Smart economies and climate outcomes: assessing the impact of digital transformation, economic resilience, and renewable energy on CO2 emissions
Abstract
In recent years, the rapid evolution of information and communication technology (ICT) has profoundly influenced various sectors of the economy. Nevertheless, it is crucial to underscore the environmental ramifications of the rapid expansion of information and communication technology. This research aims to examine the asymmetric effects of information and communication technology, renewable energy consumption, foreign direct investment, and economic growth on CO 2 emissions in G-20 countries from 2000 to 2022. The study used Dynamic Ordinary Least Squares (DOLS) and Pooled Mean Group Autoregressive Distributed Lag (PMG-ARDL) techniques. The preliminary step was to determine the normality of the data series using the second-generation unit-root tests (CIPS and CADF), which are known for their high efficiency and accuracy compared to the first-generation tests. The Pedroni and Westerlund cointegration test confirms a long-run relationship among foreign direct investment (FDI), economic growth (EG), information and communication technology (ICT), renewable energy (RE), and CO 2 emissions, as supported by the error correction term. The PMG-ARDL and DOLS analytical techniques confirm a positive contribution of FDI, EG, and ICT to CO 2 emissions, and declare that the G-20 countries face environmental sustainability challenges, even though they account for the largest share of global GDP and international trade. The appropriate policy implications and keenly observed practices of these sectors can help achieve a zero-carbon-emission environment without compromising economic growth, international trade, and global technological competition.