How Climate Policy Shapes Global Utility Markets: Dynamic Evidence From the EU Carbon Market

ABSTRACT This paper employs a quantile‐based approach to examine how climate policy shocks—proxied by EU carbon allowance (EUA) prices—affect global utility stock markets from 2013 to 2024. Results show that spillover effects are strongest during normal market conditions, rather than at extremes. Utilities in the EU demonstrate greater resilience, while those in China and Brazil are more vulnerable to policy‐driven shocks. The analysis also reveals that the impact of climate policies depends on market context, institutional capacity, and regional characteristics. These findings underscore the need for adaptive, region‐specific strategies to manage financial risks, guide investment, and support a fair and stable energy transition.