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How do climate policy uncertainty and renewable energy and clean technology stock prices co-move? evidence from Canada

Author

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  • Seyed Alireza Athari

    (European University of Lefke
    Holy Spirit University of Kaslik)

  • Dervis Kirikkaleli

    (European University of Lefke
    Lebanese American University)

Abstract

This work probes the dynamic co-movement between the Climate Policy Uncertainty Index (CPU) and the Renewable Energy and Clean Technology Index (RECT) employing the novel wavelet power spectrum (WPS) and wavelet coherence (WC) approaches for monthly data between 2013 and 2022. Using the wavelet approach enables us to observe the causality direction from both time and frequency dimensions and also to help detect the causal linkage in the short-medium and long-term horizons. This is the first study aiming to perform this relationship from both time and frequency dimensions. Remarkably, findings reveal that: i) CPU seems only volatile in 2019 and 2021 in the short run; (ii) there was significant volatility in the RECT in the short and long terms (SLT) between 2018 and 2022; (iii) RECT significantly caused the CPU between 2014 and 2018; iv) after 2019, CPU started to cause RECT in the short and medium terms (SMT).

Suggested Citation

  • Seyed Alireza Athari & Dervis Kirikkaleli, 2025. "How do climate policy uncertainty and renewable energy and clean technology stock prices co-move? evidence from Canada," Empirical Economics, Springer, vol. 68(1), pages 353-371, January.
    • Handle: RePEc:spr:empeco:v:68:y:2025:i:1:d:10.1007_s00181-024-02643-7
    DOI: 10.1007/s00181-024-02643-7
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