Abstract
This study identifies the relations between fossil fuel (FF) prices and climate change (CC) by canonical correlation (C
j
) analysis of the layer data. The variable set Y includes the oil, natural gas, and coal price returns, whereas variable set (X) comprises green energy index, carbon dioxide (CO
2
), temperature, and precipitation. This article discusses the application and principle of C
j
analysis in the context of the study variables. In particular, the paper examines the relationship between the CC-related variables, or the "greening of the world" and their influence on the pricings of oil, gas, and coal during the same periods. The significant relations (p < 0.01) were the C
j
between variable sets X and Y and one set of canonical variates. FFs return contributed most heavily to the relationship, whereas the CC variables played a lesser role.