Impact of Climate Policy Uncertainty, Clean Energy Index, and Carbon Emission Allowance Prices on Bitcoin Returns

Samet Gürsoy, Bartosz Jóźwik (), Mesut Dogan, Feyyaz Zeren and Nazligul Gulcan
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Samet Gürsoy: Custom Business Department, Bucak Zeliha Tolunay School of Applied Technology and Management, Mehmet Akif Ersoy University, Bucak 15300, Turkey
Bartosz Jóźwik: Department of International Economics, Institute of Economics and Finance, The John Paul II Catholic University of Lublin, 20-950 Lublin, Poland
Mesut Dogan: Vocational School of Bozuyuk, Banking and Insurance, Bilecik Seyh Edebali University, Bozuyuk 11300, Turkey
Feyyaz Zeren: Department of International Trade and Finance, Faculty of Economics and Administrative Sciences, Yalova University, Yalova 77100, Turkey
Nazligul Gulcan: Department of Accounting and Finance, Bucak Faculty of Business Administration, Burdur Mehmet Akif Ersoy University, Bucak 15300, Turkey

Sustainability, 2024, vol. 16, issue 9, 1-14

Abstract: This research aimed to investigate the relationship between climate policy uncertainty (CPU), clean energy (ENERGY), carbon emission allowance prices (CARBON), and Bitcoin returns (BTC) for the period from August 2012 to August 2022. The empirical analysis strategies utilized in this study included the Fourier Bootstrap ARDL long-term coefficient estimator, the Fourier Granger Causality, and the Fourier Toda–Yamamoto Causality methods. Following the confirmation of cointegration among the variables, we observed a positive relationship between BTC and CARBON, a positive relationship between BTC and CPU, and a negative relationship between BTC and ENERGY. In terms of causal associations, we identified one-way causality running from CARBON to BTC, BTC to CPU, and BTC to the ENERGY variable. The study underscores the potential benefits and revenue opportunities for investors seeking diversified investment strategies in light of climate change concerns. Furthermore, it suggests actionable strategies for policymakers, such as implementing carbon taxes and educational campaigns, to foster a transition towards clean energy sources within the cryptocurrency mining sector and thereby mitigate environmental impacts.

Keywords: carbon emission allowance; climate policy uncertainty; clean energy index; bitcoin (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
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