Cambridge, Mass., Aug. 20, 2026 (GLOBE NEWSWIRE) -- Key MIT Sloan Findings:
- How can financial incentives promote learning and engagement with climate policies? MIT Sloan School of Management professors Michelle Hanlon, Namrata Kala, and Nemit Shroff found in their research that having a financial stake focused people’s attention toward learning and increased their financial literacy and support for climate action.
- How did people in the experiment with real assets differ from those with fantasy portfolios? Participants with real assets shifted their news consumption away from more polarized news sources, increased their knowledge of energy firms, increased their support for government action toward climate change solutions, and demonstrated greater willingness to donate to climate causes.
- How did the researchers track participants’ engagement with climate policies and learning over time? The researchers analyzed the effects six weeks and 8-10 months after the experiment, with effects particularly pronounced among participants with below-median baseline climate support at the beginning of the study. Long-term effects are much attenuated but still positive.
Scientific research into climate change has analyzed ways to mitigate its effect and some research has also shown it will have large costs to the global economy. But, in spite of this, there has been a lack of research focusing on building public understanding of climate change, as well as support for mitigation policies.
A new paper, “Seeing Green: The Effects of Financial Exposures on Support for Climate Action,” presents a new way to potentially increase support for climate mitigation policies, specifically, by providing access to trading energy sector stocks.
The paper is co-authored by MIT Sloan School of Management professors Michelle Hanlon, Namrata Kala, and Nemit Shroff, and Saumitra Jha from Stanford Graduate School of Business and Chagai Weiss from the University of Toronto.
How could financial incentives get people to engage with climate change mitigation?
“We wondered what might happen if we could get people to engage with some of the ideas around climate mitigation, and in particular, what might happen if we gave them incentives to learn about these ideas,” said Kala. “We tend to think providing information is really important and is highly policy-relevant, but because we are in an environment where people are given so much information all the time, we wanted to consider a different approach.”
This research centers on an experiment in which approximately 3,800 individuals from throughout the U.S. were provided with randomized access to financial stakes in energy companies. The study included six-week trading modules with either renewable energy (“green”) or fossil fuel (“brown”) stock portfolios valued at $50, $100, or $0 (which were “fantasy” portfolios).
Researchers found that the participants holding real assets demonstrated substantially larger effects compared to those with the fantasy portfolios, but effects were similar whether the participants had green or brown energy portfolios. Participants with real assets shifted their news consumption away from more polarized news sources (including on social media platforms) and toward financial news sources. They increased their knowledge of energy firms, becoming much more able to accurately estimate firms' carbon emissions. They also increased their support for government action toward climate change solutions and demonstrated greater willingness to donate to climate causes.
While respondents did not demonstrate a detectable change in daily pro-environmental behaviors (e.g., using reusable grocery bags, recycling), they did express an increased interest in considering climate in major life decisions (e.g., housing, automobile purchases).
How long were the effects of participant engagement with climate policies felt after the experiment?
The research shows that these positive effects remained strong six weeks after the experiment, and eight-to-ten months after the experiment, these effects had faded but were still present. In addition, the effects of having stakes in energy markets were particularly pronounced among participants with below-median baseline climate support at the beginning of the study. Effects were approximately 1.6 times larger at the end of the study and nearly five times larger at the eight-month follow-up. This finding indicates that this type of intervention could successfully broaden support for climate action.
“We found that having a financial incentive, even if it's not very large, grabs people's attention and focuses them towards learning,” said Kala. “It’s important to note that we didn’t tell people what to think, but gave them stakes in firms and simply allowed them to learn about the energy markets—and we found that they did learn. Their financial literacy improved, their knowledge about firms and emissions improved, and their policy support grew from there.”
Attachment
Casey Bayer MIT Sloan School of Management 914.584.9095 bayerc@mit.edu