ICT, energy consumption, financial development, and environmental degradation in South Africa

Abstract

The ICT, energy consumption, and carbon dioxide emissions (CO2) relationship is examined for South Africa spanning the period 1970–2019, while controlling for the effects of financial development. The findings of the study based on the Autoregressive Distributed Lag (ARDL), Dynamic Ordinary Least Squares (DOLS), and Fully Modified Ordinary Least Squares (FMOLS) estimators show that ICT and fossil fuel consumption contribute to carbon dioxide emissions, while renewable energy consumption and financial development reduce carbon dioxide emissions. Specifically, the results show that a 1% increase in ICT activities will increase CO2 emissions by 0.565% in the long-term, and any temporary shock to this long-run relationship is corrected by 93.20%. Further, there is no evidence of threshold effect of ICT on carbon emissions.

Keywords

• ICT
• Carbon dioxide emissions
• Renewable energy
• Fossil fuel
• Financial development
• ARDL