Abstract
In the last decade, severe natural disasters caused by climate change like floods, landslides, wildfires, heatwaves, droughts, storms, and hurricanes are increasing in frequence and intensity. This has sparked "eco-anxiety," defined as the chronic fear of environmental catastrophes due to the irreversible impact of climate change. Considering the relevance and urgence of the topic, several policies were introduced to reduce and offset the CO2 emissions to mitigate such disasters. However, due to the complexity of the phenomenon is important to understand whether such interventions are perceived as effective by individuals.
This project explores through a lab experiment how climate change, exposure to disasters, emotions, and economic choices are linked. The primary goal of our work is to analyze how eco-anxiety affects risk attitude and loss aversion. Then, drawing upon the growing literature on the topic, we analyze whether financial literacy (with a particular focus on the sustainable finance literacy) can mitigate eco-anxiety.