Chasing the ‘green bandwagon’ in times of uncertainty
Emilios Galariotis and
Energy Policy, 2021, vol. 151, issue C
The transition to a low-carbon economy poses significant challenges for investors in energy markets, entailing higher uncertainty and not just higher risks. On the back of the ongoing greening in investment preferences, we focus on investors' group behaviour with respect to U.S. energy equities, which lie at the crossroads in this energy transition phase from an old technology that relies heavily on oil, to a new, greener one. Based on a dynamic herding metric, we find that changes in investors' behaviour with respect to green asset allocations require a better information set than in the case of crude oil allocations, for which only information on returns is a relevant driver of behaviour. We argue that policy uncertainty is better than financial risk proxies in reflecting the multidimensional nature of uncertainty and the various risks associated with investing in green energy today. Our findings suggest the need to reduce uncertainty stemming from the policy realm, given its raising impact on investors’ portfolios on the back of higher allocations towards greener assets.
Keywords: Dynamic herding; Pricing dynamics; Green energy; Crude oil (search for similar items in EconPapers)
JEL-codes: C24 G14 G15 Q40 (search for similar items in EconPapers)
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed
Downloads: (external link)
Full text for ScienceDirect subscribers only
Working Paper: Chasing the ‘green bandwagon’ in times of uncertainty (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:151:y:2021:i:c:s0301421521000598
Access Statistics for this article
Energy Policy is currently edited by N. France
More articles in Energy Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().