Linkages among carbon emissions, renewable energy, stock markets, and economic growth: evidence from the G7 countries

Eleftheria Kostika and Nikiforos T. Laopodis

Chapter 11 in Handbook of Climate Change and Financial Markets, 2026, pp 188-216 from Edward Elgar Publishing

Abstract: This chapter discusses the dynamic relationships among carbon emissions, financial markets, and economic activity that have markedly intensified in recent years. We investigate the dynamic interactions among CO2, economic growth, the stock market, and renewable energy for the G7 countries over the period from 1990 to 2023 using vector autoregressive (VAR) and panel VAR models. When we examine all countries simultaneously, we find that CO2 emissions still boost GDP, but the impact on the stock markets is unclear. When the renewable energy variable is included, we found that it decreases CO2 emissions in the short- and long-run, but both GDP and the stock markets in the short-run only. The findings are useful for policymakers in understanding the interplay between CO2 emissions and renewable energy in evaluating the Paris Agreement goals and to act accordingly.

Keywords: Carbon emissions; Renewable energy; VAR model; Stock Markets; GDP (search for similar items in EconPapers)
Date: 2026
ISBN: 9781035340415
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.elgaronline.com/doi/10.4337/9781035340422.00019 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:elg:eechap:23637_11

Ordering information: This item can be ordered from
http://www.e-elgar.com

Access Statistics for this chapter

More chapters in Chapters from Edward Elgar Publishing
Bibliographic data for series maintained by Jack Sweeney ().