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Nonlinear Effects of Climate Policy Uncertainty on Carbon Allowance and ESG Prices: Evidence From the US

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  • Sarker, Provash Kumer

Abstract

We examine the nonlinear effects of climate policy uncertainty (CPU) on California carbon allowance prices (CCA) and S&P 500 ESG stock prices (SPESG). We used the nonlinear ARDL method on monthly data from December 2013 to August 2022. Using inflation uncertainty and WTI oil prices as control variables, we found that increases in CPU positively affect carbon allowance and ESG stock prices in the short and long term.

Suggested Citation

  • Sarker, Provash Kumer, 2025. "Nonlinear Effects of Climate Policy Uncertainty on Carbon Allowance and ESG Prices: Evidence From the US," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 6(1), pages 1-7.
    • Handle: RePEc:zbw:espost:336647
    DOI: 10.46557/001c.94370
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    1. Wang, Jiqian & Li, Liang, 2023. "Climate risk and Chinese stock volatility forecasting: Evidence from ESG index," Finance Research Letters, Elsevier, vol. 55(PA).
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