This work investigates the technical and financial performance of deeply decarbonised wholesale electricity markets with uncertain variable renewable generation (VRG), uncertain demand and different types of flexibility. It first finds that different combinations of power reserves (i.e. power generation capacity) and energy reserves (i.e. energy storage capacity), can achieve adequate system reliability

In this paper, we analyze the economic impacts of the West-East Electricity Transmission Project (WEETP) project using the multi-period difference-in-difference (DID) method based on county-level data from 2000 to 2020. Our findings indicate that the WEETP project inhibits firm entry in electricity-exporting regions while encouraging firm entry in electricity-importing regions, thus hindering regional

We investigate whether green (brown) portfolios constructed from clean energy ETFs (fossil fuel ETFs) yield positive (negative) returns conditional on climate-related risks. While the green portfolios do not unconditionally outperform the brown ones, the outperformance of green portfolios is statistically significant under the conditional setting using non-parametric estimates with imposing inequality

This paper examines the suspension of the Australian National Electricity Market (NEM) that occurred in June 2022. Our study aims to (i) identify the key factors leading to the market suspension, (ii) investigate the behaviour of market participants and price outcomes during this period, and (iii) provide important recommendations for policy and decision-makers related to avoiding or managing crises

Distributive justice is an important but often overlooked factor in policy evaluation. We thus examine how people's attitudes towards distributive justice affect their preferences for programmes aimed at reducing ambient air pollution resulting from the combustion of fossil fuels for residential heating. To do so, we carried out two multifactorial survey experiments that allowed us to incorporate justice

Income inequality and energy poverty are critical obstacles to the worldwide low-carbon transformation and deeply affect human behavior. Applying a dynamic panel data model, this study investigates the effect of income inequality and energy poverty on global carbon emissions. We determine the effect of the interaction between income inequality and energy poverty on the global low-carbon transformation

This study investigates the relationship between novel and old news sentiment and commodity futures returns. Using TRNA data from Thomson Reuters, we measure daily sentiment of both novel and old news to estimate their impact on commodity futures returns. Our findings reveal that both novel and old news sentiment significantly correlate with returns, with old sentiment having a stronger effect. Notably

In recent years, the worsening global geopolitical conditions have led investors and policy makers to become increasingly concerned about systemic risk in the global energy market. However, the existing literature has little empirical evidence on this problem from a geopolitical perspective. Based on an Elastic-Net-VAR model for depicting high-dimensional left-tail interdependence, this paper measures

This paper develops a capped-call option model to evaluate sustainable insurance for achieving common prosperity. It integrates policyholder protection (Sustainable Development Goal 3 (SDG 3)) and the cap-and-trade mechanism (SDG 7) in modeling the Gini coefficient, thereby connecting SDGs 3 and 7 with common prosperity. The main findings are as follows. Life insurance policies that prioritize saving

The slow adoption of residential energy-efficiency retrofits continues to hamper the energy transition. We study incentives for adoption by proposing a model of optimal investment under uncertainty where the wealth-maximising agent has the option to delay. Stochastic portfolio returns and energy prices are taken into account. An extension of the model where the energy carrier is switched, e.g. from

This study presents the first analysis of the nexus between the Southern Oscillation Index (SOI), a measure of climate risk, and segmented clean energy indices (such as solar, renewable, and bioenergy). Our research findings indicate that (i) the Granger quantile causality significance of SOI on segmented clean energy indices is asymmetric across different conditional quantiles. Significant predictability

The aim of this paper is to analyse the key effects contributing to changes in energy imports in the European Union (EU-27) in the period 2000–2020. Using the Logarithmic Mean Divisia Index (LMDI), the analysis examines the effect of changes in six factors—energy structure, energy dependence, energy transformation efficiency, energy yield after transformation, energy efficiency and activity—on imports

Time variation and persistence are crucial properties of volatility that are often studied separately in energy volatility forecasting models. Here, we propose a novel approach that allows shocks with heterogeneous persistence to vary smoothly over time, and thus model the two together. We argue that this is important because such dynamics arise naturally from the dynamic nature of shocks in energy

This research examines the energy efficiency of city districts through the Malmquist–DEA model and investigates the spatial effects of the service trade and the digital economy on energy efficiency in urban green development. The study also delves into the specific context of the AI service trade to gain insights into and align with the emerging digital intelligence industry. The interplay of the service

The accurate forecasting of carbon returns is paramount for enabling informed investment decisions, promoting emissions reduction, and effectively shaping policies to combat climate change. In this paper, we propose a novel method to improve carbon returns predictability in a data-rich environment. The innovations of the model are manifested in two key dimensions: (i) a feature selection strategy based

This study explores the degree to which per capita aggregate renewable energy production is converging across U.S. states. Specifically, we examine both relative (club) convergence and weak σ-convergence. The results reject overall convergence in per capita aggregate renewable energy production for the panel of U.S. states, but identifies two convergence clubs. The results also suggest that there is

This research aims to evaluate the accuracy of the long-term relationship between renewable and sustainable energy sectors and emerging technologies, including quantum computing, artificial intelligence (AI), and big data. Using a novel methodology that integrates the Time-Varying Parameter Vector Autoregressive (TVP-VAR) frequency connectedness approach with Long Short-Term Memory (LSTM) neural networks

Renewable energy innovations are essential for mitigating greenhouse gas emissions and addressing climate change, guaranteeing a more pristine and healthful environment. Moreover, these advancements stimulate economic expansion by establishing novel sectors and employment prospects while improving energy reliability and ecological viability. For the first time, the current study explores how supply

Highlighting the unprecedented rise in CO2 emissions from the global energy sector, the paper discusses the significant shift towards renewable energy, which has reshaped financial markets and investment landscapes. Despite the transition, conventional fossil fuel energy remains pivotal to the global economy, influencing renewable energy markets, especially during financial crises. Using advanced methodologies

This paper investigates the influence of peer financial choices on the capital structure decisions of European and North American listed companies in the oil and gas sector. It also examines how commodity prices, particularly oil and natural gas prices, and their corporate hedging affect capital structure policies. The findings underscore the existence of peer effects in the oil and gas industry, indicating

Carbon allowance price is an important tool to reduce carbon emissions and achieve carbon neutrality. It is necessary to establish a predictive model to provide accurate and reliable information to managers and participants in the carbon trading market. Therefore, a novel probability density prediction model, called TS2Vec-based distribution Transformer (TDT), is proposed. TDT consists of two stages:

The domain of energy poverty is increasingly recognised as a multifaceted global challenge stemming from limited income, high energy costs, and inefficient housing. The issue affects different social groups and regions unevenly, even within Europe. This paper investigates energy poverty across 32 economies, including EU member states and several non-EU European countries, over the period from 2004

The complementarity between renewable generation profiles has been widely explored in the literature. Notwithstanding, complex interactions between regulatory and economic frameworks add interesting challenges and opportunities for hybrid power plant investors, regulators, and planners. Focusing on the Brazilian power market, we study the alignment of incentives between the economically-optimized strategy

Interest in nuclear energy has increased recently due to its low-carbon footprint, energy security concerns, and technological advances. Despite the recent surge in uranium stocks, there is a lack of research on uranium sector volatility. We fill this gap by analyzing the volatility of the Global X Uranium ETF (URA) from 2010 to 2024 using high-frequency data. Our analysis reveals that HAR models effectively

In recent years, the economic impact and environmental contribution of Artificial Intelligence (AI) have gradually become a new focus in academia. This study uses a panel data sample of 50 countries to explore the impact of AI on energy transition (ET), aiming to fill an important research gap. The results highlight several critical insights. First, AI has had a significant positive impact on facilitating

Focusing on clean energy stocks and oil prices, we find that connectedness between these assets not only exists in volatility, but also at higher-order moments, such as skewness and kurtosis, which have been largely under studied in the existing literature. Estimating the connectedness using intra-day data, our initial static analyses suggest that the connectedness between the clean energy and oil

This study provides new evidence for the regulatory impact of informality on gasoline efficiency in Africa. I propose a Two-Part Complementary Hypothesis (hereafter referred to as the TPCH test), advocating a differential approach to promoting gasoline efficiency: (1) an inverted U-shaped relationship between informality and gasoline inefficiency, and (2) a U-shaped relationship between government

The Shanghai crude oil futures market, known as INE, has achieved significant success in trading volume and is increasingly recognized as a nascent crucial oil futures contract. As INE aims to serve as a pivotal global pricing reference, evaluating the dynamic characteristics of its pricing capability is essential for comprehending the evolving market landscape. This study initiates with foundational

This paper explores the link between geopolitical risks and energy prices crash risk. Studying energy price crashes is important given the sharp fall in oil prices in 2008 and 2014. The analysis focuses on three energy markets: natural gas, oil, and coal, while it employs two measures: the negative coefficient of skewness and the down-to-up volatility, to construct proxies for crash risks. The period

Although energy saving for a firm is very important, the R&D literature has rarely discussed this issue. This paper provides a vertically-related model to analyze how conducting energy-saving R&D affects the upstream firm's pricing decision and downstream firm's energy-saving and output decisions. We show that an increase in energy price may induce the downstream firm to purchase more energy, but less

An extensive literature establishes the resource curse, the paradoxical tendency of societies with more natural resources to have worse economic outcomes. Our formal model extends the resource curse literature in several ways. First, there may exist a general tendency for resources to crowd out private production while still increasing consumption and welfare. We establish this relation without assuming

Rural areas of sub-Saharan Africa have experienced limited progress towards the sustainable development goal of universal access to clean cooking. Energy-efficient biomass cookstoves (EEBCs) are considered a potential bridge technology, but EEBC models vary widely, and there is a lack of understanding about their real-world use implications. We conduct a randomized controlled trial in rural Senegal

Climate policy uncertainty (CPU), driven by the need to address climate extremes and environmental degradation, significantly impacts the strategic corporate investments (CI) of energy firms. This study examines the influence of CPU on CI within the energy sector, with a particular focus on the moderating role of corporate social responsibility (CSR). Utilizing an empirical approach and a dataset of

In this article, I analyze how persistently lower gasoline prices in Poland affect the prices set in the German border region. Based on a complete dataset of German gasoline prices and an assessment of driving distances between gasoline stations, I estimate the impact of one additional kilometer of distance to the nearest Polish competitor on the price charged by German gasoline stations. Following

In current remanufacturing supply chains, whether the original equipment manufacturer (OEM) independently engages in remanufacturing or delegating (authorizing or outsourcing) to a third-party remanufacturer (TPR) is influenced by the government's differentiated carbon tax. However, our understanding of the factors influencing the optimal choice among the three remanufacturing strategies (i.e., self-remanufacturing

We employ dynamic time warping (DTW), a non-parametric pattern recognition technique based on a dynamic programming algorithm, to analyze whether futures markets for crude oil and natural gas have facilitated price discovery over the last decade. Should futures prices absorb and reflect information before spot prices, they will move first and lead spot prices, suggesting that they dominate spot prices

In today's interconnected commodity markets, understanding volatility spillover dynamics is crucial. This research builds on Diebold & Yilmaz (2012, 2014) to estimate System Resilience, a vital measure for investors and policymakers. By using connectedness-based estimates, a unique stability score for each system component is constructed and aggregated to estimate overall System Resilience. This concept

The aim of this paper is to assess the impact on the Polish economy of energy price shocks arising after the Russian invasion of Ukraine. We computed both the impact of the energy shocks (separately for gas, oil and coal prices) on the real side of the economy, and the pass-through of energy prices to the overall price level. The former part of the analysis was simulated using a computable general

We study the effect of oil price shocks on bond risk premia. Based on Baumeister and Hamilton (2019), we identify the different sources of oil price shocks using a structural vector autoregressive (SVAR) model of the global market for crude oil. These structural factors are then used as unspanned factors in an affine term structure model based on the representation of Joslin et al. (2014). This is

Operational decisions relying on predictive distributions of electricity prices can result in significantly higher profits compared to those based solely on point forecasts. However, the majority of models developed in both academic and industrial settings provide only point predictions. To address this, we examine three postprocessing methods for converting point forecasts of day-ahead electricity

This paper proposes a novel Multi-scale Interval-valued Decomposition Ensemble (MIDE) framework for forecasting European Union Allowance (EUA) carbon futures prices, which integrates Noise-assisted Multivariate Empirical Mode Decomposition (NAMEMD), Interval-valued Vector Auto-Regressive (IVAR) model, Interval Event Analysis (IEA) method, and Interval Multi-Layer Perceptron (IMLP). First, the original

In our previous publication “Assessing the effectiveness of energy efficiency measures in the residential sector gas consumption through dynamic treatment effects: Evidence from England and Wales”, we analyzed the impact of the implementation of energy efficiency (EE) measures, in particular loft insulation and cavity walls, on household gas consumption up to five years after installation. Upon review

International climate policy risk spillovers occur when expected changes to climate policy stringency in one country affect expected climate policy stringency in another country. We develop an event study procedure to identify such spillovers in emissions trading systems, specifically examining the impact from the United States (US) to the European Union (EU). Distinguishing between policy events likely

Over the past, all the big economies across the world are focusing on attainment of objectives of COP27 and COP28 and USA is forefront among them. Therefore, present study aims to unraveling the role of renewable energy, energy innovation, climate change and green financial development in mapping and shaping the energy transition system in the USA. In view of this, study utilizes annual data of said

Green investments play a crucial role in fighting climate change and facilitating the shift towards a low-carbon economy in line with goals of the Paris Agreement. This paper focuses on the U.S. green energy sector, analyzing its underlying risk dynamics, especially during crisis periods. In this paper, we employ a novel green energy time-varying beta (GETVB) to assess the risk profiles of U.S. green

This study investigates the relationship between bank boards' characteristics and their commitment to divest from fossil fuels. Using data on worldwide listed banks from 2016 to 2022, the results show a positive influence of board gender diversity on bank divestment from fossil fuel companies. We find that this result holds even following numerous robustness tests. A sub-sample analysis reveals that

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This paper contributes to the literature on crude oil risk premiums by providing ex-ante measures of these premiums using survey oil price expectations over an extended period. These ex-ante premiums are uncorrelated with ex-post premiums commonly used in existing studies, whereas they are more relevant as they directly influence investors' decision-making. Utilizing a portfolio choice model, we explain

Jurisdictions have implemented a variety of policy instruments to mitigate greenhouse gas emissions. However, interactions between overlapping climate policies can lead to unintended impacts. This study demonstrates how interactions between an incomplete emissions cap and additional climate policy can result in higher emissions and higher average abatement costs relative to an emissions cap alone.

This study investigates the impact of announcements relating to climate change mitigation in the US on the Energy Select Sector ETF (XLE), starting with the US president's net zero emissions announcement on 22 April 2021. We use options market data, in addition to ETF market data, to disaggregate the news effect and value effect of the announcement, finding a positive news effect ($1.65 billion) but

As the manufacturing industry is one of the largest contributors to global emissions, decarbonization of the production line is a key aspect in the fight against climate change. In this study, we examine the level of substitutability between fossil fuel and electricity. Using data on Japanese plants from 2004 to 2020, we estimate the elasticity of substitution between the two inputs and find that a

Due to their high visibility, petrol prices shape households' inflation expectations. This paper investigates the dynamic effects of petrol price shocks on one- and five-year inflation expectations in New Zealand; effects on headline and core inflation are also analyzed. Estimating partially identified structural vector autoregression models using Bayesian techniques, we show that petrol price shocks

This study examines the factors influencing daily electricity use in UK homes during the electricity market crisis. Using data from smart meters and socio-technical sources, the research identifies key drivers of electricity consumption, such as household size, weather conditions, and appliance use. Results from a sample of British homes, analyzed through linear mixed effects modeling, show that households

We examine the effects of energy usage on the return, volatility and jump processes in the Bitcoin (BTC) and Ethereum (ETH) markets. Our main finding indicates that while BTC returns respond significantly to changes in electricity consumption, the effect of electricity consumption on ETH returns is negligible. We attribute this discrepancy to BTC's relative energy inefficiency, which contrasts with

The intermittency and volatility of renewable electricity pose challenges to supply reliability, which is not conducive to renewable energy consumption. To ensure a reliable electricity supply, more governments implement subsidy policies to promote the adoption of innovative technologies by renewable energy producers to enhance supply reliability. We compare two types of subsidies provided by a government:

Adverse selection problem due to asymmetry of consumer environmental awareness (CEA) could reduce electricity retailer's profit and obstructs renewable energy (RE) consumption. This study analyzes mechanism design problem of retailer constricted by RE consumption quota to incentive consumers display true CEA in competitive retail market. Based on principal-agent theory, we develop an extended principal-agent

The Paris Agreement, signed in 2015, sets ambitious goals for diminishing greenhouse gas emissions and restricting the rise in global temperature to achieve a less carbon-intensive and climate-resilient global economy. The Paris Agreement marked a defining moment in the worldwide response to global warming and has significantly affected the financial sector. Given this background, this research explores

We explain agents' trading behaviors and market outcomes in the presence of endowment effects intensified by expectations-based loss aversion in carbon cap and trade. Building on Kőszegi and Rabin (2006)’s model with forward-looking reference points, we show how firms' concerns about high future compliance costs (through loss aversion and uncertainty) can cause a gap between Willingness-to-Pay and