Do geopolitical events transmit opportunity or threat to green markets? Decomposed measures of geopolitical risks

Sohag, Kazi; Hammoudeh, Shawkat; El-Sayed, Ahmed F.; Mariev, Oleg; Safonova, Yulia

doi:10.1016/j.eneco.2022.106068

Cited by 110 publications

(36 citation statements)

References 54 publications

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“…Therefore, balanced growth of

ET

dimensions stabilizes energy prices, promotes green finance (Sohag et al, 2022; Yang et al, 2021), and contributes to the ability of energy systems to transition towards non‐carbon‐based fuel portfolio and sustainable energy resources, mainly new and renewable energy sources (Yang et al, 2022). Specifically, green energy has the potential to decrease conflicts because its sources are abundant and widespread (Scholten et al, 2020; Vakulchuk et al, 2020).…”

Section: Resultsmentioning

confidence: 99%

Sustainable economic development and geopolitics: The role of energy trilemma policies

Shirazi

Fuinhas

Silva

2023

Sustainable Development

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This study reveals and supports the existence of a three-way connection between sustainable economic development (SED), geopolitical risks (GPRI), and the energy trilemma (ET). The impacts of ET on SED, and GPRI were analyzed using a regimeswitching vector autoregressive model. Results reveal mostly a positive impact of ET on SED. Consequently, decision-makers should design policies that promote ET to enhance economic growth and sustainability. However, decision-makers should acknowledge that uncertainty regarding the impact of these policies on SED and the time lag until their effects are felt in economies varies widely across regimes. Geopolitical risk reveals a slightly positive short-term reaction to ET under the slightly downward regime and a durable cyclical pattern in the sharply upward one. The cyclical impact of energy equity and security on GPRI is positive, while environmental sustainability reduces geopolitical risk. This fluctuating pattern of the response of GPRI to ET policies is compatible with prior research that shows these policies may either foster or mitigate geopolitical risk. Detailed knowledge of the differing impacts of ET-related policies on geopolitical risk is fundamental for decision-makers if they want the counteract some of their adverse effects and enhance geopolitical stability.

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“…Therefore, balanced growth of

ET

Section: Resultsmentioning

confidence: 99%

Sustainable economic development and geopolitics: The role of energy trilemma policies

Shirazi

Fuinhas

Silva

2023

Sustainable Development

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“…This approach is, therefore, appropriate for fat-tailed distributions. Finally , this technique allows higher lags to simultaneously estimate the association between two indicators regarding their duration and direction (Sohag et al. , 2022).…”

Section: Methodsmentioning

confidence: 99%

“…In addition, the cross-quantilogram can identify whether there is directional predictability between two-time series. More importantly, this technique shows the bearish and bullish states of the relationship between the variables with fat-tailed distribution under the bivariate modelling approach (Sohag et al. , 2022).…”

Section: Introductionmentioning

confidence: 99%

Food inflation and geopolitical risks: analyzing European regions amid the Russia-Ukraine war

Sohag

Islam

Žiković

et al. 2022

BFJ

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PurposeThe study's objective is to measure the response of the food prices to the aggregate and disaggregate geopolitical risk events, Russia's geopolitical risks and global energy prices in the context of two European regions, i.e. Eastern and Western Europe covering the monthly data from January 2001 to March 2022.Design/methodology/approachThe authors apply a novel and sophisticated econometric method, the cross-quantilogram (CQ) approach, to analyse the authors’ monthly data properties. This method detects the causal relationship between the variables under the bi-variate modelling approach. More importantly, the CQ procedure divulges the bearish and bullish states of the causal association between the variables under short, medium and long memories.FindingsThe authors find that aggregate measures of geopolitical risk reduce food prices in the short term in the Eastern Europe but increases food prices in the Western Europe. Besides, the decomposed measures of geopolitical risk “threats” and “acts” have heterogeneous effects on the food prices. More importantly, Russia's geopolitical risk events and global energy prices enhance the food inflation under long memory.Research limitations/implicationsThe authors provide diverse policy implications for Eastern and Western Europe based on the authors’ findings. First, the European policymakers should take concrete and joint policy measures to tackle the detrimental effects of geopolitical risks to bring stability to the food markets. Second, this region should emphasize utilizing their unused agricultural lands to grow more crops to avoid external dependence on food. Third, the European Union and its partners should begin global initiatives to help smallholder farmers because of their contribution to the resilience of disadvantaged, predominantly rural communities. Fourth, geopolitically affected European countries like Ukraine should deal with a crippled supply chain to safeguard their production infrastructure. Fifth, fuel (oil) scarcity in the European region due to the Russia-Ukraine war should be mitigated by searching for alternative sources (countries) for smooth food transportation for trade. Finally, as Europe and its Allies impose new sanctions in response to the Russia-Ukraine war, it can have immediate and long-run disastrous consequences on the European and the global total food systems. In this case, all European blocks mandate cultivating stratagems to safeguard food security and evade a long-run cataclysm with multitudinous geopolitical magnitudes for European countries and the rest of the world.Originality/valueThis is the maiden study that considers the aggregated and disaggregated measures of the geopolitical risk events, Russia's geopolitical risks and global energy prices and delves into these dynamics' effects on food prices. Notably, linking the context of the Russia-Ukraine war is a significant value addition to the existing piece of food literature.

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“…While at the local level, there are multiple concerns over the standard and procedural and distributive processes safeguarding the supply of carbon benefits to IPLCs (Ostrom, 2010;Delgado-Serrano and Ramos, 2015;Russel-Smith et al 2017). The long-term success of carbon offset projects and consistency in this local supply of benefits is also threatened by price volatility in carbon markets caused by geopolitical risks, climate change, and allowance allocations (Pascual and Elkind, 2010;Dalby, 2015;Qin et al 2020;Zeng et al 2021;Sohag et al 2022). Subsidiary benefits such as poverty alleviation, community resilience, biological diversity, and ecosystem restoration, are mostly assumed in feasibility assessments due to uncertainties in quantifying direct vs indirect benefits, and a lack of long-term data, appraisal methodologies, and metrics analysing benefits vs trade-offs (Corey et al 2019).…”

Section: Market Approachmentioning

confidence: 99%

Indigenous fire stewardship omitted from savanna burning emissions abatement schemes in East and Southern African savanna-protected areas

Croker

Woods

Kountouris

2023

Preprint

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Background Late dry-season wildfires in Sub-Saharan Africa’s savanna-protected areas are intensifying, increasing carbon emissions, and threatening ecosystem functioning. Addressing these challenges requires local community engagement and support for wildfire policy. Savanna burning emissions abatement schemes first implemented in Northern Australia have been proposed as a communitybased fire management strategy for East and Southern Africa’s (ESA) protected areas. Here we critically examine the application of savanna burning emissions abatement schemes in ESA, characterizing their contextual and implementation challenges. We argue that the effective transfer of the Northern Australian fire management model in ESA savannas is limited by political and institutional barriers, and hindered by the region’s recent colonial history, population growth, and consequences of rapid climatic change. Results We show that the application of Northern Australian savanna burning methodologies in ESA tend to adopt centrally determined objectives and market-based approaches, prescribe early dry season burns, and assume biodiversity co-benefits. These features restrict opportunities for indigenous leadership in fire management and income generation through carbon trading, and present multiple biogeophysical inconsistencies that jeopardize emissions mitigation potential. We suggest that future feasibility and scoping assessments address asymmetries between policy-relevant institutions and local land governance systems, explicitly acknowledging colonial legacies in institutional arrangements across protected areas and hierarchies in agrarian politics that threaten processes of equitable decentralisation in natural resource management. Conclusions To provide a community-based strategy, savanna burning schemes need to establish context specific legal frameworks and implement free, prior, and informed consent to safeguard the roles and responsibilities of indigenous and local peoples and their distribution of carbon benefits.

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Do geopolitical events transmit opportunity or threat to green markets? Decomposed measures of geopolitical risks

Cited by 110 publications

References 54 publications

Sustainable economic development and geopolitics: The role of energy trilemma policies

Sustainable economic development and geopolitics: The role of energy trilemma policies

Food inflation and geopolitical risks: analyzing European regions amid the Russia-Ukraine war

Indigenous fire stewardship omitted from savanna burning emissions abatement schemes in East and Southern African savanna-protected areas

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