Browsing by Author "Tiwari, Aviral Kumar"

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Analyzing the static and dynamic dependence among green investments, carbon markets, financial markets and commodity markets
(International Journal of Managerial Finance, 2025-01-17) Abakah, Emmanuel Joel Aikins; Tiwari, Aviral Kumar; Oliyide, Johnson Ayobami; Appiah, Kingsley Opoku
Purpose This paper investigates the static and dynamic directional return spillovers and dependence among green investments, carbon markets, financial markets and commodity markets from January 2013 to September 2020. Design/methodology/approach This study employed both the quantile vector autoregression (QVAR) and time-varying parameter VAR (TVP-VAR) technique to examine the magnitude of static and dynamic directional spillovers and dependence of markets. Findings Results show that the magnitude of connectedness is extremely higher at quantile levels (q = 0.05 and q = 0.95) compared to those in the mean of the conditional distribution. This connotes that connectedness between green bonds and other assets increases with shock size for both negative and positive shocks. This further indicates that return shocks spread at a higher magnitude during extreme market conditions relative to normal periods. Additional analyses show the behavior of return transmission between green bond and other assets is asymmetric. Practical implications The findings of this study offer significant implications for portfolio investors, policymakers, regulatory authorities and investment community in terms of carefully assessing the unique characteristics offered by each markets in terms of return spillovers and dependence and diversifying the portfolios. Originality/value The study, first, uses a relatively new statistical technique, the QVAR advanced by Ando et al. (2018), to capture upper and lower tails’ quantile price connectedness and directional spillover. Therefore, the results possess adequate power against departure from mean-based conditional connectedness. Second, using a portfolio of green investments, carbon markets, financial markets and commodity markets, the uniqueness of this study lies in the examination of the static and dynamic dependence of the markets examined.
Assessing the impact of renewable energy and non-renewable energy use on carbon emissions: evidence from select developing and developed countries
(Environment, Development and Sustainability, 2025-02) Rai, Pratibha; Gupta, Priya; Saini, Neha; Tiwari, Aviral Kumar
Renewable Energy (RE) is essential for balancing economic and environmental conditions to attain Sustainable Development Goals (SDGs). This paper investigates the relationship between carbon emissions (CO2) and RE use, considering Non-renewable Energy (NRE) and macroeconomic variables such as Foreign Direct Investment, Gross Domestic Product, and Trade in eight major polluting nations from 1990 to 2019, constrained by data idiosyncratic features. The Error Correction Model using Autoregressive Distributed Lag methodology reveals that RE effectively lowers carbon emissions on average, but high economic growth and NRE use significantly contribute to environmental degradation. Additionally, while a reduction in CO2 emissions with RE use is evident through panel data analysis using the random-effect model. However, country-wise and panel data analyses do not substantiate the Environmental Kuznets Curve (EKC) hypothesis. The study confirms a long-run cointegrated relationship among the variables. It highlights the necessity for tailored energy innovations, as the weak validation of the overemphasized EKC hypothesis indicates that a generic solution is only sometimes applicable for mitigating emissions that facilitate the achievement of SDGs. This inquiry contributes to the extant literature by providing a nuanced understanding of the associations amongst macroeconomic variables, renewable and non-renewable energy consumption, and carbon emissions and offers critical insights for policy formulation. The requirement of indispensable energy innovations to achieve SDGs is emphasized. It is necessary to decrease the share of NRE use in total energy consumption and to increase the percentage share of RE use.
Asymmetry in returns and volatility between green financial assets, sustainable investments, clean energy, and international stock markets
(Research in International Business and Finance, 2025-01) Doğan, Buhari; Jabeur, Sami Ben; Tiwari, Aviral Kumar; Abakah, Emmanuel Joel Aikins
This paper presents empirical evidence on the asymmetric relationship between green investments and international stock markets. We employ the asymmetric versions of Diebold and Yilmaz (2012) and Barunik and Krehlik (2018) for time-frequency connectedness, analyzing daily returns and volatilities from June 23, 2009, to June 23, 2022. Our study reveals significant time-frequency asymmetries in returns and volatility spillovers between green investments and developed equity markets in the short and long term. Regarding net directional spillovers, the equity markets in the United States, the United Kingdom, Italy, Germany, and France emerge as net transmitters of shocks. In contrast, green investments, notably those in sustainability and the environment, act primarily as net emitters of shocks. China and Japan are the primary recipients of these shocks. Meanwhile, green bonds generally function as net receivers of shocks, with occasional exceptions.
Carbon neutrality: Synergy for energy transition, circular economy and inclusive green growth
(Journal of Environmental Management, 2025-02) Shobande, Olatunji A.; Ogbeifun, Lawrence; Tiwari, Aviral Kumar
The relentless surge in carbon emissions is exacting a devastating toll on human wellbeing, critical infrastructure, and natural ecosystems, leaving a stark and distressing legacy of destruction. Communities worldwide are reeling from the impacts of pervasive smog, record-breaking wildfires, and deadly heatwaves—manifestations of a climate crisis that grows more severe by the day. Once a vanguard of environmental policy, the Organisation for Economic Co-operation and Development (OECD) now struggles with exceeding emissions targets, eroding its credibility and influence. Fragmented implementation of key frameworks—such as Inclusive Green Growth, the Circular Economy, and Energy Transition—has undermined their impact. The urgency of the moment was underscored by the report of COP29, which issued an unequivocal call to action for OECD nations to step up and lead with ambitious, unified strategies. Embracing inclusive green growth (IGG)—a paradigm that harmonizes economic development with environmental sustainability and social equity—offers a clear path forward. By integrating these elements into a cohesive response, the OECD can reignite its leadership role and drive meaningful progress toward a sustainable future. This paper advocates for a unified strategy integrating IGG, CE, and ET to achieve carbon neutrality. It introduces a streamlined environmental model designed to assess the effectiveness of this integrated approach rigorously. Drawing on data from 24 countries between 2000 and 2020, and employing advanced time series and dynamic analysis, this study offers theoretical and empirical insights into the interactions among the key variables. The results show that integrated policies significantly enhance the effectiveness of green growth and energy transitions, ensuring equitable benefits across all societal segments, including marginalized communities. By addressing the complex, interrelated nature of sustainability challenges, these policies offer a robust framework consolidating diverse perspectives and expertise, driving transformative and profound change.
Corporate sustainability practices: An interplay of uncertainty, geopolitical risk and competition
(Journal of Environmental Management, 2025-03) Bhue, Rajesh; Gartia, Umakanta; Panda, Ajaya Kumar; Tiwari, Aviral Kumar
The present study analyses the interplay between uncertainty and sustainability investment in the line of PMC (product market competition), and its impact on the firms' sustainable practices. Based on a sample of 2533 listed companies from 2011 to 2023, it was observed that uncertainty positively influences sustainable investment, and the PMC plays a moderating role in the case of G-20 countries. Furthermore, the research indicates that sustainable investment promotes long-term investment in G-20 countries during the study period and lessens the unfavorable outcome of uncertainty on a firm's value. We employed SGMM (System-generalized method of moments) to concern about the endogeneity issues and for robustness, which was consistent with the empirical results. The study's implications help investors, managers, and policymakers integrate sustainable investment practices with uncertainty alongside pushing sustainable development goals.
Crude oil Price forecasting: Leveraging machine learning for global economic stability, Technological Forecasting and Social Change,
(Technological Forecasting and Social Change, 2025-07) Rao, Amar; Sharma, Gagan Deep; Tiwari, Aviral Kumar; Hossain, Mohammad Razib; Dev, Dhairya
The volatility of the energy market, particularly crude oil, significantly impacts macroeconomic indices, such as inflation, economic growth, currency exchange rates, and trade balances. Accurate crude oil price forecasting is crucial to risk management and global economic stability. This study examines various models, including GARCH (1,1), Vanilla LSTM, GARCH (1,1) LSTM, and GARCH (1,1) GRU, to predict Brent crude oil prices using different time frequencies and sample periods. The LSTM and GARCH (1,1)-GRU hybrid models showed superior performance, with LSTM slightly better in predictive accuracy and GARCH (1,1)-GRU in minimizing squared errors. These findings emphasize the importance of precise crude oil price forecasting for the global energy market and manufacturing sectors that rely on crude oil prices. Accurate forecasting helps ensure economic sustainability and stability and prevents disruptions to production and distribution chains in both developed and emerging economies. Policymakers may choose to implement energy security measures in response to the significant impact of crude oil price volatility on the macroeconomic indicators. These measures could include maintaining strategic reserves, diversifying energy sources, and decreasing the dependence on volatile oil markets. By doing so, a country's ability to handle oil price fluctuations and ensure a stable energy supply can be enhanced.
Do Environmental, Social, and Governance (ESG) practices help mitigate bank default risk?
(Journal of Environmental Management, 2025-04) Biswas, Abhijit; Das, Arindam; Tiwari, Aviral Kumar; Patro, Archana
The study aims to investigate the ESG practices and bank default risk nexus in India, considering both short-term and long-term perspectives. Employing panel data covering 27 Indian banks spanning from 2012–13 to 2021–2022, the research utilizes the two-step ‘system GMM’ approach to examine the nexus above. A bank's ESG practices are found to be associated negatively with its default risk. This association holds for individual pillars of ESG, except for the environmental pillar. Notably, no evidence supports reverse causality, indicating that a bank's default risk does not appear to impact its ESG practices. The findings align with the hypothesis that ESG practices help mitigate default risk in banks. Embracing this hypothesis could provide policymakers and regulators with a foundation for influencing banks to integrate ESG practices into their operational frameworks more extensively. The consistent sign of coefficients for the ESG variables across short-run and long-run periods suggests stability in the relationship between ESG variables and bank default risk. However, the long-run coefficients exert a more substantial impact than their short-run counterparts. Therefore, strategically adopting ESG practices can fetch a competitive advantage by reducing default risk for banks, especially over the long term. Given the time required for ESG initiatives to yield results, evaluating their impact on bank default risk is most effectively accomplished with a focus on the long term. Among the ESG pillars, the Governance (G) pillar exhibits the most potent negative impact. In contrast, the Environment (E) pillar demonstrates the mildest negative effect on bank default risk in both short-run and long-run contexts. These outcomes are expected as governance significantly influences a bank's risk-taking behaviour, while the direct environmental impacts of banking activities tend to be relatively limited.
Does financial development support renewable energy consumption: Evidence from the UK
(Renewable Energy, 2025-04-15) Demirtas, Cuma; Tiwari, Aviral Kumar; Soyu Yıldırım, Esra
This study explores the effects of financial development on the use of renewable energy (RE) in the United Kingdom (UK) between 1980 and 2020, by taking control variables such as urbanization and economic growth into account. For this purpose, wavelet transforms and the fresh Fourier quantile causality test are employed. Our empirical findings demonstrate that both immediately and over time, the use of renewable energy (REC) is stimulated by financial development. Additionally, financial institutions' efficiency and market depth play a significant role in encouraging the REC. In line with the study's general conclusions, it is suggested that the UK should implement policies that increase the spread and effectiveness of financial institutions and financial markets in order to support environmental quality. By using novel approaches, the study investigates the effects of six sub-indicators, namely the effectiveness, depth, and accessibility of financial markets and institutions on the REC.
Does Water Stress Impact GDP Per Capita Growth in the Long Run: A Study of Highly Water-Stressed Nations Over the Period
(Springer Proceedings in Business and Economics, Financial Markets, Climate Risk and Renewables, 2024-12-15) Sharma,Jyoti; Tiwari, Aviral Kumar
Water scarcity is becoming a bigger issue worldwide, and how we manage water has become a major concern for governments in many countries because it is important for economic growth and societal stability. The purpose of this study is to analyse the effects of water stress on the gross domestic product per capita growth (GDPpcg) of the 16 highly water-stressed countries belonging to the Middle East and Africa over the period of 2001–2020. The study utilizes panel data approaches/methods such as pooled, fixed effect (FE), and random effect (RE). The overall empirical findings indicate that water stress and population growth are negatively associated with GDPpcg in these highly water-stressed nations. The total water productivity and annual freshwater withdrawals (billion cubic meters) are positively associated with the GDPpcg in these highly water-stressed nations. Results support the impact of demographic profiles, such as age distribution having a positive effect on GDPpcg, whereas, in FE estimation, population density has a negative impact on GDPpcg. This study comprehensively analyses the multifaceted relationship between water stress and GDP per capita growth. Policymakers may consider prioritizing investments in water-efficient technologies, infrastructure development, and agricultural practices to mitigate the adverse effects of water stress on economic growth.
Dynamics of the relationship between stock markets and exchange rates during quantitative easing and tightening
(Financial Innovation, 2025-01-06) Ahmadian-Yazdi, Farzaneh; Sokhanvar, Amin; Roudari, Soheil; Tiwari, Aviral Kumar
This study utilizes two complementary models, the Time-Varying Parameter Vector Autoregressive Diebold–Yilmaz (TVP-VAR-DY) and the Time-Varying Parameter Vector Autoregressive Baruník–Křehlík (TVP-VAR-BK), to investigate the dynamic volatility transmission between exchange rates and stock returns in major commodity-exporting and -importing countries. The analysis focuses on periods of quantitative easing (QE) and quantitative tightening (QT) from March 15, 2020 to December 30, 2022. The countries examined are Canada and Australia (major commodity exporters) and the UK and Germany (major commodity importers). An essential contribution of this paper is new empirical insights into the dynamics of stock market returns and the transmission of volatility between these markets and exchange rates during the QE and QT periods. The results reveal that causality primarily flows from stock markets to exchange rates, especially during the QT period across all investment horizons. The Toronto Stock Exchange (TSX) emerges as the principal net driver among the markets under study. Furthermore, the Canadian exchange rate (USDCAD) and the Australian Stock Exchange (ASX) are the most significantly affected indices within the network across various investment horizons (excluding the long-term). These findings underscore the importance for investors and policymakers to consider the interplay between exchange rates and stock market returns, particularly in the context of the QE and QT periods, as well as other economic, political, and health-related events. Our findings are relevant to various stakeholders, including governments, traders, portfolio managers, and multinationals.
Environmental, social and governance-type investing: a multi-stakeholder machine learning analysis
(Management Decision, 2025-03-26) Jaiswal, Rachana; Gupta, Shashank; Tiwari, Aviral Kumar
Purpose This research delves into the determinants influencing the adoption of environmental, social and governance (ESG) investing through an analysis of social media dialogs using the uses and gratification theory. Design/methodology/approach This study employs a mixed-methods approach, integrating sentiment analysis, topic modeling, clustering, causal loop analysis and ethnography to examine ESG-related content on social media. Analyzing social media data, study identified key themes and derived ten propositions about ESG investing. Industry professionals, financial advisors and investors further validated these findings through expert interviews. Combining data-driven analysis and qualitative insights provides a comprehensive understanding of how social media shapes investor preferences and decision-making in the ESG domain. Findings Environmental aspects, such as conservation, preservation of natural resources, renewable and clean energy, biodiversity, restoration and eco-friendly products and technologies, shape attitudes toward ESG investing. Social considerations, including inclusivity, diversity, social justice, human rights, stakeholder engagement, transparency, community development and philanthropy, significantly influence ESG investing sentiments. Governance elements such as transparency, accountability, ethical governance, compliance, risk management, regulatory compliance and responsible leadership also play a pivotal role in shaping ESG investing opinions. Practical implications This study presents actionable insights for policymakers and organizations by identifying key constructs in ESG investing and proposing an integrated framework that includes mediating factors like resource efficiency and stakeholder engagement alongside moderating elements such as regulatory environment and investor preferences. Policymakers should establish standardized ESG reporting frameworks, incentivize sustainable practices and use social media data for regulatory purposes. For businesses, integrating social media insights into decision-making can enhance ESG communication strategies and accountability. These measures will foster greater transparency, strengthen investor relations and contribute to a more sustainable and inclusive global economy. Originality/value To the authors' best knowledge, this is the first study to investigate improving ESG investing preferences based on big data mined from social media platforms.
Gasoline Prices and Presidential Approval Ratings of the United States
(American Politics Research, 2025-09) Gupta, Rangan; Pierdzioch, Christian; Tiwari, Aviral Kumar
We use random forests, a machine-learning technique, to formally examine the link between real gasoline prices and presidential approval ratings of the United States (US). Random forests make it possible to study this link in a completely data-driven way, such that nonlinearities in the data can easily be detected and a large number of control variables, in line with the extant literature, can be considered. Our empirical findings show that the link between real gasoline prices and the presidential approval ratings is indeed nonlinear, and that the former even has predictive value in an out-of-sample exercise for the latter. We argue that our findings are in line with the so-called pocketbook mechanism, which stipulates that the presidential approval ratings depend on gasoline prices because the latter have sizable impact on personal economic situations of voters
Geopolitical risk and real estate stock crash
(Finance Research Letters, 2025-06) Abakah, Emmanuel Joel Aikins; Abdullah, Mohammad; Akinsomi, Omokolade; Tiwari, Aviral Kumar
We investigate the effect of geopolitical risk (GPR) on real estate stock crashes while accounting for the impact of cash holdings and financial constraints in this relationship. Using a dataset from 28 countries covering the period of 2000 to 2023 from 1805 firms, we document that geopolitical risk increases real estate stock price crash risk. Our result remains consistent using an alternate proxy of geopolitical risk and even after considering endogeneity concerns using 2SLS and Entropy balanced samples. Our result shows the negative impact of GPR is stronger for firms with high cash holdings and high financial constraints.
How do economies decarbonize growth under finance-energy inequality? Global evidence
(Energy Economics, 2025-02) Tiwari, Aviral Kumar; Trinh, Hai Hong; Hong Vo, Diem Thi; Sharma, Gagan Deep
The study investigates the multidecade complexity between economic growth and carbon emissions across income groups and regions for 180 economies over the past decades. We find that the global economy has been decarbonizing its economic growth. The effects of growth on decarbonization are conditional on outcome distributions. The Paris Agreement (COP21) and renewable energy consumption (REC) are robust mechanisms toward green growth. Financial development (FD) presents its moderation to decarbonized growth. The study makes the following novel contributions to prior literature streams. First, complex GDP-CO2 nexuses are conditional on green factors and decarbonization is foremost for our global inclusive growth. Second, the friendliness of FD to the environment relies on green transition. It is worth noting that financial institutions and markets are exposed to climate risk drivers leading to our great challenge to promote green finance. Decarbonization is our global and constant efforts toward inclusive growth. Under finance-energy inequality, renewable energy capacity and finance are critical to decarbonized economic growth.
How do systematic risk spillovers reshape investment outcomes?
(Finance Research Letters, 2025-04) Tao, Miaomiao; Roubaud, David; Tiwari, Aviral Kumar; Silva, Emilson
We investigate the effects of domestic and cross-border systematic risk spillovers on corporate investment metrics, using stock indices comprising 212 energy firms across 36 countries, spanning July 1, 2009, to August 31, 2023, sourced from S&P Global Commodity Insights®. The two-layered network underscores the catastrophic consequences induced by the Russia–Ukraine conflict in Europe. Our regression results designate that systematic risk spillovers composed of domestic and cross-border risks hinder corporate real investments while encouraging new investments and diminishing inefficiencies. Yet geopolitical risk amplifies these risks, leading to broader disruptions in investment behaviors.
How do systematic risk spillovers reshape investment outcomes?
(Finance Research Letters, 2025-04) Tao, Miaomiao; Roubaud, David; Tiwari, Aviral Kumar; Silva, Emilson
We investigate the effects of domestic and cross-border systematic risk spillovers on corporate investment metrics, using stock indices comprising 212 energy firms across 36 countries, spanning July 1, 2009, to August 31, 2023, sourced from S&P Global Commodity Insights®. The two-layered network underscores the catastrophic consequences induced by the Russia–Ukraine conflict in Europe. Our regression results designate that systematic risk spillovers composed of domestic and cross-border risks hinder corporate real investments while encouraging new investments and diminishing inefficiencies. Yet geopolitical risk amplifies these risks, leading to broader disruptions in investment behaviors.
How does ownership of insiders and institutions affect future value? Influence of country-level governance
(International Journal of Disclosure and Governance, 2025-03) Panda, Brahmadev; Puri, Veerma; Tiwari, Aviral Kumar
This research explores the ways in which firm-level governance, specifically insider and institutional ownership, affects future value through the lens of agency theory. Then, we evaluate how country-level governance influences the value impact of insiders and institutions. Our analysis employs NIFTY-500 listed companies for 11 years, from 2010 to 2020. Findings suggest that the effect of insider ownership on future value is nonlinear, and the impact of institutional ownership is detrimental for the entire sample. Nonetheless, differential value impacts of insiders and institutions are observed between the insider and noninsider firms. We observe an inverted U-shaped and U-shaped effect of insiders on future value for insider and noninsider firms, respectively. Insider firms witness a declining value impact, while noninsider firms experience an incremental value impact from institutional investors. Further findings indicate that though country-level governance has little bearing on institutional investors, it effectively reduces insiders’ expropriation effect that enhances future value.
Investor attention and market activity: evidence from green cryptocurrencies
(Studies in Economics and Finance, 2025-04-18) Ahmed, Mohamed Shaker; Helmi, Mohamad Husam; Tiwari, Aviral Kumar; Al-Maadid, Alanoud
Purpose This paper aims to investigate the relationship between investor attention and market activity (return, volatility and volume) using a sample of 14 clean energy cryptocurrencies (hereafter green cryptocurrency), namely, Chia, Cardano, Stellar, Tron, Ripple, Nano, IOTA, EOS, Bitcoin Green, Alogrand, Hedara, Polkadot, FLOW and Tezos. Design/methodology/approach This paper use 26040 crypto-day observations and a range of econometric techniques, including Dynamic Granger causality, Panel vector autoregression (VAR), Impulse response function and the decomposition of forecast error variance. Findings Based on 26040 crypto-day observations, this paper finds a bidirectional Granger causal relationship between investor attention and all measures of market activity, namely, return, absolute volatility, squared volatility and volume. The panel VAR and impulse response function demonstrate that market activity in the green crypto ecosystem, especially volatility and volume, is considerably responsive to changes in investor attention proxied by Google search volume (hereafter Google search volume (GSV)). The findings also demonstrate a significant asymmetric effect of return and volume on investor attention since past negative shocks “or bad news” in return and volume are more likely to grab the investor’s attention. All in all, our study emphasizes the crucial role of investor attention in the green crypto ecosystem. Originality/value (i) The research is the first to shed light on investor attention in the green cryptocurrency market. (ii) The paper uses a wide range of green cryptocurrencies to offer a comprehensive picture of the green cryptocurrency ecosystem. (iii) This paper is the first to use the panel Granger causality to investigate investor attention in the cryptocurrency market which provides several advantages over the conventional Granger causality approach. (iv) This paper is the first to provide novel empirical evidence on the prevalent influence of investor attention in the green crypto market.
Markov-switching multifractal volatility spillovers among European stock markets during crisis periods
(Applied Economics, 2025) Tiwari, Aviral Kumar; Abakah, Emmanuel Joel Aikins; Dwumfour, Richard Adjei; Lee, Chi-Chuan
This research investigates time-varying volatility spillovers and connectedness among European stock markets during the COVID-19 pandemic and the Russia – Ukraine war, two events that destabilized global markets. With data from 20 European stock markets spanning 17 December 2019, to 17 March 2022, we employ the TVP-VAR model and estimate volatility using the Markov-switching multifractal volatility technique. Findings from log-volatility estimates suggest that markets are highly connected, with price movement driven mainly by spillover effects from other markets in the same region. Most emerging markets are net receivers of volatility, with most of Europe’s major markets being net transmitters of shocks. The COVID-19 pandemic appears to have impacted European stock markets more than the Russia – Ukraine war. Shifting to the results obtained based on MSM volatility estimates, we find that markets strongly correlate for both high and low volatility. In the case of a high volatility regime, we document the dominance of Finland, Denmark, and Iceland over major European markets. In contrast, under a low volatility regime, we note the dominance of major markets, including the UK and France, over emerging markets in Europe. The findings reveal the diversification potential of emerging European stock markets.
Net-zero transitions: Advancing dynamic econometric analysis of carbon tax, renewable energy, and circular economy on government actions
(Journal of Environmental Management, 2025-04) Shobande, Olatunji A.; Ogbeifun, Lawrence; Tiwari, Aviral Kumar
Delayed government action is driving society towards a climate disaster. Without urgent and coordinated efforts to achieve net-zero emissions, the frequency and severity of wildfires, floods, and droughts will continue to escalate. Despite the increase in net-zero commitments, many governments still lack clear policies and decisive leadership, weakening initiatives and threatening a sustainable future for generations to come. This study examines the role of carbon taxes, renewable energy, and circular economy practices in shaping effective government actions and policies. Our empirical approach employs advanced econometric methods, integrating time-series analysis and dynamic modelling. We begin by analysing the behaviour of the data using time-series methods, followed by the application of standard panel specifications, including Pooled Ordinary Least Squares (POLS), fixed effects, Roger panel regression, White panel regression, and Driscoll-Kraay standard errors. To investigate both long- and short-term relationships, we employ Generalized Method of Moments (GMM) dynamic analysis, incorporating the augmented Arellano-Bond, Ahn-Schmidt, Arellano-Bond, and Arellano-Bover/Blundell-Bond estimators. Additionally, we use the TL-moment-adapted Machado-Silva Quantile via Moment regression model to examine asymmetric distribution patterns and heterogeneity across different data ranges. To enhance predictive accuracy, properly control for endogeneity, and correct potential cross-panel correlations, we apply alternative and complementary approaches, including the combined Balestra-Nerlove (BN) and Hausman-Taylor models, as well as the Feasible Generalized Least Squares (FGLS) estimator. Our findings underscore the lasting influence of past policy decisions on current climate policy trajectories. Specifically, while carbon taxes can sometimes undermine regulatory efforts to reduce emissions, the adoption of circular economy practices significantly enhances the overall effectiveness of climate policies. Furthermore, our analysis highlights the complex relationship between climate uncertainty and carbon tax implementation, suggesting that policy stability is crucial for facilitating a successful transition to renewable energy sources.