Analyzing the network structure of risk transmission among renewable, non-renewable energy and carbon markets

Sen Qiao, Zi Xin Guo, Zhang Tao and Zheng Yu Ren

Renewable Energy, 2023, vol. 209, issue C, 206-217

Abstract: The linkage of renewable, non-renewable energy and carbon markets is increasing, and there is a complex network structure for the risk transmission among multiple markets. Based on the methods of network topology analysis and DY spillover index, this paper analyzes the time-varying spillover effect and network structure of risk transmission among renewable, non-renewable energy and carbon markets. The results show that: according to the static spillover index, there are significant spillover effects among renewable, non-renewable energy and carbon markets, and they are asymmetric. Moreover, the total spillover index further shows that the spillover effect between energy and carbon markets is time-varying, especially during the extreme events. Specifically, the net spillover index shows that the spillover effects among renewable, non-renewable energy and carbon markets are bidirectional, asymmetric and time-varying. Additionally, under the influence of various extreme events, the spillover effect and network structure of risk transmission among renewable, non-renewable energy and carbon markets are heterogeneous. Compared with the shale oil revolution and the Sino-US trade dispute, the influence of COVID-19 is more significant and complex, and it is long-term and comprehensive. Finally, some policy implications for preventing risk transmission and optimizing the energy structure to promote emission reduction are put forward.

Keywords: Time-varying spillover effects; Network structure; Risk transmission; Diebold-yilmaz spillover index; Network topology analysis (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:renene:v:209:y:2023:i:c:p:206-217

DOI: 10.1016/j.renene.2023.03.133

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