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Climate Transition Beliefs

Author

Listed:
  • Marco Ceccarelli

    (VU University Amsterdam)

  • Stefano Ramelli

    (University of St. Gallen - School of Finance; Swiss Finance Institute)

Abstract

We study expectations about the energy transition (climate transition beliefs) as drivers of “green” investment decisions and financial performance expectations. In a preregistered survey of U.S. retail investors (N=1,007), we document considerable heterogeneity in climate transition beliefs at different horizons. More optimistic climate transition beliefs are associated with higher green expected financial performance and investments, especially for investors without strong pro-environmental preferences. A pre-registered information provision experiment (N=3,003) provides causal evidence of the role of climate transition optimism in investment behavior. By influencing the availability of capital for green projects, the prevailing narratives and beliefs around the energy transition can have important self fulfilling properties.

Suggested Citation

  • Marco Ceccarelli & Stefano Ramelli, 2024. "Climate Transition Beliefs," Swiss Finance Institute Research Paper Series 24-22, Swiss Finance Institute.
    • Handle: RePEc:chf:rpseri:rp2422
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    More about this item

    Keywords

    Behavioral Finance; Climate Change; ESG; Expected returns; Heterogeneous beliefs; Information provision experiment; Survey; Sustainable finance.;
    All these keywords.

    JEL classification:

    • D14 - Microeconomics - - Household Behavior - - - Household Saving; Personal Finance
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • P16 - Political Economy and Comparative Economic Systems - - Capitalist Economies - - - Capitalist Institutions; Welfare State

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