This paper explores the connectedness between the cryptocurrency environmental attention index and four major green financial assets using time-varying parameter vector autoregression model from January 2014 to December 2021. Findings reveal that connectedness follows a heterogeneous trajectory over time. Results show evidence of higher volatility transmission during the COVID-19 period relative to the entire sample period. The high volatility transmission is a source of concern to policymakers, green stakeholders, and investors, due to limited diversification options.
Abstract In February 2022, the Finance Minister of India in the Union Budget 2022 announced that the government proposed to issue sovereign green bonds to mobilize assets for green infrastructure. These bonds are a sort of fixed-income instrument where the money raised from investors is used exclusively to finance projects having a positive environmental impact. The announcement was in sync with India's commitment to achieving net-zero carbon emissions by 2070. However, many issues come with it such as the complexity of green data, and the lack of uniform standards to measure the impact of green investments leading to allegations of âgreenwashing,â among others. Its solution lies in the digital tokenization of green bonds using blockchain technology. Foreign investors scout for green bonds issued by growing markets like India, which have attractive valuations and good growth prospects. Marketing and issuing green bonds properly would have a far greater potential to bring investment to the security markets and the much-needed advancement in the sustainable sector. It is much more likely that green bonds will bring investment to the security markets and much-needed advancement to the sustainable sector if they are marketed and issued through digital tokenization. Financial regulators and policymakers can create a global framework for the application of blockchain technology in sustainable finance. This might entail tokenizing eco-friendly assets, issuing eco-friendly bonds, trading renewable energy and 2-2 carbon credits in a decentralized ecosystem, and decentralizing crowdfunding for eco-friendly enterprises. This chapter seeks to demonstrate how blockchain technology can help issue green bonds and increase the overall efficiency of green finance in the economy. It also aims to scrutinize how such digital tokenization of green bonds would affect the security market and increase the standards of environmental, social, and governance (ESG) worldwide. While discussing how this process is shaping up and impacting the economies of various countries, it also seeks to provide suggestions to be taken into consideration while adopting the digital tokenization of green bonds.
Bikramaditya Ghosh, Mariya Gubareva, Noshaba Zulfiqar, Ahmed Bossman
Purpose The authors target the interrelationships between non-fungible tokens (NFTs), decentralized finance (DeFi) and carbon allowances (CA) markets during 2021â2023. The recent shift of crypto and DeFi miners from China (the People's Republic of China, PRC) green hydro energy to dirty fuel energies elsewhere induces investments in carbon offsetting instruments; this is a backdrop to the authorsâ investigation. Design/methodology/approach The quantile vector autoregression (VAR) approach is employed to examine extreme-quantile-connectedness and spillovers among the NFT Index (NFTI), DeFi Pulse Index (DPI), KraneShares Global Carbon Strategy ETF price (KRBN) and the Solactive Carbon Emission Allowances Rolling Futures Total Return Index (SOLCARBT). Findings At bull markets, DPI is the only consistent net shock transmitter as NFTI transmits innovations only at the most extreme quantile. At bear markets, KRBN and SOLCARBT are net shock transmitters, while NFTI is the only consistent net shock receiver. The receiver-transmitter roles change as a function of the market conditions. The increases in the relative tail dependence correspond to the stress events, which make systemic connectedness augment, turning market-specific idiosyncratic considerations less relevant. Originality/value The shift of digital asset miners from the PRC has resulted in excessive fuel energy consumption and aggravated environmental consequences regarding NFTs and DeFi mining. Although there exist numerous studies dedicated to CA trading and its role in carbon print reduction, the direct nexus between NFT, DeFi and CA has never been addressed in the literature. The originality of the authorsâ research consists in bridging this void. Results are valuable for portfolio managers in bull and bear markets, as the authors show that connectedness is more intense under such conditions.
What do we know about the interrelations between economic inequality, ecology and the increased use of Bitcoin? The aim of the paper was to empirically test the relationship between economic and ecological effects related to the increase in Bitcoinâs network hashrate in a selection of countries that have the highest influx of crypto-mining. To test these three types of relationships, I collected a dataset concerning Bitcoin indicators, economic indicators and ecological indicators that were obtained from multiple trustworthy sources: OECD, World Bank, Fred Data, World Inequality Database (WID). Handling the data challenges, I used this unique panel dataset to explore the relationship between Bitcoinâs hashrate and two types of outcomes: (i) economic outcomes (such as the GDP which as we know relates to inequalities through the Kuznets curve) or direct measures of inequality (such as, income inequality (GINI) and the share of people with top 1% of income and 1% of wealth), and (ii) ecological outcomes (such as carbon emissions, carbon footprint and electronic waste). I found that the Bitcoin currency associates with certain redistribution of wealth, but the accumulation of crypto-currency-related wealth itself remains still concentrated in the wealth of the top 1%. Also, there is evidence for certain nonlinearities in the relationships with the ecological degradation, echoing the concept of the Kuznets curve.
There is a growing interest in understanding the energy and environmental footprint of digital currencies, specifically in cryptocurrencies such as Bitcoin and Ethereum. These cryptocurrencies are operated by a geographically distributed network of computing nodes, making it hard to estimate their energy consumption accurately. Existing studies, both in academia and industry, attempt to model cryptocurrency energy consumption often based on a number of assumptions, for instance, about the hardware in use or the geographic distribution of the computing nodes. A number of these studies have already been widely criticized for their design choices and subsequent over- or under-estimation of energy use. In this study, we evaluate the reliability of prior models and estimates by leveraging existing scientific literature from fields cognizant of blockchain, such as social energy sciences and information systems. We first design a quality assessment framework based on existing research, and we then conduct a systematic literature review examining scientific and non-academic literature demonstrating common issues and potential avenues of addressing these issues. Our goal with this article is to to advance the field by promoting scientific rigor in studies focusing on blockchain energy footprint. To that end, we provide a novel set of codes of conduct for the five most widely used research methodologies: quantitative energy modeling, literature reviews, data analysis and statistics, case studies, and experiments. We envision that this code of conduct would assist in standardizing the design and assessment of studies focusing on blockchain-based systems' energy and environmental footprint.
In recent years, blockchain technology has seen significant growth and widespread adoption in various industries. However, one major drawback of blockchain investments is their substantial energy consumption, which has negative impacts on both the economy and the environment. The main cause of concern is the generation of atmospheric carbon emissions resulting from excessive energy usage. This research study aims to identify blockchain networks and systems that assert themselves as environmentally friendly and determine which of them produces the least amount of carbon emissions, such as Cardano, Tezos, and Bitgreen. This has been accomplished by following a comprehensive hybrid literature review. Our study has identified 23 blockchain networks that consume significantly less power and release fewer carbon dioxide emissions compared to the Bitcoin network. Some of these environmentally friendly networks include Algorand, Fantom, MobileCoin, and Electroneum. Additionally, we have found various projects and organizations that support greener blockchain initiatives, such as the Renewable Energy Certificate Mechanism, Green Digital Finance Alliance, GreenTrust, and the Energy Web Foundation. While several projects in this area have been recognized and examined, comprehensive research and analysis are still needed to provide empirical evidence regarding the power consumption and carbon dioxide emissions of these claimed environmentally friendly blockchains. This is due to the relatively early stage of development in this field.
The effect of the RussiaâUkraine war has fluctuated in Europe and Asia's economic conjuncture by virtue of constant shifting balances. The portfolios of investors who made decisions in uncertain conditions have been affected by these fluctuations that have caused volatility in the stock market's indexes. The aim of this study is to examine the impact of the Fear Index (FI), the Dollar Index, and Bitcoin on the volatility of the Borsa Istanbul 100 Index (BIST). Autoregressive distributed lag (ARDL) time series analysis was used for the study, which revealed that the Dollar Index has no effect on volatility, while the FI was found to have an effect on volatility both in the short and long runs. In addition, Bitcoin was determined to have an effect on volatility only in the long run. When the period of the data used is examined, the outbreak of the RussiaâUkraine war in February 2022 is thought to be the reason for the increase in the FI. It can be assumed that the decisions of investors to invest in the BIST were adversely affected by the war as a natural consequence of this, and investors who ceased investing in the BIST index opted to invest elsewhere.
Purpose The aim of this article states that in each stage of the industrial revolution, only a few initiatives have been real game changers. In Industry 3.0, â Internet of Information â has transformed the business landscape via connectivity and communications. Enterprises could come together to spur innovation in a cooperative or competitive manner. In Industry 4.0, the â Internet of Value â has shown considerable benefits; and, blockchain technology is expected to touch all layers of a business ecosystem, and the construction industry is not an exception. Design/methodology/approach This study aims to answer the â How do enterprise blockchain solutions contribute to the vibrancy of the construction ecosystem from social, economic, and environmental aspects? â Following a comprehensive literature review, the Grey Ordinal Priority Approach (OPA-G) is employed in multiple criteria decision analysis (MCDA). OPA-G can select functionally rich enterprise blockchain solutions that meet the needs of the future construction industry, while there is uncertainty in the input data. Findings The results from the case study show that organization under observation welcomes an enterprise blockchain solution that delivers services related to ârenewable energy certificatesâ in the context of âsmart cities and built environmentâ. Employing high-ranked blockchain solutions brings vibracy and sustainability to construction ecosystem in terms of âC 6 . decentralized finance and investment,â âC 3 . multi-party and cross-industry collaboration,â and âC 8 . data-driven value creationâ. Originality/value At the micro level, blockchain solutions automate processes, streamline operations, and build new capacities on a new business model. At the macro level, blockchain creates a vibrant ecosystem based on transparency, decentralization, consensus-based democracy, interoperability, etc. Indeed, the capability of blockchain solutions at an enterprise scale (enterprise blockchain solutions) can shape a new construction ecosystem. The practical implications of current research are preparing executives for a fundamentally different next normal in construction.
Yang Junhua, Samuel Kwaku Agyei, Ahmed Bossman, Mariya Gubareva ¡ 5 authors
To address ESG stock susceptibility to episodic shocks in financial markets, we use nonparametric quantile-based techniques applied to the 2014-2022 period. We (i) analyse the ability of traditional assets to predict ESG stocks returns, (ii) explore whether oil or gold serves as a safe haven for ESG stocks, and (iii) ascertain how ESG stocks respond to market sentiment, crypto-based uncertainty, and geopolitical risk (GPR). We find that gold, oil, market sentiment (tracked by the VIX), the implied volatility of crude oil (OVX) and GPR are significant predictors of ESG returns. None of gold or oil serves as a safe haven for ESG stocks, both acting just as diversifiers. In their turn, ESG could stocks hedge against the shocks from GPR and cryptocurrency-triggered market uncertainties in bearish states of the market. These findings are important for asset allocation and risk management, assisting investors in the already ongoing switch from ordinary to sustainable investments.
Abstract Since the onset of the COVID-19 pandemic, financial and commodity markets have exhibited significant volatility and displayed fat tail properties, deviating from the normal probability curve. The recent Russia-Ukraine war has further disrupted these markets, attracting considerable attention from both researchers and practitioners due to the occurrence of consecutive black swan events within a short timeframe. In this study, we utilized the Quantile-VAR technique to examine the interconnectedness and spillover effects between African equity markets and international financial/commodity assets. Daily data spanning from January 3, 2020, to September 6, 2022, was analyzed to capture tail risks. Our main findings can be summarized as follows. Firstly, the level of connectedness in returns is more pronounced in the lower and upper tails compared to the median. Secondly, during times of crisis, African equity markets primarily serve as recipients of systemic shocks. Lastly, assets such as Silver, Gold, and Natural Gas exhibit greater resilience to systemic shocks, validating their suitability as hedging instruments for African equities, in contrast to cryptocurrencies and international exchange rates. These findings carry significant implications for policymakers and investors in Africa equities.
This article explores the relationship between green energy and cryptocurrencies in the sustainable energy finance sector. The research findings contribute to our understanding of the application of green economy practice, enabling investors in financial markets, policymakers, and stakeholders to make informed decisions and develop specific strategies. Adopting the green economy paradigm makes it possible to promote collaboration and innovation by integrating ethical and responsible principles that can improve the overall quality of processes and boost sustainable growth. Cryptocurrencies have been widely used as financial instruments over the last decade. Given the development of the cryptocurrency market and the growing awareness of greener and more energy-efficient tokens, the green economy has become a popular topic for understanding economic and political issues. However, the literature still lacks clear evidence on how cryptocurrencies interact with green energies. Therefore, this study examines the long- and short-term relationships between dirty cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), clean cryptocurrencies such as Cardano (ADA), Ripple (XRP), Stellar (XLM), and green energies such as ISE Clean Edge Global Wind Energy, S&P Global Clean Energy, S&P TSX Renewable Energy and Clean Technology, Solactive China Clean Energy, in the period from January 2020 to September 2023. The results show that diversification is key, with clean cryptocurrencies such as ADA, XLM and XRP offering diversification opportunities alongside "dirty" cryptocurrencies such as BTC and ETH. Although sustainable energy indices show mixed evidence in the long and short term, they remain relevant for those who focus on clean energy investments. It is also becoming increasingly relevant for investors in sustainable portfolios to assess their environmental impact, especially for energy-intensive cryptocurrencies, and it is advisable to explore sustainable blockchain technologies.
Jinghua Wang, Geoffrey Ngene, Yan Shi, Ann Nduati Mungai
Policymakers and portfolio managers pay keen attention to sources of uncertainties that drive asset returns and volatility. The influence of uncertainty on Bitcoin has the potential to drive fluctuations in the entire cryptocurrency market. We investigate the predictability of thirteen economic policy uncertainty indices on Bitcoin returns. Using the Random Forest machine learning algorithm, we find that Singaporeâs economic policy uncertainty (EPU) has the strongest predictive power on Bitcoin returns, followed by financial crisis (FC) uncertainty and world trade uncertainty (WTU). We further categorize these uncertainties into different groups. Interestingly, the predictability of uncertainty indices on Bitcoin returns within the international trade group is stronger compared to other uncertainty categories. Additionally, we observed that internet-based uncertainty measures have more predictive power of Bitcoin returns than newspaper- and report-based measures. These results are robust using various additional machine learning methods. We believe that these findings could be valuable for policymakers and portfolio managers when making decisions related to uncertainty drivers of cryptocurrency prices and returns.
This paper aims to reveal the asymmetric co-integration relationship and asymmetric causality between Bitcoin and global financial assets, namely gold, crude oil and the US dollar, and make a comparison for their asymmetric relationship before and after the COVID-19 outbreak. Empirical results show that there is no linear co-integration relationship between Bitcoin and global financial assets, but there are nonlinear co-integration relationships. There is an asymmetric co-integration relationship between the rise in Bitcoin prices and the decline in the US Dollar Index (USDX), and there is a nonlinear co-integration relationship between the decline of Bitcoin and the rise and decline in the prices of the three financial assets. To be specific, there is a Granger causality between Bitcoin and crude oil, but not between Bitcoin and gold/US dollar. Before the outbreak of the COVID-19 pandemic, there was an Asymmetric Granger causality between the decline in gold prices and the rise in Bitcoin prices. After the outbreak of the pandemic, there is an asymmetric Granger causality between the decline in crude oil prices and the decline in Bitcoin prices. The COVID-19 epidemic has led to changes in the causality between Bitcoin and global financial assets. However, there is not a linear Granger causality between the US dollar and Bitcoin. Last, the practical implications of the findings are discussed here.
Purpose This paper aims to investigate the determinants of global interest in central bank digital currency (CBDC). It assessed whether global interest in sustainable development and cryptocurrency are determinants of global interest in CBDC. Design/methodology/approach Google Trends data were analyzed using two-stage least square regression estimation. Findings There is a significant positive relationship between global interest in sustainable development and global interest in CBDC. There is a significant positive relationship between global interest in cryptocurrency and global interest in the Nigeria eNaira CBDC. There is a significant negative relationship between global interest in CBDC and global interest in the eNaira CBDC. There is a significant positive relationship between global interest in CBDC and global interest in the China eCNY. There is a significant negative relationship between global interest in cryptocurrency and global interest in the Sand Dollar and DCash. Originality/value The literature has not empirically examined whether global interest in sustainable development and cryptocurrency are factors motivating global interest in CBDC. This study fills a gap in the literature by investigating whether global interest in sustainable development and cryptocurrency are factors motivating global interest in CBDC.
Catherine Mulligan, Suzanne G. Morsfield, EvĂŽn Cheikosman
Blockchain technology has been proposed to achieve sustainable development through various solutions, such as carbon credit trading, energy systems and supply chain management. While existing literature has not covered this topic in a structured fashion, this paper provides insights to policymakers on how blockchain can deliver sustainable development. This study conducted a systematic literature review on the role of blockchain technologies in assisting policymakers in achieving ESG and environmental sustainability goals. The paper performs a detailed PRISMA SLR analysis of 10,188 technical and policy papers sourced from Scopus and IEEE databases to ensure high-quality inputs and breadth of coverage across relevant sources. In addition, the study reviews the relevant regulatory environment related to ESG, including SDGs, IPCC, COP 27, ESMA, ISSB, SEC, GRI, TCFD, ESRS, IFRS S1 and S2 and CRSD. Most papers do not outline a structured approach to applying blockchain in the emerging regulatory environment. Our paper outlines recommendations to policymakers wishing to ensure that the blockchain research community and solutions proposed are usefully directed to enable the world to achieve its net zero goals.
Matteo Vaccargiu, Andrea Pinna, Roberto Tonelli, Luisanna Cocco
Blockchain technology finds application in multiple sectors, including renewable energy. Numerous blockchain-based applications aim to provide support in the production, management, distribution, and consumption of green energy. The benefits offered are not only technological but also social, environmental, and economic. The purpose of this study is to examine how the application of blockchain in the energy industry may affect the achievement of the Sustainable Development Goals (SDGs). This study is composed of two parts. The first part concerns the identification and analysis of the most relevant categories of blockchain applications in the energy sector and their ability to contribute to the achievement of the SDGs. A knowledge base, comprising scientific articles, gray literature, and real-world applications, has been created and analyzed. With a keyword-based approach, each application was associated with one or more SDGs. In the second part, the Sustainability Awareness Framework (SuSAF) was used to examine the findings of the first part of the study and discuss them in terms of five dimensions of sustainability. Finally, potential risks associated with the use of blockchain in the energy sector are also covered. Results reveal that tracking energy production and consumption and renewable energy communities are the applications that have the most beneficial effects, and that the benefits linked to blockchain adoption go beyond the energy sector to include the environment, the economy, industry, infrastructure, smart cities, and society.