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Monetary policy shocks and sectoral heterogeneity in clean energy markets

Jacoub Sleibi Orcid Logo

Journal of Environmental Management, Volume: 395, Start page: 127868

Swansea University Author: Jacoub Sleibi Orcid Logo

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DOI (Published version): 10.1016/j.jenvman.2025.127868

Abstract

Clean energy transitions are central to achieving global sustainability goals, yet their progress depends partly on how macroeconomic forces shape green financial markets. This paper investigates the impact of US monetary policy shocks on nineteen clean energy stock indices from 2010 to 2023. Using...

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Published in: Journal of Environmental Management
ISSN: 0301-4797 1095-8630
Published: Elsevier BV 2025
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URI: https://cronfa.swan.ac.uk/Record/cronfa70833
Abstract: Clean energy transitions are central to achieving global sustainability goals, yet their progress depends partly on how macroeconomic forces shape green financial markets. This paper investigates the impact of US monetary policy shocks on nineteen clean energy stock indices from 2010 to 2023. Using panel factor models and structural Bayesian VARs, we identify a significant common factor that explains up to 60% of the sectoral variation. However, sectoral responses are heterogeneous: energy storage, green IT, and wind stocks react positively, while smart grid, green building, and transportation stocks respond negatively to monetary policy shocks. These results indicate that monetary policy can shift resources toward specific clean energy sectors but also reveal the vulnerability of other sectors to financial conditions, creating potential barriers to achieving environmental objectives.
Keywords: Clean energy stocks; Monetary policy; Common factors; Renewable energy
College: Faculty of Humanities and Social Sciences
Funders: Swansea University
Start Page: 127868

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