Investigating the link among ICT, electricity consumption, air pollution, and economic growth in EU countries

ABSTRACT

This study investigates the relationship between Information and Communication Technology (ICT) penetration, electricity consumption, economic growth, and environmental pollution within a multivariate framework. A panel of 16 EU countries was analyzed over the 1990–2017 period. The results of the Dumitrescu-Hurlin panel causality tests reveal the existence of a one-way causality running from ICT usage and electricity consumption and which, in turn, causes a rise in CO₂ emissions and improves GDP. Panel Mean-Group regression results highlight that economic growth is also an important driver of electricity demand as a 1% economic growth rate is associated with a 0.13% increase in per capita electricity consumption. These results demonstrate for the first time in the literature a single assessment on the linkages among ICT, electricity use and environmental pollution with a novel focus on the EU. Based on these results, adequate measures should encompass the adverse environmental effects of ICT, while energy saving policies must be carefully implemented in order not to hinder economic growth.

KEYWORDS:

• Electricity consumption
• co₂ emissions
• internet usage
• economic growth
• eu
• panel data

Nomenclature

AI: Artificial Intelligence

AMG: Augmented Mean Group

ARDL: Autoregressive Distributed Lag

ASEAN: Association of Southeast Asian Nations

BRICS: Brazil Russia India China South Africa

CCEMG: Common Correlated Effects Mean Group;

CD: Cross-sectional Dependence

CDMG: Mean Group estimator on Cross-sectionally Demeaned variables

CLP4NET: Cyber Learning Platform for Network Education and Training

CO₂: Carbon Dioxide

CS: Communication Studies

DH: Dumitrescu–Hurlin

DSL: Digital Subscriber Line

DSM: Demand-Side Management

EM: Energy Management

EMU: Economic and Monetary Union

EU: European Union

FDI: Foreign Direct Investment

FMOLS: Modified Ordinary Least Squares

GHG: Greenhouse Gas

HCI: Human Computer Interaction

ICT: Information and Communication Technology

IEA: International Energy Agency

IoT: Internet-of-Things

IS: Information Systems

KOSST: Knowledge Organization Systems and Semantic Technology

MG: Mean Group

OLS: Ordinary Least Squares

PIM: Plant Information Models

PMG: Pooled Mean Group

PPC: Pedroni Panel Cointegration

RES: Renewable Energy Sources

SDGs: Sustainable Development Goals

STIRPAT: Stochastic Impacts by Regression on Population, Affluence, and Technology

TFPG: Total Factor Productivity Growth

VR: Variance Ratio

WEC: World Energy Council

Notes

¹ Before the emergence of ICT, the outstanding economic growth of some Asian countries (Japan, Korea, and Hong Kong) during the second half of the 20^th century had already been attributed to the improved access to information and effective communication (Vu 2011).

² On a global level, ICT professionals have recorded an increase of 3,600 (from 5 thousand to 18 million) over the period 1950–2014. This growth rate reaches 620,000 for ICT users over the same period (Savulescu 2015).

³ This is in line with Laitner, John, and Martinez (2008) when argued that “for every kilowatt-hour consumed by ICT systems, a savings of 10 kilowatt-hours were enabled”.

⁴ According to Greenpeace (2006), the average lifespan of computers has decreased from six to two years over the period 1997–2005 in advanced economies.

⁵ By reporting that the internet economy can potentially enhance economic growth using less energy, Room (2001) admitted that the “new energy economy” is capable of drastically modifying the standard energy-growth pattern.

⁶ As defined by Schumpeter (1934), an innovation is qualified as ecological if and only if it can both “reduce the environmental burden and contribute to improving a situation according to given sustainable targets”.

⁷ Internet penetration data are available at: https://databank.worldbank.org/source/world-development-indicators.

⁸ Electricity consumption data are available at: https://www.oecd-ilibrary.org/energy/data/iea-world-energy-statistics-and-balances/world-energy-balances_data-00512-en.

⁹ Sectoral value added data are available at: https://data.oecd.org/natincome/value-added-by-activity.htm.

¹⁰ CO₂ emissions from fuel combustion data are available at: https://www.oecd-ilibrary.org/energy/data/iea-co2-emissions-from-fuel-combustion-statistics/co2-emissions-by-product-and-flow_data-00430-en.

Urban population data are available at: https://databank.worldbank.org/source/world-development-indicators.

Internet penetration data are available at: https://databank.worldbank.org/source/world-development-indicators.