear autoregressive distributed lag model models, the study finds a negative long‐run relationship between sustainable equity investments and economic policy uncertainties in Australia, Canada, the USA, Brazil, Mexico, Germany, Italy, and Japan. Investors in these G20 countries may perceive that companies with higher ESG performance are more likely to face regulatory scrutiny, legal action, or reputational damage if they are associated with high levels of economic policy uncertainties. As a result, ESG market indices may underperform when EPU is high and vice versa. It supports prospect theory and suggests that individuals are more sensitive to potential losses than gains. On the contrary, the relationship is positive in the case of the USA, Brazil, China, and to some extent India. This might be because firms with high ESG performance could manage risks better and seize opportunities associated with EPU, which helps ESG market indices to outperform when EPU is high. It is supported by the legitimacy theory that says to maintain the legitimacy and credibility of the company, the investment must be invested in ESG initiatives, which can lead to improved long‐term financial performance and market value.

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Economic policy uncertainty and carbon footprint: International evidence

Cited by 23 publications

References 70 publications

Could Cryptocurrency Policy Uncertainty Facilitate U.S. Carbon Neutrality?

Could Cryptocurrency Policy Uncertainty Facilitate U.S. Carbon Neutrality?

Clarifying the nexus between Trade Policy Uncertainty, Economic Policy Uncertainty, FDI and Renewable Energy Demand

Unlocking the dynamic linkages between sustainable equity investment and economic policy uncertainty: An empirical analysis for G‐20 countries

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