International Climate News

Abstract We construct a dataset with novel high-frequency climate attention indices for a broad cross section of both advanced and emerging economies. We do so by applying text analysis methods to news published by major national newspapers on Twitter over the sample 2014 to 2022. In order to form hypotheses on the response of both international investment flows and currencies to global and local climate attention news, we consider a model in which: (i) investors price climate news shocks; (ii) investment goods can be used to increase green or brown assets; and (iii) there are both local and global climate attention shocks. Our model predicts that a country subject to a relatively more adverse climate news shock should experience both a decline in its net exports and an appreciation of its currency. Our novel data cofirm these predictions