Environmental quality and energy transition prospects for G-7 economies: The prominence of environment-related ICT innovations, financial and human development

Abstract

Energy transition and reducing greenhouse gas emissions are fundamental to achieving sustainable development and ensuring a bright and healthy future. To contribute to the empirical literature on these objectives, this study explores the long-term influence of environment-related ICT innovations (EICT) on energy transition and greenhouse gas emissions (GHGE) in G-7 economies for the first time, while considering financial development (FD) and human development (HD). Additionally, the study investigates the moderating role of FD with EICT and HD in energy transition and GHGE. Using a Cross-Sectional Augmented Distributed Lag (CS-ARDL) technique to tackle the issues of cross-sectional dependency and slope heterogeneity, the study evaluated data from 1990 to 2020. The results indicate that EICT, FD, and HD have a significant positive effect on long-term energy transition, and mitigate GHGE in G-7 economies. Furthermore, the influence of EICT and HD on energy transition and GHGE is amplified in the presence of financial development, as evidenced by the moderating effect of FD. Based on these facts, the study suggests various policy measures, such as investing in clean technologies and education, to promote the energy transition and environmental quality in G-7 economies to achieve sustainable development goals.