BUSINESS CYCLE EFFECTS ON CONCERN ABOUT CLIMATE CHANGE: THE CHILLING EFFECT OF RECESSION

Abstract

This paper uses two different sources of data to investigate the association between the business cycle — measured with unemployment rates — and public concern about climate change. Building on recent research that finds internet search terms to be useful predictors of health epidemics and economic activity, we find that an increase in a state's unemployment rate decreases Google searches for "global warming" and increases searches for "unemployment," and that the effect differs according to a state's political ideology. From national surveys, we find that an increase in a state's unemployment rate is associated with a decrease in the probability that residents think global warming is happening and reduced support for the U.S. to target policies intended to mitigate climate change. We also examine how socio-demographic characteristics affect opinions about whether climate change is happening and whether government should take action. Beyond providing the first empirical estimates of macroeconomic effects on concern about climate change, we discuss the results in terms of the potential impact on environmental policy and understanding the full cost of recessions.