Climate policy uncertainty and the price dynamics of green and brown energy stocks

Elie Bouri, Najaf Iqbal*, Tony Klein

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review


Using the newly proposed textual-based climate policy uncertainty index of Gavriilidis (2021), we provide the first empirical evidence that climate policy uncertainty is a significant determinant of the performance of green energy stocks relative to brown energy stocks. The climate policy uncertainty effect is positive and driven by crisis periods. The findings highlight the predictive information of climate policy uncertainty for price dynamics of green and brown energy equity and underline its influence on the preference of investors for green energy stocks, which matters for asset pricing, style rotation strategies, and asset allocation.

Original languageEnglish
Article number102740
JournalFinance Research Letters
Early online date04 Mar 2022
Publication statusEarly online date - 04 Mar 2022

Bibliographical note

Funding Information:
Najaf Iqbal gratefully acknowledges the support from Academic Financial Aid Project for Top Talents in Universities of Anhui via grant number gxbjZD14 .

Publisher Copyright:
© 2022 Elsevier Inc.


  • Climate change
  • Climate policy uncertainty
  • Crisis periods
  • Green and brown energy stocks
  • Green equity

ASJC Scopus subject areas

  • Finance


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