Seeing Green: The Effects of Financial Exposures on Support for Climate Action

Despite the large common net benefits of climate mitigation, broad-based political consensus for large-scale policy action remains elusive. We hypothesize that financial exposure to energy stocks central to the green transition can induce learning and greater support for climate mitigation policies. We conduct a RCT which randomizes both the presence of financial market exposure to the energy sector, as well as which type of portfolio — fossil-fuel (brown) or renewable energy (green) — is given to an individual. Treatment increases support for mitigation action and intent to undertake adaptation, with positive support caused by ownership of both green and brown assets. The effects are particularly pronounced among individuals who are initially more climate-skeptic, and persist eight months after treatment. We present evidence consistent with learning as the primary mechanism: treated respondents are more likely to consume financial news and become more financially knowledgeable, less likely to obtain news from polarized sources, and better able to accurately predict the environmental impacts of green and brown firms.