Smart economies and climate outcomes: assessing the impact of digital transformation, economic resilience, and renewable energy on CO2 emissions

Do Information and Communication Technology, Foreign Direct Investment and Renewable Energy Impact Carbon Footprint? Evidence From South Asian Countries

Amid intensifying global climate challenges and the rapid expansion of digital technologies, this study analyses the effects of renewable energy (RE) and information and communication technology (ICT) on carbon footprint (CF) while examining the moderating role of foreign direct investment (FDI) within the proposed framework. The study utilizes a panel dataset covering five South Asian Economies over the period from 1996 to 2022. To capture the multidimensional nature of digitalization, a composite ICT index is constructed. Furthermore, the method of moments quantile regression (MMQR) is employed to examine heterogeneous effects across different levels of carbon emissions. The results reveal that ICT decreases CF at the lower quantile. Importantly, the interaction between ICT and FDI has a significant positive impact on the environmental benefits of ICT, particularly at the lower quantile. Furthermore, RE tends to increase CF at the lower quantile. However, the negative effect of RE on emissions is strong at the higher quantile. Notably, this effect becomes more pronounced in the presence of FDI. This implies that FDI reinforces the emission‐reducing capacity of RE where it is most needed. These findings indicate that when digital and clean energy changes are accompanied by specific foreign investments, they are more likely to result in environmental benefits. Therefore, policymakers in South Asia should adopt a strategic policy that balances the expansion of technology with the inflow of capital with an aim to improve environmental sustainability.

The Influence of Environmental Policies and Technologies on the Transition to Renewable Energy.

Renewable energy capacity (REC) plays a central role in achieving sustainable development and carbon neutrality, yet the effects of ecological policy performance, environmental quality, technological innovation, and green economic growth on REC remain heterogeneous across countries and stages of renewable energy development. This study investigates the determinants of renewable energy capacity across 21 OECD countries from 2000 to 2020, focusing on ecological policy performance (EPI), greenhouse gas (GHG) emissions, eco-friendly technology (EFT), and Green GDP. The empirical framework employs the Panel Autoregressive Distributed Lag (ARDL) bounds testing approach to examine long-run cointegration, the Method of Moments Quantile Regression (MMQR) to capture heterogeneous effects across the conditional distribution of REC, and panel Granger causality tests to determine the direction of causal relationships. The Panel ARDL bounds test confirms a stable long-run equilibrium relationship among the variables (F = 7.845, p < 0.01). MMQR results show that EPI exerts a positive and progressively stronger effect across quantiles (0.092-0.212), while EFT exhibits the steepest positive gradient (0.131-0.221) and demonstrates bidirectional causality with REC, indicating a reinforcing cycle between technological innovation and renewable energy deployment. GHG emissions have a modest positive association with REC (0.048-0.082) but do not unidirectionally cause REC; instead, higher renewable energy capacity significantly reduces emissions. Green GDP consistently exhibits a negative effect on REC (-0.348 to -0.138), although this effect weakens at higher renewable energy capacity quantiles, suggesting a transitional adjustment during the shift toward a greener economy. These findings indicate that the effects of environmental policy, technological innovation, emissions, and green economic performance are stage-dependent, highlighting the need for deployment-specific policy frameworks, sustained investment in green research and development, and complementary policy instruments to mitigate short-term adjustment costs while accelerating the renewable energy transition.

Achieving SDG 7 through ecological modernisation: how does governance moderate the drivers of clean energy capacity expansion?

Does Globalization Accelerate or Mitigate Greenhouse Gas Emissions? Evidence from Energy Transition and Technological Innovation in Central Asia

Greenhouse gas (GHG) emissions have emerged as a critical challenge to sustainable development in Central Asia, where rapid economic transformation, rising energy demand, and increasing globalization have intensified environmental pressures. This study investigates the determinants of GHG emission growth in Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan over the period 2000–2024 within the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) framework. Specifically, the analysis examines the effects of economic growth, energy intensity, renewable energy consumption, technological innovation, urbanization, and globalization on annual GHG emission growth. To ensure robust inference in the presence of cross-sectional dependence and heteroskedasticity, the empirical analysis employs Driscoll–Kraay standard errors (DKSE), Panel-Corrected Standard Errors (PCSE), and Feasible Generalized Least Squares (FGLS). Furthermore, the Method of Moments Quantile Regression (MMQR) is applied to examine distributional heterogeneity by assessing whether the effects of the explanatory variables vary across the lower, median, and upper quantiles of the conditional distribution of GHG emission growth. The empirical findings reveal that energy intensity is the dominant driver of GHG emission growth across all estimation techniques, whereas renewable energy adoption and technological innovation significantly mitigate environmental degradation by reducing emissions growth. The MMQR results further demonstrate that the estimated effects of the explanatory variables vary across the conditional distribution of GHG emission growth. In particular, the mitigating effect of globalization becomes more pronounced toward the upper quantiles of the conditional distribution, indicating that its environmental consequences differ across the distribution of GHG emission growth rather than across predefined groups of countries. By contrast, the effects of economic growth and urbanization exhibit greater heterogeneity across the conditional distribution, while the effects of energy intensity, renewable energy, and technological innovation remain broadly consistent in direction. These findings underscore the importance of improving energy efficiency, accelerating the deployment of renewable energy technologies, strengthening innovation capacity, and promoting environmentally sustainable economic integration to achieve long-term climate objectives in Central Asia. By providing comprehensive evidence based on complementary mean-based estimators and distribution-sensitive quantile analysis, this study contributes to the growing literature on the determinants of GHG emissions in emerging economies and offers important policy implications for balancing economic development with climate change mitigation and environmental sustainability.

Do environmental technology and renewable energy improve financial development? Evidence from G7 Countries

This study reveals the impact of GDP per capita, trade openness, renewable energy and technology on financial development in the world's most developed countries for the period of 1990-2021. In this context, this study especially focused on whether environmental technologies and renewable energy support financial development. Driscoll-Kraay Panel regression analysis is used to estimate panel data in this study. In addition, panel quantile regression analysis is performed to determine the coefficients of the variables at different quantile. The long-run results are authenticated using panel fully modified ordinary least square (FMOLS), dynamic ordinary least square (DOLS) and canonical cointegration regression (CCR). It is concluded that increases in renewable energy consumption and environment-related technology reduce financial development in the long-run. Although many studies found that financial development has positive effects on renewable energy consumption, the feedback effect is negatively in G7 countries to current study. In other words, policy incentives should be provided to return the productive resources created by financial instruments used in renewable energy investments back to the financial system and balance financial growth between environmental sustainability. The results suggest that financial markets should be regulated to obtain the positive effects of environmentally friendly investments. In this respect, this study signals that we have entered a period in which financial markets need to be reorganized.

Revisiting the environmental costs of digitalization: evidence from advanced economies

Digitalisation has greatly changed development approaches worldwide, including increasing efficiency and productivity in sectors. But the potential impact on the environment is unclear. This study examines the effects of digitalisation on the environment in G7 economies between 2000 and 2023. A composite digitalization index is built by applying principal component analysis (PCA) and the carbon dioxide (CO 2 ) emissions is used as a proxy for environmental degradation. The study uses PMG-ARDL model to provide strong empirical analysis and FMOLS model as a robustness test due to cross-sectional dependence, slope heterogeneity and mixed integration order. The results show that digitalisation helps to lower CO 2 emissions in G7 countries, supporting environmental sustainability through technological progress. The EKC is verified, as initial economic development leads to rising emissions and beyond a threshold, lower emissions. In addition, energy use is a major contributor to environmental damage, and FDI results a decline of emissions. The findings underline the importance of policymakers to incorporate environmental concerns in digital transformation policies. To achieve maximum environmental benefits from digitalization, it is important to promote energy-efficient digital infrastructure and provide incentives for green innovation. The study highlights the need to make sure digital development is aligned with sustainability goals.