The road towards environmental sustainability: Investigating the role of information and communication technologies and green technology innovations

Abstract

Human activity is considered to be the largest contributor to global warming and environmental deterioration. In order to limit the destruction and transition toward a more sustainable environment, governments and corporations, are increasingly turning to Information and Communication Technologies (ICT) and green technology innovations. However, no consensus on whether ICT exert a positive or negative influence on the environment appears in the literature, and solid empirical evidence linking green technologies to environmental performance is lacking. This study fills this gap by empirically testing the impact of ICT and green technology on environmental sustainability measured using the environmental performance index (EPI) and takes into account the Environmental Kuznets Curve (EKC) framework. Further, it includes a set of control variables: financial development, urbanization, trade openness, and foreign direct investment. It uses a balanced panel for 21 countries for the years between 1995 and 2019. Results show that both ICT and green technology innovations exert a significant positive impact on environmental sustainability. Financial development, urbanization, and foreign direct investment also positively influence environmental sustainability, while trade openness negatively impacts the environment. The findings offer policy implications for governments on how to exploit the potential of ICT and green technology to achieve environmental sustainability.