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Geopolitical risk, wartime economic policy uncertainty, and carbon intensity

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  • Sarker, Provash Kumer

Abstract

We examine how geopolitical risk and wartime economic policy uncertainty affect carbon intensity (CI) in the United States. Using monthly data from 2000 to 2024 and employing a Quantile Vector Error Correction Model (QVECM) with the Caldara-Iacoviello Geopolitical Risk Index (GPR) and Brochet et al.’s adjusted Economic Policy Uncertainty index (AEPU), we uncover pronounced asymmetries across carbon intensity distributions. Error correction speeds exhibit a U-shaped pattern, with the strongest adjustments at extreme quantiles (24.5% at the 95th percentile) and the weakest around the median. Geopolitical risk increases carbon intensity during high-emission periods while policy uncertainty reduces it at both extremes. These findings highlight the need for distribution-sensitive climate policies during geopolitical crises

Suggested Citation

  • Sarker, Provash Kumer, 2026. "Geopolitical risk, wartime economic policy uncertainty, and carbon intensity," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 15(3), pages 202-214.
    • Handle: RePEc:zbw:espost:342380
    DOI: 10.17811/ebl.15.3.2026.202-214
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    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models

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