Analyzing the EKC hypothesis for technologically advanced countries: The role of ICT and renewable energy technologies

Abstract

International initiatives, such as the Paris Climate Conference and the COP26 conference, have highlighted the role of technology in fighting environmental problems. However, it is uncertain whether technologies are beneficial in curbing carbon dioxide (CO2) emissions. To find an answer to this question, the study focuses on four technologically advanced countries (United Kingdom, Switzerland, Norway, Denmark), considers information and communication technologies (ICT), renewable energy technologies (RRD), and economic growth in relation to environmental degradation, and tests the validity of the environmental Kuznets curve (EKC). The study applies Fourier approaches and uses data for the period 1989–2020. In this way, the study defines that (i) ICT and RRD are cointegrated with CO2 emissions; (ii) ICT mitigates environmental degradation in the United Kingdom, Denmark, Switzerland, and Norway; (iii) RRD expenditures, however, are not effective in reducing CO2 emissions; (iv) the EKC hypothesis is also validated for the countries studied. Thus, the study highlights the need for countries to rely on further use of ICT and income growth as effective policy instruments to mitigate CO2 emissions rather than RRD.