 Tail risks of energy transition metal prices for commodity pricesJuan Reboredo, Andrea Ugolini and Javier Ojea-Ferreiro Resources Policy, 2024, vol. 93, issue C Abstract: Energy transition requires huge amounts of critical metals —called energy transition metals (ETMs)— to deploy clean energy technologies. The growing demand for ETMs and uncertainties regarding the path to net-zero emissions could cause ETM price oscillations, with potential effects on the prices of other commodities. We explore whether upward and downward movements in ETM prices have a neutral effect on the level and volatility of energy and non-energy commodity prices. By characterizing the conditional dependence between ETM and commodity prices, we document that, except for natural gas, extreme ETM price changes have a non-neutral effect on commodity prices, although this effect vanishes for non-extreme price movements. The implications of this evidence for investors operating in commodity markets are evaluated in terms of commodity risk-adjusted returns, commodity tail risk, and liquidity needs for trading in commodity futures contracts. Keywords: Tail risk; Commodity prices; Energy transition metals; Copulas (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jrpoli:v:93:y:2024:i:c:s0301420724004240 DOI: 10.1016/j.resourpol.2024.105057 Access Statistics for this article Resources Policy is currently edited by R. G. Eggert More articles in Resources Policy from Elsevier |
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