Improving ICTs (Mobile Phone and Internet) for Environmental Sustainability in the Western Balkan Countries

Abstract

The aim of this paper is to replicate an existing study using the Generalized Method of Moments on the impact of ICT penetration (Mobile Phone and Internet) in Western Balkan countries on environmental sustainability through changing CO2 emissions for the period 2000–2015. A two-step system GMM method is used to handle both endogeneity of the independent and persistency of the dependent variables. Two important findings are derived: First, we find that mobile phones have a positive impact, whereas the Internet has a positive but insignificant impact on CO2 emissions per capita in noninteractive models. The impact of ICTs is insignificant as far as CO2 emission from liquid fuel consumption is concerned in noninteractive specifications. Based on this finding, we suggest policymakers of Western Balkan countries follow interdisciplinary policies and strategies considering ICTs such as Internet penetration to mitigate CO2 emissions. Second, in interactive models, all marginal effects are negative, and in one specification the impact is statistically significant. We argue that increasing Internet penetration has a negative net effect on CO2 emissions from liquid fuel consumption. By calculating the policy threshold for this net effect, we discuss the practical implications for policy making in Kosovo where the average Internet penetration is below this threshold.