Oil price, climate policy uncertainty, sustainable development, US dollar in an era of global conflict: Based on dynamic time-frequency spillover analysis

Abstract

This paper uses time-frequency domain techniques to study the dynamic spillover relationship among oil price, climate risk, sustainable development, and US dollar in an era of global conflict. The findings demonstrate a high overall spillover level, indicating that the risk transmission is prone to occur among the variables. The dynamic investigation indicates that the spillover influence is thus frequency-dependent and higher at high frequencies. The findings of the net dynamic spillover reveal that geopolitical risk has a certain degree of spillover risk to other variables, and the majority of this risk transmission occurs in the near run. In addition, oil prices and sustainable development are major net recipients of the US dollar, playing an important role in preventing inflation risks. This study makes a more comprehensive and systematic discussion of geopolitical risks. It presents different risk impacts on crude oil markets, climate policy making, sustainable development, and US dollar on multiple time scales. These conclusions can prevent and resolve the cessation of climate cooperation and oil price shocks induced by geopolitical risks, and provide valuable enlightenment for realizing sustainable development. Countries should attach importance to the multi-faceted impact of geopolitical risks, pay more consideration to the global environment for oil and climate policy, and jointly contribute to sustainable development.