The heterogeneous effect of ICT on countries with different levels of ecological degradation and income: A panel quantile approach

Abstract

Existing studies concerning the nexus between Information Communication Technology (ICT) and the environment have consistently reported findings of an average effect of ICT on environmental degradation. However, false conclusions can be drawn by ignoring that the degree of environmental quality differs across countries and relying solely on ICT's average impact. The present study argued that ICT's impact on the environment differs between countries with different levels of ecological degradation and income. This argument was addressed by employing Panel Quantile Regression (PQR) on panel data spanning 50 high-income economies, 49 upper-middle-income economies, and 72 low-income economies between 2000 and 2020. ICT infrastructure in each country was measured by combining fixed broadband and mobile cellular subscriptions. At the same time, environmental quality was measured by the ecological footprint. According to the PQR analysis, expanding ICT services was associated with a significant deterioration in environmental quality in countries with healthy ecological systems, regardless of income level. In contrast, developing ICT sectors improved the environment in countries with highly degrading environments. Based on this study's findings, a threshold level of the ecological footprint (rather than ICT) existed, after which expanding ICT services improved the environment. In this regard, this study's findings indicated that generalising the benefits of expanding ICT services on the environment is misleading. Consequently, this paper has provided different recommendations and policy implications for each income group.