The macroeconomic effects of climate policy uncertainty: Evidence from Portugal

Hugo Morão

No 2025/0394, Working Papers REM from ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa

Abstract: Thisstudyexaminesthemacroeconomicimpactofpolicyuncertaintyinclimatedecisionmaking. It employs data mining to 23 Portuguese news sources to construct a novel monthly Climate Policy Uncertainty (CPU) series, which is then used in a Structural Vector Autoregression (SVAR) model to analysis its macroeconomic effects. These responses collectively reveal significant economic restructuring in response to climate policy uncertainty. The combination of reduced industrial production and increased unemployment suggests substantial supply-side adjustment costs during the transition. However, the positive stock market response indicates that financial markets view these changes as ultimately beneficial for certain sectors, particularly those aligned with environmental sustainability.

Keywords: Climate policy; Textual analysis; Policy uncertainty; Portugal; SVAR. (search for similar items in EconPapers)
JEL-codes: C32 E32 E61 F18 G18 L66 Q54 (search for similar items in EconPapers)
Date: 2025-09
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Persistent link: https://EconPapers.repec.org/RePEc:ise:remwps:wp03942025

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