COVID-19 Pandemic Exacerbates Interconnections Between Carbon Emissions and Clean Energy Markets

Strategic Insights -

A recent study from the University of New Orleans has revealed that the COVID-19 pandemic and the Russia-Ukraine conflict have increased the interconnections between carbon emissions and both clean energy and non-clean commodity markets. The research analyzed data from January 1, 2022, to September 30, 2023, and utilized the Vector Autoregressive (VAR) model and an innovative quantile connectedness framework to uncover a substantial degree of cross-market risk transmission, exceeding 80%. This implies that the shocks from the COVID-19 pandemic and the Russia-Ukraine conflict have heightened the interconnections between carbon emissions and both clean energy and non-clean commodity markets.

Key Takeaways:

  • The research explored the impact of five green energy subsectors and five commodity indices on restricted carbon emissions within five cities and provinces: Beijing, Guangdong, Hubei, Shanghai, and Shenzhen.
  • The study analyzed data reflecting the fluctuation in CO2 emissions during three significant periods: the Covid-19 pandemic, the Russia-Ukraine conflict, and the China recession.
  • The research uncovered a substantial degree of cross-market risk transmission, exceeding 80%, particularly during and after the Covid-19 pandemic.
  • The shocks from the Covid-19 pandemic and the Russia-Ukraine conflict have heightened the interconnections between carbon emissions and both clean energy and non-clean commodity markets.
  • The research utilized the Vector Autoregressive (VAR) model and an innovative quantile connectedness framework to analyze the data.
  • The study concluded that the nexus between Chinese carbon markets and energy and non-energy commodity markets is complex and needs to be re-examined.
  • The research has significant implications for policymakers and investors seeking to mitigate the impact of climate change.
  • The study suggests that a more integrated and coordinated approach is needed to address the challenges posed by the COVID-19 pandemic and climate change.

Statistics:

  • 80%: The degree of cross-market risk transmission uncovered by the research, particularly during and after the Covid-19 pandemic.
  • January 1, 2022, to September 30, 2023: The period analyzed in the study.
  • Beijing, Guangdong, Hubei, Shanghai, and Shenzhen: The five cities and provinces analyzed in the study.
  • 5 green energy subsectors and 5 commodity indices: The types of data analyzed in the study to determine their impact on restricted carbon emissions.

Sources:

  • NewsRx LLC. Researchers at University of New Orleans Have Reported New Data on COVID-19 (Re-examining the Nexus Between Chinese Carbon Markets With Energy and Non-energy Commodity Markets In a Novel Risk Spillover Network Approach). Global Warming Focus. September 1, 2025; p 268.
  • Re-examining the Nexus Between Chinese Carbon Markets With Energy and Non-energy Commodity Markets In a Novel Risk Spillover Network Approach. Pacific-basin Finance Journal, 2025; 92.
  • University of New Orleans. Department of Economics.