HONG KONG CLIMATE POLICY UNCERTAINTY INDEX (HKCPU INDEX)
ABOUT HKCPU
INDEX
The project aims to develop a novel news-based Hong Kong Climate Policy Uncertainty (HKCPU) Index, designed to quantitatively gauge the evolution of domestic climate policy uncertainty over time. It provides a standardized tool for researchers, policymakers, and financial institutions to assess climate-related policy signals as captured in Hong Kong’s major media.
The HKCPU is comprised of two complementary indices:
- HKCPU-total measures how frequently the terms “climate,” “policy,” and “uncertainty” co-occur in news coverage, capturing the overall visibility of climate policy risk in the media.
- HKCPU-CP (Climate-Policy-focused) refines this measure by calculating the proportion of climate-policy-related articles that are explicitly framed around uncertainty.
This index can serve multiple stakeholders, facilitating empirical analyses, tracking climate transition risks, and enhancing the understanding of climate-related decision-making in Hong Kong. It can be used to proxy for the public's perception and exposure of climate policy-related risks.
The significance of the HKCPU Index is highlighted by the Hong Kong government’s Climate Action Plan 2050, which commits to achieving carbon neutrality by 2050. Currently, there is a lack of publicly available data detailing expenditure breakdowns and progress reports related to this plan, contributing to growing uncertainty surrounding climate policy. Moreover, the HKSAR Government's issuance of retail green bonds allows the general public to directly contribute to greening Hong Kong; however, the effectiveness and transparency of these investments can be undermined by policy uncertainty. Therefore, understanding the domestic impacts of climate policy uncertainty on emissions, green finance, and innovation remains unexplored, especially when compared to regions like the US and Mainland China that have established CPU indices. Thus, an observable measure of climate policy uncertainty in Hong Kong is essential.
WHO IS THE HKCPU INDEX FOR?
Government
Governments can leverage the index to enhance their assessment of climate policy uncertainty, thereby improving macroeconomic forecasts and policy planning.
Financial Institutions
Financial institutions can utilize the HKCPU Index to identify and quantify climate policy risks, aiding in better forecasting and investment decisions.
Academics
Academics can use the index to empirically analyze the effects of climate policy uncertainty on pressing global issues such as carbon emissions and renewable energy.
HKCPU INDEX FRAMEWORK
We follow the methodology in "Measuring Climate Policy Uncertainty" by Konstantinos Gavriilidis that adopts the methods in "Measuring Economic Policy Uncertainty" by Scott R. Baker, Nicholas Bloom, and Steven J. Davis. We also refer to the "Hong Kong Economic Policy Uncertainty" index by Paul Luk, Michael Cheng, Philip Ng, and Ken Wong.
Our indices start in January 1998 and run through the present.
We construct our indices using ten Hong Kong newspapers: South China Morning Post, Wen Wei Po, Sing Pao, Ming Pao, Oriental Daily, Hong Kong Economic Journal, Sing Tao Daily, Hong Kong Economic Times, Hong Kong Commercial Daily, and Ta Kung Pao.
The South China Morning Post articles are available in the Factiva database. The rest of the newspaper articles are available in the Wisers Information Portal.
For each newspaper and month, we count articles that contain the English language or traditional Chinese language equivalent of one or more terms in each of the following term sets:
As in the "Hong Kong Economic Policy Uncertainty" index by Paul Luk, Michael Cheng, Philip Ng, and Ken Wong, criterion (1) serves to remove uncertainty not directly related to Hong Kong.
To construct HKCPU-total, we calculate the number of articles that contain all three term sets — {climate}, {policy}, and {uncertainty} — and normalize this by the total number of articles published in that newspaper and month.
To construct HKCPU-CP, we first identify all articles that reference both “climate” and “policy” (CP articles), and then calculate the share of these that also include terms related to uncertainty (CPU articles). This index is thus normalized as the ratio of CPU articles to CP articles, allowing for clearer separation between increased media attention and actual perceived policy risk.
Next, these series are standardized to have a unit standard deviation and then averaged across newspapers by month. Finally, the averaged series are normalized to have a mean value of 100 for the period January 1998 to April 2024.
You can download the data on the "Resources" page or by clicking below.
SUPPORTING ORGANIZATION
With data support from Wisers Information Limited, a trusted leader in big data and business intelligence solutions.
RESEARCH SCHEME
Research supported by the theme-based research scheme (TRS) 2021/22 by the Research Grants Council (RGC) of the Hong Kong Government, entitled "Developing Hong Kong as a Global Green Finance Centre” (project no. T31-603/21-N).
