Publication in Annals of Operations Research

Tom Dudda and Dr. Thomas Walther published a new article in Annals of Operations Research titled “Climate risk and the nexus of clean energy and technology stocks”. The article emerged in collaboration with Dr. Lavinia Rognone and Prof. Dr. Elie Bouri.

The authors examine the impact of climate risks on the nexus of clean energy and technology stocks using a time-varying correlation model. The increasing climate risks may lead to a growing perception of the urgency for a technology-driven energy transition to mitigate the adverse effects of climate change. The authors find that physical and transition climate risks are positively associated with the long-term correlation between clean energy and technology stock indices. The climate risks increase the long-term correlation between the two markets with the transition risk being more relevant as it is more robust to different sample periods and alternative stock indices. On the contrary, the short-term correlation tends to decrease after shocks to physical risk since clean energy stocks react more strongly to physical risk shocks than technology stocks.