Impact Investments Through the Expansion of Renewable Energies — Macro Simulation Analyses and Overview of Green Finance Landscape of Austria

Mitigation of climate change on the Austrian level requires efforts to reduce greenhouse gas emissions via the increased use and expansion of renewable energies. In this regard, we quantify via simulation analyses the macroeconomic effects of expanding renewable energy use in electricity and heat production in Austria. The results clearly show that these measures to combat climate change in the long term can also generate positive short- and medium-term economic effects in the form of additional economic and employment growth. The timing of these results is highly relevant given the past economic downturn due to the COVID-19 pandemic and the crisis in Ukraine. After evaluating the Austrian Green Finance sector, it becomes clear that, on the one hand, risk exposure of investors rises when financial portfolios reflect high greenhouse gas emissions and, on the other hand, Green Finance portfolios yield similar returns on investment. Credible domestic climate policies and legislation can potentially support the financing of the necessary investments.