THE DIVERSE IMPACT OF ECONOMIC DIGITALIZATION ON CARBON DIOXIDE EMISSIONS ACROSS COUNTRIES

Abstract

This study examines the impact of economic digitalization on CO2 emissions by using the data of 100 countries from 2008 to 2019. First, we divide our sample into different income-level groups and use the Bayesian panel regression method to examine how economic digitalization can impact CO2 emissions in each group. Second, we conduct Bayesian quantile regression on the whole sample to determine how the different digital economies affect CO2 emissions across the quantile levels. The results obtained by the two approaches are consistent. We find that ICT infrastructure can increase CO2 emissions in the less-developed countries but help reduce CO2 emissions in the developed countries. ICT-related industry activities can help reduce CO2 emissions in nearly all the countries, but the impact differs across the countries. By contrast, ICT product and service exports can lead to an increase in CO2 emissions, but the effect is relatively small and will decrease gradually as the CO2 emissions level rises. Our results can provide helpful information and implications to policymakers to fully employ the advantages of economic digitalization to reduce CO2 emissions.