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Fostering a Sustainable Future: The Responsiveness of Green Energy Markets and the Green Economy to Crisis Periods

Naif Alsagr,Nasir Khan,R. El Khoury,Anis Omri

2025 · DOI: 10.1002/sd.70554
Sustainable Development · 0 Citations

Abstract

This study investigates the time‐ and state‐dependent relationships between geopolitical risk (GPR), economic policy uncertainty (EPU), and green financial markets—including green bonds, clean energy stocks, and regional green economy indices—across Asia, Europe, and the United States. Using daily data from January 1, 2013, to August 14, 2023, and employing the wavelet quantile correlation (WQC) approach, the analysis captures how dependence structures evolve across investment horizons (short, medium, long) and market states (normal vs. extreme conditions). The results reveal conditional time‐frequency connectedness and strong regional heterogeneity. Green bonds exhibit short‐term safe haven properties during heightened geopolitical risk, particularly in Europe, while clean energy assets show medium‐horizon hedging features in the United States and Asia. However, these protective behaviors are not consistent across all periods or quantiles, indicating that green assets cannot be assumed to offer universal safe haven properties. These findings highlight the need for region‐specific, horizon‐sensitive policy frameworks and underscore that managing green financial markets under uncertainty requires recognizing the context‐dependent nature of asset resilience rather than relying on broad generalizations.