Global Evidence of Oil Supply Shocks and Climate Risk a GARCH-MIDAS Approach

Taofeek Ayinde and Farouq Adeyemi

Energy RESEARCH LETTERS, 2023, vol. 4, issue 2, 1-7

Abstract: The study examines the global evidence of oil supply shocks and climate risks. Using the GARCH-MIDAS regression and a dataset spanning the period 2000 – 2018, we find that oil supply shocks are a better predictor of climate risks than the inherent environmental factors. The evidence indicates that oil supply shocks dampen climate risk challenges through the reservation and conservation channels. To reduce oil supply shocks, the study recommends the deployment of moral suasions in oil resource-rich countries.

Keywords: Oil supply shocks; Global warming; Climate risk; GARCH-MIDAS; Predictability; Forecast evaluation (search for similar items in EconPapers)
JEL-codes: C53 E23 E27 F47 Q47 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:ayb:jrnerl:78

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