Monday, 27 February, 2023 | 14:00 | Applied Micro Research Seminar

Pamela Campa (Stockholm Institute of Transition Economics) "Facing the Hard Truth: Evidence from Climate-Change Ignorance"

Prof. Pamela Campa

Stockholm Institute of Transition Economics 

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Authors: Pamela Campa, Ferenc Szucs

Abstract: Public scepticism around climate changeremains high in many countries, including the United States, where in 2020 only 72% of adults reported to believe that global warming is happening, and even fewer (57%) reported to be certain about its anthropogenic nature. The widespread scepticism about climate change, especially in a country, like the US, that is the second largest CO2 emitter worldwide, underscores the challenges of developing a popular consensus around climate issues. Building such consensus, in turn, is crucial for the deeper and swifter policy action needed at global level to fight climate change, and requires understanding the roots of climate change scepticism. 

In this paper, we show that information avoidance aimed at protecting identity contributes at explaining climate change scepticism. We combine data on mining employment from the US Mine Safety and Health Administration (MSHA) and surveys of climate beliefs from the Yale Program of Climate Change Communication, and study labor-market shocks and climate change beliefs in US counties with a relatively high share of employment in the coal mining sector. Exploiting mass-layoffs of coal miners in a subset of these counties over the years 2014-2018, and a difference-in-differences design, we document that climate change scepticism shrinks less in layoff counties compared to other coal-mining counties. Interestingly, we find no evidence of significant differences in levels of climate scepticism between layoff counties and other coal-mining counties before the layoffs occur. However, concerns about the endogeneity of layoffs to climate beliefs remain. In order to address these concerns, we develop an instrumental variable strategy that uses geographic variation in gas prices to predict mine closures. Counties that predominantly shipped their coal to regions of the US where gas prices declined more after the 2008 fracking shock were more likely to experience mass layoffs of coal miners. We leverage this arguably exogenous source of variation in occurrence of layoffs and show that they causally impact beliefs about climate change.

We also employ a triple difference-in-differences strategy that compares layoffs from coal and metal mines to understand the underlying causes of persistent climate change scepticism in communities experiencing layoffs. Our triple difference results confirm that information avoidance is specific to coal-mining communities. In similar spirit, we show that changes in overall unemployment are not associated with beliefs about climate change. Taken together, these findings suggest that information avoidance aimed at protecting identity plays an important role, and dismiss alternative hypothesis, such as that negative income shocks in general diminish the appetite for an environmental agenda. 
Next, we explore another competing hypothesis, namely that climate scepticism shrinks less in layoff counties because of differential shocks in partisanship. Unlike his opponent, the 2016 Republican Presidential candidate adopted pro coal mining stances. This positioning might have increased Republican partisanship in layoff counties, where the survival of the coal-mining sector was perceived as an existential issue in the face of the mass layoffs. Against this background, climate scepticism might have spread more in layoff counties, given voters’s tendency to adopt the views of their representatives among the political elite, especially on complex issues (Horsey et al., 2016). However, although we observe an upward trend in votes for Republican candidates in coal-mining counties over the last two decades, we find no evidence that layoffs accelerated this trend.  
Finally, we separate survey respondents who report to be ignorant about climate change from those who deny its existence, and find that layoff counties have a higher share of climate change “ignorant” rather than “deniers”. This fact, coupled with additional evidence that residents of layoff counties are less likely to discuss climate change and read about it in the media, confirms the hypothesis of active information avoidance, and reveals that climate change in communities threatened by the green transition is likely becoming a taboo (Benabou and Tirole, 2011).