Environmental investment as a key factor in the formation and evolvement of an investment model for the growth of the Russian economy

The complex debate in the recent economic literature about environmental quality in economic growth, looking for a return to long-term sustainable growth in total factor productivity, recognizing the environmental aspect of development as an imperative confirm the relevance of the research topic. The aim of the study is to provide a theoretical substantiation of environmental investment as a key factor in ensuring long-term and sustainable economic growth, an “active start” to the radical transformation of the Russian economy in accordance with the requirements of the global Environmental, Social, and Corporate Governance agenda; another aim is to conduct an experimental testing of the identified scientific idea. Environmental investment is characterized as a type of responsible and transformative investment capable of generating incremental total factor productivity growth by stimulating specific green innovations. The methodology of the study included methods of identification, analysis and verification of an econometric model in the form of a system of dynamic regressions by Sh. Almon with distributed lags. Experimentally (by constructing different regressions and testing Student’s hypotheses for them, determining estimates of t-statistics) as applied to the Russian economy, we evaluated long-term and short-term responses of economic growth indicators to the volume of environmental investment (specifically, its priority focus, such as waste-free and recycling resources). The econometric model has established a long-term positive effect of environmental investments. The effect consists in protecting the integrity of natural capital and improving the condition of ecosystems, which is fundamental to maintaining the potential for economic the long-term growth. Short- and medium-term effects include creating new high-tech jobs in low CO2 sectors and restoring total factor productivity growth through green technological innovation. The main barriers to environmental investment in Russia have been identified, and the minimum necessary economic instruments to stimulate it have been developed.