Connectedness between climate variables and maritime markets: Time-varying dynamics and sustainability perspective

Abstract

This study examines the impact of sea surface temperatures and global temperature anomalies on maritime markets using the TVP-VAR based Connectedness Decomposition Approach. The results indicate that tanker markets (BDTI and BCTI) are more sensitive to climate variables, while dry bulk markets demonstrate greater resilience. The Total Connectedness Index (TCI) reveals that market integration intensifies during global economic crises and pandemic periods. Findings support a pairwise relationship between freight markets, carbon emissions, and climate variability. In line with the IMO 2023 GHG Strategy, this study proposes short-, medium-, and long-term sustainability strategies to enhance the maritime sector's adaptation to climate policies. The results highlight the crucial role of maritime markets in environmental sustainability efforts.