Can energy-related uncertainty serve as a barometer for carbon pricing?
This investigation examines the reciprocal connection between energy-related uncertainty (EUI) and carbon trading prices (CTP). Empirical results indicate that EUI can positively affect CTP. This positive impact confirms that high EUI prompts businesses to increase demand for carbon emissions permi...
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| Format: | Article |
| Language: | English |
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Institute of Economic Research SAS
2025-06-01
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| Series: | Ekonomický Časopis |
| Subjects: | |
| Online Access: | https://journals.savba.sk/index.php/ekonomickycasopis/article/view/3495 |
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| _version_ | 1849221964271452160 |
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| author | Chi Wei Su Yue Song Xin Qin Meng Santiago Budría |
| author_facet | Chi Wei Su Yue Song Xin Qin Meng Santiago Budría |
| author_sort | Chi Wei Su |
| collection | DOAJ |
| description |
This investigation examines the reciprocal connection between energy-related uncertainty (EUI) and carbon trading prices (CTP). Empirical results indicate that EUI can positively affect CTP. This positive impact confirms that high EUI prompts businesses to increase demand for carbon emissions permits to cope with energy market risks, ultimately driving up CTP. The intertemporal capital asset pricing framework explains the findings. Conversely, the relationship between EUI and CTP is beneficial and detrimental, demonstrating that ongoing carbon market development contributes to energy market stabilisation and lowers EUI. However, disputes over energy supply and demand can undermine this effect. Within sustainable development, these findings contribute to governments employing EUI to indicate the effectiveness of carbon pricing policies, thereby better addressing energy market risks. Simultaneously, businesses can regard EUI as a signal to anticipate future carbon pricing changes and take corresponding risk management measures.
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| format | Article |
| id | doaj-art-c9c78cedaaa44a67af22ccd36de5bddc |
| institution | Kabale University |
| issn | 0013-3035 2729-7470 |
| language | English |
| publishDate | 2025-06-01 |
| publisher | Institute of Economic Research SAS |
| record_format | Article |
| series | Ekonomický Časopis |
| spelling | doaj-art-c9c78cedaaa44a67af22ccd36de5bddc2025-08-26T10:30:26ZengInstitute of Economic Research SASEkonomický Časopis0013-30352729-74702025-06-01731-210.31577/ekoncas.2025.01-02.02Can energy-related uncertainty serve as a barometer for carbon pricing?Chi Wei Suhttps://orcid.org/0000-0001-9722-8105Yue Song Xin https://orcid.org/0009-0004-8767-467XQin Menghttps://orcid.org/0009-0009-2863-3743Santiago Budríahttps://orcid.org/0000-0001-5537-4059 This investigation examines the reciprocal connection between energy-related uncertainty (EUI) and carbon trading prices (CTP). Empirical results indicate that EUI can positively affect CTP. This positive impact confirms that high EUI prompts businesses to increase demand for carbon emissions permits to cope with energy market risks, ultimately driving up CTP. The intertemporal capital asset pricing framework explains the findings. Conversely, the relationship between EUI and CTP is beneficial and detrimental, demonstrating that ongoing carbon market development contributes to energy market stabilisation and lowers EUI. However, disputes over energy supply and demand can undermine this effect. Within sustainable development, these findings contribute to governments employing EUI to indicate the effectiveness of carbon pricing policies, thereby better addressing energy market risks. Simultaneously, businesses can regard EUI as a signal to anticipate future carbon pricing changes and take corresponding risk management measures. https://journals.savba.sk/index.php/ekonomickycasopis/article/view/3495Carbon trading priceEnergy-related uncertaintyRolling-windowTime-varying |
| spellingShingle | Chi Wei Su Yue Song Xin Qin Meng Santiago Budría Can energy-related uncertainty serve as a barometer for carbon pricing? Ekonomický Časopis Carbon trading price Energy-related uncertainty Rolling-window Time-varying |
| title | Can energy-related uncertainty serve as a barometer for carbon pricing? |
| title_full | Can energy-related uncertainty serve as a barometer for carbon pricing? |
| title_fullStr | Can energy-related uncertainty serve as a barometer for carbon pricing? |
| title_full_unstemmed | Can energy-related uncertainty serve as a barometer for carbon pricing? |
| title_short | Can energy-related uncertainty serve as a barometer for carbon pricing? |
| title_sort | can energy related uncertainty serve as a barometer for carbon pricing |
| topic | Carbon trading price Energy-related uncertainty Rolling-window Time-varying |
| url | https://journals.savba.sk/index.php/ekonomickycasopis/article/view/3495 |
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