Fixed and mobile broadband penetration and CO2 emissions: evidence from OECD countries

Abstract

The recent rapid increase in Internet data traffic and use of digital technologies—observed during the pandemic and forecasted as a consequence of the massive digital transition occurring in the world economies—are feeding concerns about the related possible negative environmental impacts, in terms of both energy consumption and Carbon Dioxide (CO2) emissions. We contribute to such debate by analysing the relation between two different digitalization dimensions, namely fixed and mobile broadband connections penetration, and CO2 emissions at the country level. Our paper provides empirical evidence, based on a panel of 35 OECD countries, that higher fixed and mobile broadband penetration levels are associated with lower levels of CO2 emissions, according to an Environmental Kuznets Curve-type relation. Moreover, we investigate whether the environmental effects of these two digitalization dimensions differ across high- and low-income OECD countries. By adopting fixed-effects models and fixed-effects two-stage least square estimators, the results, besides substantiating the Kuznet’s hypothesis in both groups of nations, confirm that higher fixed and mobile broadband penetration levels are associated to a reduction of CO2 emissions.