China’s Pathway to a Low Carbon Economy: Exploring the Influence of Urbanization on Environmental Sustainability in the Digital Era

Abstract

To protect the environment from any further damage, the implementation of the “smart cities” strategy supported by information and communication technologies (ICTs) is the need of the hour. Hence, this study estimates the impact of ICT and urbanization on environmental sustainability in China using the novel quantile autoregressive distributed lag (QARDL) method. The results of the QARDL model state the negative and significant impact of ICT on CO2 emissions in China for all quantiles, implying that an increase in ICT proved to be an important factor in improving environmental quality. In contrast, the estimated coefficients of urbanization are positively significant for all quantiles. This finding sustains the idea that large-scale urbanization is detrimental to the environment because the process of urbanization is among the leading sources of carbon emissions. In the short run, the negative impact of ICT on CO2 emissions can only be seen in higher quantiles, while the positive impact of urbanization on CO2 emissions is confirmed for all quantiles. Lastly, the asymmetric impact of ICT and urbanization is confirmed in the short and long run with the help of Wald tests. The ICT diffusion and smart urbanization approach can help in attaining environmental sustainability targets.