Are ICT and CO2 emissions always a win-win situation? Evidence from universal telecommunication service in China

Abstract

The role of Information and Communication Technology (ICT) in mitigating climate change is increasingly gaining attention, yet its environmental performance remains uncertain. This ambiguity serves as the motivation for examining how universal telecommunication service (UTS) impacts CO2 emissions. Utilizing a staggered difference-in-difference (DID) specification, our empirical investigation reveals that UTS exacerbates CO2 emissions. A series of robustness checks corroborate these findings. The study uncovers the mechanisms underlying this environmental degradation, pinpointing increased energy consumption, the promotion of secondary industries, and population migration as the key contributing factors. Importantly, the analysis reveals that the negative environmental effects are particularly pronounced in cities with low-income and relatively lower levels of market integration. However, the study finds that well-designed environmental regulations can offset the negative impact of UTS on the environment. Given the urgent need for climate action, these findings provide critical insights for policymakers to balance the societal benefits of universal connectivity with environmental sustainability.