Information communication technology and electricity consumption in emerging economies

Abstract

This study examines the impact of information communication technology (ICT) on electricity consumption in emerging economies. The empirical results, obtained from dynamic panel demand models, show a positive and statistically significant relationship between ICT and electricity consumption when ICT is measured using internet connections, mobile phones or the number of PCs. Long-run ICT elasticities are smaller than income elasticities but because ICT growth rates are so much higher than income growth rates, the impact of ICT on electricity demand is greater than the impact of income on electricity demand. One implication of these results is that policies designed to close the “digital divide” between developed and developing economics by increasing the adoption of ICT in developing countries are put at odds with energy policies to reduce GHG emissions.