IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v216y2023ics0960148123007978.html
   My bibliography  Save this article

Effects of COVID-19 on green bonds, renewable power stocks, and carbon markets: A dynamic spillover analysis

Author

Listed:
  • Zhang, LiXia
  • Baloch, Zulfiqar Ali
  • Niu, Guangli

Abstract

This study investigates the effects of the COVID-19 pandemic on green bonds, carbon pricing, and renewable energy equities. It uses daily data from January 4, 2015, to September 22, 2020. The dataset includes the price indices for Standard and Green Bond, Selective International Solar, Wind, S&P Global Sustainable Energy, and Carbon to explore return spillover and connectedness. This study investigates the use of the TVP-VAR approach with least variance collection by economic events. Additionally, a spillover dynamic connectedness model was implemented for robustness. Our findings indicate that the implied dynamic connectedness and effectiveness of green-bound assets are long- and short-term positions in the green bound against volatilities. Specifically, clean energy uses connectedness as the primary net transmitter of shocks from green bond markets and renewable energy during COVID-19. This study provides evidence that a high interconnection between green bonds highlights multivariate portfolios. Finally, the green bound, with the lowest dynamic connectedness information regarding the return transmission process, was useful for renewable energy, during the COVID-19 pandemic, a similar pattern was found.

Suggested Citation

  • Zhang, LiXia & Baloch, Zulfiqar Ali & Niu, Guangli, 2023. "Effects of COVID-19 on green bonds, renewable power stocks, and carbon markets: A dynamic spillover analysis," Renewable Energy, Elsevier, vol. 216(C).
    • Handle: RePEc:eee:renene:v:216:y:2023:i:c:s0960148123007978
    DOI: 10.1016/j.renene.2023.06.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0960148123007978
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.renene.2023.06.021?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.

    References listed on IDEAS

    as
    1. Zhang, Dongyang & Mohsin, Muhammad & Rasheed, Abdul Khaliq & Chang, Youngho & Taghizadeh-Hesary, Farhad, 2021. "Public spending and green economic growth in BRI region: Mediating role of green finance," Energy Policy, Elsevier, vol. 153(C).
    2. Xiuzhen, Xie & Zheng, Wenxiu & Umair, Muhammad, 2022. "Testing the fluctuations of oil resource price volatility: A hurdle for economic recovery," Resources Policy, Elsevier, vol. 79(C).
    3. Gunther Glenk & Stefan Reichelstein, 2019. "Publisher Correction: Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(4), pages 347-347, April.
    4. Samantha Darling & Blane Harvey & Gordon M. Hickey, 2022. "Advancing Pluralism in Impact Assessment Through Research Capacity: Lessons from the Yukon Territory, Canada," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-35, June.
    5. Gunther Glenk & Stefan Reichelstein, 2019. "Economics of converting renewable power to hydrogen," Nature Energy, Nature, vol. 4(3), pages 216-222, March.
    6. Matraeva, Lilia & Solodukha, Petr & Erokhin, Sergey & Babenko, Maria, 2019. "Improvement of Russian energy efficiency strategy within the framework of "green economy" concept (based on the analysis of experience of foreign countries)," Energy Policy, Elsevier, vol. 125(C), pages 478-486.
    7. Ang, James B., 2007. "CO2 emissions, energy consumption, and output in France," Energy Policy, Elsevier, vol. 35(10), pages 4772-4778, October.
    8. Xiaohang Ren & Jianing Qin & Kangyin Dong, 2022. "How Does Climate Policy Uncertainty Affect Excessive Corporate Debt? The Case of China," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-36, June.
    9. Liddell, Christine & Morris, Chris & McKenzie, S.J.P. & Rae, Gordon, 2012. "Measuring and monitoring fuel poverty in the UK: National and regional perspectives," Energy Policy, Elsevier, vol. 49(C), pages 27-32.
    10. Soytas, Ugur & Sari, Ramazan, 2006. "Energy consumption and income in G-7 countries," Journal of Policy Modeling, Elsevier, vol. 28(7), pages 739-750, October.
    11. repec:dau:papers:123456789/3881 is not listed on IDEAS
    12. Mahadevan, Renuka & Asafu-Adjaye, John, 2007. "Energy consumption, economic growth and prices: A reassessment using panel VECM for developed and developing countries," Energy Policy, Elsevier, vol. 35(4), pages 2481-2490, April.
    13. Huang, Xiao & Huang, Shoujun & Shui, Ailun, 2021. "Government spending and intergenerational income mobility: Evidence from China," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 387-414.
    14. Carlos Miguel Ferreira & Maria José Sá & José Garrucho Martins & Sandro Serpa, 2020. "The COVID-19 Contagion–Pandemic Dyad: A View from Social Sciences," Societies, MDPI, vol. 10(4), pages 1-19, October.
    15. Long Liu & Zhichao Li & Xinyi Fu & Xuan Liu & Zehao Li & Wenfeng Zheng, 2022. "Impact of Power on Uneven Development: Evaluating Built-Up Area Changes in Chengdu Based on NPP-VIIRS Images (2015–2019)," Land, MDPI, vol. 11(4), pages 1-21, March.
    16. Joseph K. Maithya & Felix L. M. Ming’ate & Sammy C. Letema, 2022. "The Impact of Wetland Utilisation on Provisioning Ecosystem Services in Nyando Wetland, Kenya," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-24, March.
    17. Bui Huy Nhuong & Phung Thanh Quang, 2022. "Are FDI Inflows Crucial for Environmental Protection in Various Asian Regions?," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 24(02), pages 1-18, June.
    18. Farzaneh Ahmadian-Yazdi & Mahsa Mesgarani & Soheil Roudari, 2022. "Natural Resource Rents and Social Capital Interaction: New Evidence on the Role of Financial Development," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-30, March.
    19. Brigitte Dormont & Michel Grignon & Hélène Huber, 2006. "Health expenditure growth: reassessing the threat of ageing," Health Economics, John Wiley & Sons, Ltd., vol. 15(9), pages 947-963, September.
    20. Agyekum, Ephraim Bonah & Amjad, Fahd & Mohsin, Muhammad & Ansah, Michael Nii Sanka, 2021. "A bird's eye view of Ghana's renewable energy sector environment: A Multi-Criteria Decision-Making approach," Utilities Policy, Elsevier, vol. 70(C).
    21. Chong, Chin Hao & Tan, Wei Xin & Ting, Zhao Jia & Liu, Pei & Ma, Linwei & Li, Zheng & Ni, Weidou, 2019. "The driving factors of energy-related CO2 emission growth in Malaysia: The LMDI decomposition method based on energy allocation analysis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 115(C).
    22. Huang, Shoujun & Liu, Hezhe, 2021. "Impact of COVID-19 on stock price crash risk: Evidence from Chinese energy firms," Energy Economics, Elsevier, vol. 101(C).
    23. Lorrana Lopes Diniz & Phillipe Mota Machado & Juliano Silva Lima & Leonardo Lopes Costa & Igor David Da Costa & Ilana Rosental Zalmon, 2022. "Coastal Scenery Quality: A Management Tool for Sandy Beaches," Journal of Environmental Assessment Policy and Management (JEAPM), World Scientific Publishing Co. Pte. Ltd., vol. 24(01), pages 1-32, March.
    24. Mohsin, Muhammad & Taghizadeh-Hesary, Farhad & Panthamit, Nisit & Anwar, Saba & Abbas, Qaiser & Vo, Xuan Vinh, 2021. "Developing Low Carbon Finance Index: Evidence From Developed and Developing Economies," Finance Research Letters, Elsevier, vol. 43(C).
    25. Felder, Stefan & Werblow, Andreas, 2008. "Do the age profiles of health care expenditure really steepen over time? New evidence from Swiss cantons," Dresden Discussion Paper Series in Economics 05/08, Technische Universität Dresden, Faculty of Business and Economics, Department of Economics.
    26. Mitchell Hoffman, 2011. "Does Higher Income Make You More Altruistic? Evidence from the Holocaust," The Review of Economics and Statistics, MIT Press, vol. 93(3), pages 876-887, August.
    27. Li, Zhipeng & Zhou, Xiaoyu & Huang, Shoujun, 2021. "Managing skill certification in online outsourcing platforms: A perspective of buyer-determined reverse auctions," International Journal of Production Economics, Elsevier, vol. 238(C).
    28. Stefan Felder & Andreas Werblow, 2008. "Does the Age Profile of Health Care Expenditure Really Steepen over Time? New Evidence from Swiss Cantons," The Geneva Papers on Risk and Insurance - Issues and Practice, Palgrave Macmillan;The Geneva Association, vol. 33(4), pages 710-727, October.
    29. Hsiao-Hsien Lin & I-Cheng Hsu & Tzu-Yun Lin & Le-Ming Tung & Ying Ling, 2022. "After the Epidemic, Is the Smart Traffic Management System a Key Factor in Creating a Green Leisure and Tourism Environment in the Move towards Sustainable Urban Development?," Sustainability, MDPI, vol. 14(7), pages 1-22, March.
    30. Si, Deng-Kui & Li, Xiao-Lin & Huang, Shoujun, 2021. "Financial deregulation and operational risks of energy enterprise: The shock of liberalization of bank lending rate in China," Energy Economics, Elsevier, vol. 93(C).
    31. Syeda Hassan & Khalid Zaman & Sajid Zaman & Muhammad Shabir, 2014. "Measuring health expenditures and outcomes in saarc region: health is a luxury?," Quality & Quantity: International Journal of Methodology, Springer, vol. 48(3), pages 1421-1437, May.
    32. Nejat, Payam & Jomehzadeh, Fatemeh & Taheri, Mohammad Mahdi & Gohari, Mohammad & Abd. Majid, Muhd Zaimi, 2015. "A global review of energy consumption, CO2 emissions and policy in the residential sector (with an overview of the top ten CO2 emitting countries)," Renewable and Sustainable Energy Reviews, Elsevier, vol. 43(C), pages 843-862.
    33. Sims, Christopher A, 1972. "Money, Income, and Causality," American Economic Review, American Economic Association, vol. 62(4), pages 540-552, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ozkan, Oktay & Sunday Adebayo, Tomiwa & Usman, Ojonugwa, 2024. "Dynamic connectedness of clean energy markets, green markets, and sustainable markets: The role of climate policy uncertainty," Energy, Elsevier, vol. 303(C).
    2. Wu, Ruirui & Qin, Zhongfeng, 2024. "Asymmetric volatility spillovers among new energy, ESG, green bond and carbon markets," Energy, Elsevier, vol. 292(C).
    3. Qi, Shaozhou & Pang, Lidong & Qi, Tianbai & Zhang, Xiaoling & Pirtea, Marilen Gabriel, 2024. "The correlation between the green bond market and carbon trading markets under climate change: Evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 203(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ma, Mengjuan & Zhu, Xiao & Liu, Meishan & Huang, Xiaodong, 2023. "Combining the role of green finance and environmental sustainability on green economic growth: Evidence from G-20 economies," Renewable Energy, Elsevier, vol. 207(C), pages 128-136.
    2. Jianhe Wang & Mengxing Cui & Lei Chang, 2023. "Evaluating economic recovery by measuring the COVID-19 spillover impact on business practices: evidence from Asian markets intermediaries," Economic Change and Restructuring, Springer, vol. 56(3), pages 1629-1650, June.
    3. Wu, Qihan & Yan, Dong & Umair, Muhammad, 2023. "Assessing the role of competitive intelligence and practices of dynamic capabilities in business accommodation of SMEs," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 1103-1114.
    4. Dong, Chunlong & Wu, Hao & Zhou, Jianwen & Lin, Huifang & Chang, Lei, 2023. "Role of renewable energy investment and geopolitical risk in green finance development: Empirical evidence from BRICS countries," Renewable Energy, Elsevier, vol. 207(C), pages 234-241.
    5. Ruan, Shuai & Wan, Guofeng & Le, Xilin & Zhang, Shanshan & Yu, Chao, 2023. "Combining the role of the banking sector and natural resource utilization on green economic development: Evidence from China," Resources Policy, Elsevier, vol. 83(C).
    6. Li, ChangZheng & Umair, Muhammad, 2023. "Does green finance development goals affects renewable energy in China," Renewable Energy, Elsevier, vol. 203(C), pages 898-905.
    7. Wang, Jiangbo & Xue, Yefei & Han, Mingyang, 2023. "Impact of carbon emission price and natural resources development on the green economic recovery: Fresh insights from China," Resources Policy, Elsevier, vol. 81(C).
    8. Lin, Chao & Cai, Peipei, 2023. "Analyzing the impacts of natural resource utilization and green economic growth in China: Evidence from a econometric analysis," Resources Policy, Elsevier, vol. 81(C).
    9. Yu, Yiling, 2023. "Role of Natural resources rent on economic growth: Fresh empirical insight from selected developing economies," Resources Policy, Elsevier, vol. 81(C).
    10. Cai, Lu & Le, Thanh Tiep, 2023. "Natural resources and financial development: Role of corporate social responsibility on green economic growth in Vietnam," Resources Policy, Elsevier, vol. 81(C).
    11. Bi, Mingxiong, 2023. "Impact of COVID-19 on environmental regulation and economic growth in China: A Way forward for green economic recovery," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 1001-1015.
    12. Puxin Liu, 2023. "An assessment of financial mechanisms for green financial recovery and climate change mitigation: the case of China," Economic Change and Restructuring, Springer, vol. 56(3), pages 1567-1584, June.
    13. Wang, Yunxian & Wang, Xin & Zhang, Zheng & Cui, Zhanmin & Zhang, Yuan, 2023. "Role of fiscal and monetary policies for economic recovery in China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 51-63.
    14. Ma, Cong & Cheok, Mui Yee & Chok, Nyen Vui, 2023. "Economic recovery through multisector management resources in small and medium businesses in China," Resources Policy, Elsevier, vol. 80(C).
    15. Guohua Liu & Mohammed Arshad Khan & Ahsanuddin Haider & Moin Uddin, 2022. "Financial Development and Environmental Degradation: Promoting Low-Carbon Competitiveness in E7 Economies’ Industries," IJERPH, MDPI, vol. 19(23), pages 1-16, December.
    16. Yinqiao Li, 2023. "Role of banking sector in green economic growth: empirical evidence from South Asian economies," Economic Change and Restructuring, Springer, vol. 56(4), pages 2437-2454, August.
    17. An, Zhengzhen & Zhao, Yue & Zhang, Yanfei, 2023. "Mineral exploration and the green transition: Opportunities and challenges for the mining industry," Resources Policy, Elsevier, vol. 86(PA).
    18. Jin Sheng & Yubin Gao, 2023. "Combining the financial development and stock market return for green economic recovery in selected developing economies," Economic Change and Restructuring, Springer, vol. 56(6), pages 3885-3908, December.
    19. Wu, Fan & Wang, Xingguo & Liu, Tao, 2023. "Sustainable development goals, natural resources and economic growth: Evidence from China," Resources Policy, Elsevier, vol. 83(C).
    20. Shuang Cai, 2023. "Impact of digitization on green economic recovery: an empirical evidence from China," Economic Change and Restructuring, Springer, vol. 56(5), pages 3139-3161, October.

    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:renene:v:216:y:2023:i:c:s0960148123007978. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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.journals.elsevier.com/renewable-energy .

    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.