ICT's impact on CO2 emissions in GCC region: The relevance of energy use and financial development

Abstract

This study looks into ICT's asymmetrical impact on emissions of carbon dioxide (CO2) controlling energy use and financial development (FD) in GCC countries. It uses panel data covering 1995–2019, employs 2nd generation unit root and Westerlund cointegration tests, and applies panel-pooled “generalized least square (GLS)” techniques. The “pooled mean group (PMG)” method and the “Dumitrescu-Hurlin (D-H)” causality test are employed to verify the robustness of GLS estimation. The bootstrap cointegration test corroborates a long-run cointegration among variables. GLS findings exhibit an asymmetric relation between ICT and CO2 emissions; both the affirmative and negative shocks of ICT and FD are associated with decreased CO2 emissions, while energy use enhances the latter. Hence, promoting ICT is essential to reduce CO2 discharges in the GCC region due to its large negative stimulus on CO2 emissions. The PMG estimation also produces findings similar to those of the GLS outcomes and verifies the GLS outcomes' robustness. The D-H causality check also validates the GLS and PMG outcomes.