Abstract
ABSTRACT Concerns for fossil fuel price volatility, environmental pollution and energy inefficiency drive the formulation of energy policies aimed at attaining energy security. We use a theoretical framework which integrates key elements of energy security into the context of natural capital theory to investigate the causal relationship between Nasdaq clean energy stock price and a range of variables including oil price, natural gas prices, carbon price and energy efficiency. Our autoregressive distributed lag (ARDL) results reveal that clean energy stock price is jointly and individually explained by the variables representing some elements of energy security. Carbon price and energy efficiency emerged as the most important elements of energy security driving the on-going transition from conventional to clean energy sources. Consequently, governments should take environmental sustainability and energy efficiency very seriously when formulating energy policies in the pursuit of energy security and the way they stimulate substitutions between clean energy sources and hydrocarbons.
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