Citation

Tucker, Jeneba Joy and Bein, Murad Abdurahman and Yeboah, Samuel Duku and Gyamfi, Bright Akwasi (2026) The impact of climate risk and sustainability uncertainty on crude oil prices: a quantile-on-quantile analysis of major oil-producing economies. Environmental Sciences Europe, 38 (1). ISSN 2190-4715

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Abstract

The accelerating global transition toward low-carbon development has introduced new layers of environmental and sustainability-related uncertainty into fossil fuel markets. This study investigates the nonlinear and state-dependent effects of climate risk and sustainability uncertainty on crude oil prices across major oil-producing economies over the period January 2010 to December 2023. Employing the Quantile-on-Quantile Regression framework, the analysis models the interaction between the distribution of uncertainty measures and the distribution of crude oil prices, thereby capturing asymmetric and regime-specific transmission mechanisms that conventional mean-based approaches fail to detect. The empirical findings reveal pronounced distributional heterogeneity. Climate risk exerts a positive influence on oil prices under low-risk conditions but generates strong negative effects when uncertainty intensifies, indicating forward-looking repricing of carbon-intensive assets. Sustainability uncertainty displays predominantly negative yet country-specific effects, with notable regime reversals in certain economies during extreme market states. The results further demonstrate substantial cross-country variation, reflecting structural differences in transition vulnerability, institutional frameworks, and oil revenue dependence. The study establishes climate risk and sustainability uncertainty as structural determinants of crude oil price dynamics. By uncovering nonlinear, statecontingent, and country-specific transmission channels, the findings contribute to the evolving literature on environmental risk pricing and energy market behaviour, offering important implications for policymakers, investors, and energy-exporting economies navigating the global transition process.

Item Type:	Article
Uncontrolled Keywords:	Energy transition
Subjects:	H Social Sciences > HB Economic theory. Demography > HB221-236 Price
Divisions:	Faculty of Management (FOM)
Depositing User:	Ms Rosnani Abd Wahab
Date Deposited:	31 Jul 2026 05:43
Last Modified:	31 Jul 2026 05:43
URII:	http://shdl.mmu.edu.my/id/eprint/16403

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