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Climate Policy Uncertainty and Metal Price Dynamics

de Graaf, Emma Kristina LU (2025) NEKP01 20251
Department of Economics
Abstract
This study investigates the effects of climate policy uncertainty (CPU) shocks on metal spot prices from 1990 to 2025 using impulse response analysis within a Vector Auto-Regressive (VAR) framework. The results indicate that price responses are time-varying and heterogeneous across metals. Overall, CPU shocks are found to have contemporaneous negative effects with short-term persistence. Although generally modest in magnitude, these effects appear to be stronger during periods of heightened uncertainty and financial market stress. In recent years of elevated climate policy uncertainty, the responses of metal price returns have shifted, with the negative impact diminishing. These findings indicate that climate policy uncertainty influences... (More)
This study investigates the effects of climate policy uncertainty (CPU) shocks on metal spot prices from 1990 to 2025 using impulse response analysis within a Vector Auto-Regressive (VAR) framework. The results indicate that price responses are time-varying and heterogeneous across metals. Overall, CPU shocks are found to have contemporaneous negative effects with short-term persistence. Although generally modest in magnitude, these effects appear to be stronger during periods of heightened uncertainty and financial market stress. In recent years of elevated climate policy uncertainty, the responses of metal price returns have shifted, with the negative impact diminishing. These findings indicate that climate policy uncertainty influences metal price dynamics and represents a relevant dimension of climate transition risks in commodity markets. (Less)
Please use this url to cite or link to this publication:
author
de Graaf, Emma Kristina LU
supervisor
organization
course
NEKP01 20251
year
type
H2 - Master's Degree (Two Years)
subject
keywords
Climate policy uncertainty, metal price dynamics, impulse response analysis
language
English
id
9212380
date added to LUP
2025-12-08 08:40:48
date last changed
2025-12-08 08:40:48
@misc{9212380,
  abstract     = {{This study investigates the effects of climate policy uncertainty (CPU) shocks on metal spot prices from 1990 to 2025 using impulse response analysis within a Vector Auto-Regressive (VAR) framework. The results indicate that price responses are time-varying and heterogeneous across metals. Overall, CPU shocks are found to have contemporaneous negative effects with short-term persistence. Although generally modest in magnitude, these effects appear to be stronger during periods of heightened uncertainty and financial market stress. In recent years of elevated climate policy uncertainty, the responses of metal price returns have shifted, with the negative impact diminishing. These findings indicate that climate policy uncertainty influences metal price dynamics and represents a relevant dimension of climate transition risks in commodity markets.}},
  author       = {{de Graaf, Emma Kristina}},
  language     = {{eng}},
  note         = {{Student Paper}},
  title        = {{Climate Policy Uncertainty and Metal Price Dynamics}},
  year         = {{2025}},
}