Responsible Investment and Responsible Consumption

Abstract

Should households focus on responsible investment (SRI) or responsible consumption (SRC) to mitigate externalities? Using a general equilibrium model linking product and capital markets, we show that neither strategy is efficient on its own—each shifts prices and triggers offsetting market responses. Combining SRI and SRC neutralizes these effects and maximizes impact. This complementarity holds across diverse settings, even when SRI alone would have negligible impact. The effectiveness of green finance, therefore, critically depends on households acting as both investors and consumers. This paper was accepted by Bo Becker, finance. Funding: This work was supported by Germany’s Excellence Strategy [Grant EXC 2126/1-39083886], Deutsche Forschungsgemeinschaft [Grant CRC TR224 project C03], and the Portuguese Foundation of Science and Technology [Grant PTDC/EGE-ECO/6041/2020].

中文摘要

家庭应专注于责任投资（SRI）还是责任消费（SRC）以减少外部性？通过构建连接产品市场和资本市场的通用均衡模型，我们发现这两种策略单独使用时均非有效——每种策略都会改变价格并引发抵消性的市场反应。将SRI与SRC结合使用可中和这些效应，并最大化影响。这种互补性在多种情境下均成立，即使SRI单独作用时影响甚微。因此，绿色金融的有效性关键取决于家庭同时作为投资者和消费者的双重角色。本文由金融学编辑Bo Becker接受。资助：本研究得到德国卓越战略[Grant EXC 2126/1-39083886]、德国研究基金会[Grant CRC TR224 project C03]以及葡萄牙科学与技术基金会[Grant PTDC/EGE-ECO/6041/2020]的支持。