ICT and CO2 Emissions in the G20: A Channel-Based Mediation Analysis

In this study, we examine whether digitalization, measured by internet, fixed telephone, and mobile phone usage, has helped to lower carbon dioxide (CO2) emissions. The correlation between ICT and CO2 emissions is assessed via panel data analysis using a sample of 33 years of G20 countries’ data. We use mediation analysis to express the association between digitalization and CO2 via a set of channels, and we implement a panel econometrics model to measure the influence of digitalization and CO2 through both direct and indirect relationships. The association between digitalization and CO2 is divided into two channels: these channels have direct and indirect relationships, with the latter operating through different paths, encompassing industry, trading, and energy consumption from different sources, such as renewable and fossil fuels. Mediation analysis is used to distinguish between direct and indirect relationships, with our findings suggesting a nonlinear relationship between ICT and CO2 emissions that resembles an environmental Kuznets curve.