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Climate Polarization and Green Investment

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  • Anders Anderson
  • David T. Robinson

Abstract

We build a nationally representative sample of retirement savers in Sweden to study how asymmetric updating of beliefs about climate change affects investment decisions. After the intense heat wave of 2018, respondents in regions dominated by a right-wing, anti-climate party grow less concerned about climate change, while respondents outside these regions grow more concerned. Those growing more concerned rebalance their retirement portfolios toward climate-friendly mutual funds; those growing less concerned rebalance out of these funds, but to a smaller degree. Financial sophistication and inertia interacts with political polarization in driving these effects.

Suggested Citation

  • Anders Anderson & David T. Robinson, 2024. "Climate Polarization and Green Investment," NBER Working Papers 32131, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32131
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    More about this item

    JEL classification:

    • G40 - Financial Economics - - Behavioral Finance - - - General
    • G51 - Financial Economics - - Household Finance - - - Household Savings, Borrowing, Debt, and Wealth
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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