Climate Transition Beliefs
Type
working paper
Date Issued
2024
Author(s)
Abstract
We study expectations about the trajectory of the energy transition (climate transition beliefs) as drivers of "green'' investment decisions and return expectations. In a survey of U.S. retail investors (N=1,007), we document considerable heterogeneity in climate transition beliefs at different horizons. Climate transition optimism positively correlates with expected green financial performance and preferences for green investments, especially for investors without strong pro-environmental preferences. A pre-registered information provision experiment (N=3,003) provides causal evidence on the link between climate transition beliefs and investment behavior. By influencing investments in green projects, the prevailing beliefs around the energy transition can have important self-fulfilling tendencies.
Language
English (United States)
Keywords
D14
H42
G18
P16 Behavioral Finance
Climate Change
ESG
Expected returns
Heterogeneous beliefs
Investments
Information provision experiment
Survey
Sustainable finance
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Name
CeccarelliRamelli2024_ClimateTransitionBeliefs_April25.pdf
Size
7.35 MB
Format
Adobe PDF
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