Attention to Global Warming

TLDR

The study investigates how local temperature anomalies influence people’s collective beliefs and actions about global warming. Using international data, the authors show that Google search volume for climate change rises when local temperatures are abnormally high. The study finds that warmer temperatures lead people to revise their climate‑change beliefs upward, and that in such weather carbon‑intensive firms underperform and are sold by retail investors, with returns not driven by fundamentals.

Abstract

Abstract We find that people revise their beliefs about climate change upward when experiencing warmer than usual temperatures in their area. Using international data, we show that attention to climate change, as proxied by Google search volume, increases when the local temperature is abnormally high. In financial markets, stocks of carbon-intensive firms underperform firms with low carbon emissions in abnormally warm weather. Retail investors (not institutional investors) sell carbon-intensive firms in such weather, and return patterns are unlikely to be driven by changes in fundamentals. Our study sheds light on peoples’ collective beliefs and actions about global warming.