The effect of information and communication technologies and total factor productivity on CO2 emissions in top 10 emerging market economies.

Abstract

The aim of this paper is to investigate the nexus among information and communication technologies (ICT), total factor productivity (TFP), and carbon dioxide (CO2) emissions in the top 10 emerging market economies for the period from 1995 to 2014 using the panel vector autoregressive (PVAR) approach. Analysis results suggest that the internet usage and fixed telephone subscriptions have a positive impact on environmental pollution, although mobile cellular subscriptions and TFP have a negative impact on carbon emissions. According to causality test results, there is bidirectional causality between CO2 and all independent variables. Consequently, the results justified the use of TFP instead of GDP as an indicator of the economic development and the importance of ICT in environmental problems since ICT has proven to be undeniable in environmental policies. Thus, possible policies prioritize environmental sustainability in the digitalization of the economy, which ensures both a pollution-reducing effect and an increase in TFP.