Explosive price dynamics consistent with bubble-like behavior in clean and traditional energy investments: A GSADF approach amidst global events

This study examines explosive price dynamics consistent with bubble-like behavior in clean and renewable energy ETFs, index, and equities compared to traditional energy counterparts, using the Generalized Supremum Augmented Dickey-Fuller (GSADF) test across four subperiods: Pre-Paris Agreement, Paris Agreement, COVID-19, and Russia-Ukraine War. Using daily price data for clean energy assets (ICLN, QCLN, CELS, ENPH, AEIS) and traditional energy assets (VDE, IXC, XLE, USEG), the analysis reveals pronounced prevalence of explosive price episodes in clean energy markets, with 76.55% of explosive price episodes in the Pre-agreement period and 72.66% during COVID-19, consistent with speculative dynamics. Traditional energy assets exhibit greater resilience, with limited explosive episodes, notably only USEG during the Russia-Ukraine War. The novel segmented subperiod approach, combined with GSADF’s precise bubble date-stamping of explosive episodes, distinguishes this study by offering granular insights into sector-specific vulnerabilities, unlike prior broader analyses. The findings indicate that selected clean energy instruments exhibited more frequent explosive price episodes during crisis periods than their traditional energy counterparts, a pattern that may inform risk assessment and further research relevant to SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action) but does not by itself warrant specific investment or policy recommendations.