The volatility of global energy uncertainty: Renewable alternatives

Cem Işık, Bekhzod Kuziboev, Serdar Ongan, Olimjon Saidmamatov, Mokhirakhon Mirkhoshimova and Alibek Rajabov

Energy, 2024, vol. 297, issue C

Abstract: Fluctuations in energy markets affect all economic activities by affecting energy prices and investment decisions. This study is the first attempt to investigate the energy-related uncertainty (volatility) in the world using the newly developed energy-related uncertainty index (EUI). The ARCH (autoregressive conditional heteroskedasticity) and GARCH (generalized autoregressive conditional heteroskedasticity) models are applied for this investigation between 1996 and 2021. The ARCH model reveals that global energy uncertainty is highly volatile, with a coefficient of 0.63. As policy implications, fostering the transition process to renewable energy and a green economy is recommended. The rise of renewable energy can reduce energy dependency and uncertainty in energy markets since they are less sensitive to exogenous shocks and fossil fuel price fluctuations. Understanding this uncertainty helps policymakers develop more effective energy policies, increase energy security and a sustainable environment, and maintain economic stability. The proposal to increase renewable energy in this study also aligns with the United Nation's SDG7 (Affordable and Clean Energy), which aims to improve the share of renewable energy by 2030.

Keywords: EUI; Affordable and clean energy; Energy-related uncertainty index; Renewable energy; ARCH & GARCH (search for similar items in EconPapers)
JEL-codes: Q40 Q43 Q47 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544224010235
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:297:y:2024:i:c:s0360544224010235

DOI: 10.1016/j.energy.2024.131250

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().