Populism, Polarization and Green Investment

Abstract

A massive heat wave set off forest fires throughout Sweden in the summer of 2018.  While the forest fires increased the salience of climate change on average for those who were affected by them, they generated significant heterogeneity in attitudes which are explained by rising populism and political polarization. Increases in salience occur only in areas with lower levels of social division, and is mediated by local environmental media coverage and increased voter turnout for left- and right-wing populist parties. Increased climate salience also predicts greater investment in fossil fuel exclusion funds, but this is also strongly mediated by local political dynamics. 

Keywords: Household Finance, Carbon Emissions, Exclusion Funds, Retirement Savings

JEL Classification: G11, G39