THE EFFECTIVENESS OF GREEN INVESTMENTS: IMPACT ON ECONOMIC GROWTH AND PRODUCTIVITY

Abstract

This article examines the effectiveness of green investments as a driver of economic growth, productivity gains, and structural modernization of the economy. It is argued that, given the intensification of climate risks, resource constraints, energy instability, and the need to transition to a low-carbon development model, green investments are becoming strategically important. It is determined that their effectiveness is not limited to environmental benefits but encompasses economic, innovative, socio-economic, and productivity outcomes. The main areas of green investment are outlined, including the development of renewable energy, improving energy efficiency, the ecological modernization of industry, reducing greenhouse gas emissions, implementing circular business models, developing low-carbon transport, building energy-efficient infrastructure, and digitizing resource management. It is demonstrated that the impact of green investments on economic growth is both direct and indirect. The direct impact manifests itself through increased capital investment, the creation of new jobs, the development of green sectors of the economy, and the expansion of production of environmentally oriented goods and services. The indirect impact is realized through a reduction in the energy and resource intensity of production, the stimulation of innovation, increased competitiveness of enterprises, and a reduction in environmental risks. Particular attention is paid to the mechanism by which green investments influence productivity. The technological, innovative, resource-based, and institutional channels of this influence are identified. A system for evaluating the effectiveness of green investments is proposed across five areas: economic efficiency, productivity, innovative development, environmental performance, and socio-economic impact. It is argued that for Ukraine, green investments are an important tool for post-war recovery, infrastructure modernization, strengthening energy security, and integration into the European economic space. The main barriers to their activation have been identified, including limited financial resources, high investment risks, insufficient development of green financing, an unstable regulatory environment, and weak institutional coordination. It is concluded that the effective attraction of green investments will contribute to the formation of a sustainable, innovative, and competitive model of national economic development.