Does technological progress make OECDcountries greener? New evidence from panel CS-ARDL

Abstract

Purpose– This paper aims to examine the impact of information and telecommunication technologies (ICT-proxied by mobile phone subscription and Internet usage) on carbon dioxide (CO2) emissions in the Organization for Economic Cooperation and Development (OECD) countries from 1990 to 2018. Design/methodology/approach– The Cross-section Autoregressive Distributed Lag (CS-ARDL) model is employedtoaddressthepotential cross-section dependence problem. CommonCorrelated Effects Mean Group (CCEMG) and Augmented Mean Group (AMG) estimators are used to test for robustness of results. Findings– Results reveal contrasting effects of mobile phone subscription and Internet usage on CO2 emissions. While mobile phone penetration helps mitigate CO2 emissions, Internet usage tends to increase the emissions. Findings show that renewable energy is beneficial to the environment while economic growth is harmful to the environment. The effects of financial development and trade openness seem negligible. Practical implications– This study offers practical implications for policymakers. As different proxies of ICTcouldhavecontradictoryimpactonCO2,governmentsshouldbecautiousagainstutilizingICTtomitigate CO2. Findings point to the benefits of renewable energy in alleviating CO2 emissions. Therefore, governments are strongly advised to implement policies facilitating renewable energy consumption. Originality/value– Previous studies ignored the problem of cross-section dependence which could lead to biased results and cause misleading inferences. This study aims to fill this void in the literature.