Green bonds and clean energy stocks: Safe havens against global uncertainties? A wavelet quantile-based examination

Chaker Aloui, Sami Mejri, Hela Ben Hamida and Ramazan Yildirim

The North American Journal of Economics and Finance, 2025, vol. 76, issue C

Abstract: The renewable energy sector has seen rapid investment growth over the last decade, with Green Bonds (GB) and Clean Energy Stocks (CLE) emerging as critical components of sustainable finance. Using daily data from 2013 to 2023, this study investigates the diverse roles of GB and CLE as potential safe havens under Geopolitical Risks (GEO) and Economic Policy Uncertainty (ECU). Applying an advanced Wavelet Quantile Regression (WQR) approach, we assess their effectiveness across different time horizons and risk conditions. The findings reveal that GB consistently offer stronger protection against economic risks, particularly in the short to mid-term, while CLE are more effective in shielding against geopolitical risks. Over longer periods, GB maintain their safe haven status, while CLE’s protective capabilities diminish. The results also highlight that GB and CLE behave differently across quantiles, with GB showing stability across extreme market conditions, making it a more reliable hedge overall. This study offers valuable policy insights for key stakeholders. Policymakers are encouraged to integrate GB and CLE into sustainable finance strategies, investors can mitigate risk by blending these assets, and portfolio managers should adjust allocations dynamically based on evolving market conditions. The results underscore the importance of green assets as hedges in times of global uncertainty, contributing to the growing literature on sustainable finance.

Keywords: Safe haven; Geopolitical risk; Green bonds; Clean energy stocks; Economic uncertainty; Quantile wavelets (search for similar items in EconPapers)
JEL-codes: C10 C50 C58 E44 F39 G01 G15 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:76:y:2025:i:c:s1062940824002353

DOI: 10.1016/j.najef.2024.102310

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