Abstract: Against the backdrop of an escalating climate crisis and mounting global ecological pressures, studying the impact of climate policy uncertainty on risk contagion within the downstream segment of the smart grid industry chain is of great significance for preventing and mitigating potential risks and enhancing the resilience of the industry chain. This paper first uses the TENET model to measure the risk spillover effects at the tail end of China’s smart grid industry chain. Building on this, it employs the TVP-FAVAR model to investigate the time-varying impact of climate policy uncertainty on risk spillover at the tail end of the smart grid industry chain, as well as its dynamic characteristics. Research has found that the overall interconnections within the smart grid industry chain exhibit cyclical characteristics, and extreme events can cause significant fluctuations in risk spillover; During the sample period, risks at the lower end of the industrial chain were transmitted from the mid- and upstream sectors to the downstream sectors; Risk response mechanisms within industrial chains exhibit a dependency on the type of shock: during demand-side shocks, risks at the tail end of the industrial chain tend to concentrate in downstream sectors, whereas under exogenous supply-side shocks, they tend to concentrate in upstream sectors; Uncertainty in climate policy can exacerbate risk spillovers at the lower end of the smart grid industry chain and exhibits dynamic characteristics that evolve over time.