Pakistan Journal of Commerce and Social Sciences

2018, Vol. 12 (3), 758-783

Pak J Commer Soc Sci

Information and Communication Technology (ICT)

and Environmental Sustainability in Developed and
Developing Countries
Muhammad Tariq Majeed
School of Economics, Quaid-i-Azam University, Islamabad, Pakistan
Email: [email protected]

Abstract
This study conducts a comparative empirical analysis of 132 developed and developing
economies to explore the links of ICT with environment over the period 1980-2016. The
empirical analysis is based on Pooled Ordinary Least Squares (POLS) and Generalized
Method of Moments (GMM) estimation techniques. Theoretically environmental effects
of ICT are ambiguous. To settle it empirically, this study points out the heterogeneous
consequences of ICT for environment in developed and developing countries. Findings of
the study suggest that ICT has the power to determine ecological future of the world.
However, its favorable outcomes are observed only in developed countries while adverse
impacts prevail in developing countries. The empirical results confirm „Greening through
ICT‟ hypothesis for developed countries implying that ICT is an effective tool to mitigate
environmental degradation. Moreover, „Environmental Kuznets‟ hypothesis is also
confirmed which implies that the relationship between CO2 emissions and GDP per
capita is non-monotonic. The empirical analysis is based on novel measures of ICT such
as online service, telecommunication infrastructure and electronic government unlike
previous literature that generally emphasized only internet as a measure of ICT.
Moreover, to the best of our knowledge, this is the first study of its kind that identifies
heterogeneous outcomes of ICT between developed and developing countries. Findings
of the study imply that investment in ICT infrastructure is essential for environmental
sustainability only in the case of developed countries.
Keywords: ICT index, E-waste, environmental degradation, CO2 emissions, green
economy, environmental technology, E-government, greenhouse gas emissions, fossil
fuels.
1. Introduction
The emerging environmental issues have created many controversies and public debates.
Now environmental degradation has become a global challenge. The literature shows that
if the trends of present emissions remained continue, an estimated trillion tons of carbon
dioxide will be added by the year 2050 which could have adverse consequences for
human life (Lashkarizadeh and Salatin, 2012).
The role and importance of ICT for different economic outcomes have been studied in
recent years. The research has largely documented favorable economic outcomes of
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increasing use of information communication technology (ICT) (Niebel, 2018; Majeed

and Ayub, 2018). However, the ecological dimensions of ICT have received least
attention in the literature. In effect, ICT has influenced human life in many perspectives
including ecological aspects of life.
The links of ICT with environment are rather complex. On the one hand, ICT growth
deteriorates environment through increasing production, use and disposal of ICT
products. For instance, increasing e-waste and larger use of energy in manufacturing
cause adverse effects on the quality of environment (OECD, 2010; Houghton, 2015). Life
cycle theory of ICT suggests that several stages of the life of ICT result in pollution. The
life cycle of ICT related products spans over „production, delivery, transport, use and
disposal‟ (Yi and Thomas, 2007; Zhang and Liu, 2015).
On the other hand, ICT is considered a solution to reinforce environmental protection, to
mitigate the adverse impacts created in the environment by human activities, and to
address key environmental challenges such as climate change and sustainability. ICT can
also help to mitigate the environmental degradation through increasing awareness of
environmental issues and utilization of environmental friendly technology (Plepys, 2002;
Lashkarizadeh and Salatin, 2012). ICT applications help to predict and manage
environmental related risks. For example, computerized simulation tools can make
learning of the “learning by simulation” to facilitate decisions making procedures and to
prevent the serious consequences of trial and error. Another aspect of ICT is “internet
network” that positively influence the knowledge of environment.
The links of ICT with environment also depend upon the rebound effects of ICT. Theory
of rebound effects implies that the positive effects of technology can be offset in the long
run. If, for instance, ICT developments lead to cheaper production, the demand for
product will increase, thereby increasing more pollution. These rebound effects create
unclear effects of ICT for environmental sustainability. Figure 1 indicates that the
rebound effects of ICT can be categorized into three levels that are direct, indirect and
systematic effects.
ICT based solutions are considered favorable for environment sustainability as they help
to reduce greenhouse gas emissions (Webb, 2008; Uddin, 2012). The dematerialization
effect of ICT implies „a shift from delivering physical products to delivering services‟.
For example, the increasing use of e-mail communication caused reduction in the use of
paper and physical delivery of messages. Likewise, increasing use of advanced
technologies such as internet telephony and video conferencing have provided numerous
opportunities for businesses and the society to decrease commuting, thereby lessening
greenhouse gas emissions.
Moreover, increasing use of e-commerce and e-banking is facilitating online transactions
which in turn reduce physical travel, thereby reducing greenhouse gas emissions. Other
than decreasing dependency on physical travelling, ICT is also helping in providing
intelligent and automated solution in various sectors such as power generation,
agriculture and manufacturing. As such ICT is considered as a low carbon enabler and a
key determinant of environment sustainability which can facilitate reduction in carbon
emissions in various sectors such as power, transportation and buildings. The smart 2020
report pointed out that ICT can cut greenhouse gas emissions by 2020 (Webb, 2008).

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Since the 2014 number of mobile devices has outpaced the number of humans on earth.
Moreover, the ratio of all devices to humans is even high. This ratio is likely to increase
in future as technology is progressing at very fast rate. Furthermore, recently, vehicular
network is being developed to offset the side effects of road traffic and accidents. This
intelligent transport system will allow vehicles to communicate each other in different
regions. According to an estimate the number of car will reach to 1.5 billion by 2035. If
these cars are connected with vehicular network then ICT pressure will increase on the
earth.
Consequently, as the technology is increasing and world is becoming more
interconnected, the power consumed by ICT and carbon emitted by ICT is also
increasing. The ICT industry is becoming power drainer and contributes 2% of global
carbon emissions. This value represents a total carbon footprint 830MtCO 2e as of year
2007. This amount of carbon footprint is equivalent to the carbon footprint emitted by air
industry. As a consequence of increasing technological developments, the carbon
footprint of ICT is expected to grow by 75% which is equal to 1430MtCO2e. The
increasing carbon foot print of ICT has become a growing concern for societies because
carbon emissions influence climate which affects natural environment and society.
The research has shown that climate changes affect average temperatures in the different
regions across the globe. Such changes cause natural disaster across the globe. For
instance, the study of Guha-Sapir et al. (2012) exposed that floods and droughts have
increased in terms of magnitudes and impacts. They exhibited that economic damages
from natural disasters were highest in 2011 amounted to approximately that is $b 614.1.
This amount also showed a rise of 235% as compared to year averaged damage from
2001 to 2010. Furthermore, the number of victims of natural disaster increased from 14
million to 22 million in 2011. These natural disasters, in addition to climate change
harmfully affect the society in terms of lifestyle, health and eating habits.
The extant literature on ecological dimensions of ICT (shown in Figure 1) is based on
qualitative analysis. Some of the studies focus on country specific evidence. The
evidence on developing economies is largely neglected. In particular a comparative
analysis of developed and developing economies is missing in the current stream of
literature. This study argues that the diverse effects of ICT infrastructure and its
implications for environmental sustainability need to be focused differently for developed
and developing economies.
This study contributes into the emerging literature on ICT and environment by analyzing
the impact of ICT on environment using different measures of the ICT for a large number
of developed and developing countries. The empirical analysis is conducted using POLS
and GMM estimation techniques. To address the potential problem of endogeneity, the
instrumental techniques of estimation are used. Findings of the study imply that
investment in ICT infrastructure is essential for environmental sustainability in the case
of developed economies to take the advantage of „Greening through ICT‟. In contrast,
developing economies need protection from the adverse environmental consequences of
ICT.

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ICT and Environment

Direct Impacts Indirect Impacts Systematic Impacts

[First-Order Effects] [Second-Order Effects] [Third-Order Effects]

ICT Production, Response to the Impact

Delivery, Use and ICT Applications of ICTs and Changes in
Disposal Consumer Behavior

Figure 1: Ecological Dimensions of ICT

The remaining paper is structured as follows: Section 2 provides review of the literature
on the links of ICT with environment. Section 3 illustrates the analytical frame work.
Section 4 gives the description of data sources and variables used. Section 5 presents the
empirical results. Finally Section 6 concludes the paper and offers policy implications.
2. Literature Review
Environmental degradation has become a global challenge as economic activities all over
the world are contributing to this problem. Economic activities such as industrialization
and development cause over exploitation of natural resources that create more pollution
and accelerate the process of environmental degradation (Garber, 2011). Environmental
degradation is an outcome of uncontrolled human activities at different phases of
economic development and growth such as transportation, agriculture and energy
production (Agena, 2007; Siddique and Majeed, 2015; Majeed and Mumtaz).
Another parallel development in recent decades is caused by expansion of ICT
infrastructure to a varying degree across the globe. ICT infrastructure is taking central
position in all economic activities such as production and consumption of goods and
services. It is well thought that ICT plays a central role in boosting economic growth and
development.
The potential benefits of ICT are well realized around the world (Niebel, 2018; Majeed
and Khan, 2018). Little attention, however, has been paid to an equally important issue
that how does ICT developments determine climate change. Moreover, the extant
literature on ICT and climate change predicts diverse outcomes of ICT expansion. In
effect the links of ICT and environment are complex and conflicting. Therefore it is
important to examine the potential links and to provide empirical evidence to have a
better understanding of this emerging issue. The world is facing various environmental
challenges such as e-waste management, natural habitat loss, loss of biodiversity, water
and air pollution.

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The literature on ICT and CO2 emissions can be classified into three strands. First strand
of the literature views ICT development as favorable for sustainability. In contrast, the
second strands views ICT development as unfavorable for environmental sustainability.
The third strand of the literature considers that the links of ICT with environment remain
unclear because of the „rebound effects‟. Plepys (2002) argues that ICT has the capacity
to decouple economic growth from environmental degradation. It can provide
information and awareness to attain balance between environment sustainability and
economic development.

• Lower power consumtion of ICT equipment (such

as server, router, terminal device)
• Typical abatemnt levers
Greening ICTs • Ultra lower power device, optical router, sleep
mode
• Creation of applicable green enery in the IT sector

• Contribution of ICT services in reducing industrial

and societial energy consumption leveriging of
ICT to make various activites more efficient
Greening
•
Through ICTS Examples: e-commerce, video confercing;
paperless office; BEMS; HEMS; smart grid; smart
cities; smart manfucurting

Figure 2: Greening ICTs & Greening through ICTs

The potential uses of ICT to enhance environmental sustainability can be classified into
types of applications that are „Greening of ICTs‟ and „Greening through ICTs‟. „Greening
of ICT‟ means the reduction of carbon intensity of the ICT sector itself, while „Greening
through ICT‟ implies that achieving the de-carbonization in other sector through
implementation of ICT services. Since ICT sector contributes 2% of global emissions,
„Greening through ICTs‟ may have larger impact on environment sustainability as
compared to its own footprint. According to Webb (2008), greening trough ICT services
could be seven times the negative impact of ICTs to greenhouse gas emissions.
The studies of Yi and Thomas (2007), Houghton (2015), Bekaroo et al. (2016) and Gonel
and Akinci (2018) emphasize the importance of ICT for ecosystem and environmental
issues. However, these studies do not provide empirical analysis. Lashkarizadeh and
Salatin (2012) provide empirical evidence on the links of ICT with environmental
degradation using the data of 43 developed and developing countries from 2003 to 2008.
Findings of their study suggest that ICT expenditures lead to decrease in CO2 emissions.
Since the analysis is based on a short time period and a small sample, it cannot be
generalized globally. Zhang and Liu (2015) find the negative effect of ICT industry on
CO2 emissions in the case of China over the period 2000-2010. However, they merely
focus on gross production of electronic and information and manufacturing industry
ignoring other dimensions of ICT.

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Ozcan and Apergis (2018) show that information and communication technology reduces
air pollution using a panel of 20 emerging economies over the period 1990-2015.
Similarly, using a panel 12 Asian economies from 1993 to 2013, Lu (2018) shows that
information communication technology reduces carbon emissions. The scope of these
studies is limited as they use only „internet use‟ as proxy of information communication
technology. Moreover sample size of these studies is limited.
The second strand of the literature views ICT development negatively for environment
sustainability. The basic argument is that production of ICT related products contribute to
climate degradation. The ICT industry is becoming power drainer and contributes 2 % of
global carbon emissions. Moreover, management of e-waste is also considered as a
negative source of climate degradation.
E-waste, another dimension of ICT infrastructure, includes disposal of many ICT related
goods such as computers, cell phones, LCD screens, and RCT screens. Widmer et al.
(2005) argue that e-waste is an emerging global challenge and also a business opportunity
because it contains both toxic and valuable material in them. They further argue that e-
waste is poorly managed which causes burden on environment.
Liu et al. (2006) analyze the consequences of e-waste in China. They argue that recycling
process of e-waste causes adverse effects on environment and human health. Moreover,
they point out that illegal shipment of e-waste from other countries into the China
aggravates the problems related to e-waste. They argue that e-waste recycling is not
formally managed. In particular they find evidence that 60% of the e-wastes were sold to
private collectors which was passed into informal recycling processes. In addition, they
show that more than 90% Chines are not willing to pay for the recycling of their e-waste.
Osibanjo and Nnorom (2007) argue that ICT growth has caused improvement in the
capacity of computers but at the cost of their life time. Consequently a major quantity of
e-waste is generated annually. They point out that ICT development in third world
countries largely depend on the imports of second hand or refurbished electrical and
electronic equipments (EEEs) without the confirmatory testing for functionality. As a
result a large quantity of e-waste is presently managed in developing countries. They also
highlighted the challenges which developing countries face while managing e-waste.
These challenges include lack of appropriate infrastructures for e-waste, inadequate
legislation policy for e-waste, and an absence of any frameworks for implementation of
extended producer responsibility (EPR). Emmanouil et al. (2013) also emphasize the
better management of e-waste to reduce environmental burden.
Salahuddin et al. (2016) estimate the effects of internet usage on carbon emissions using
a sample of OECD countries over the period 1991-2012. They found no relationship
between internet usage and carbon emissions in the short-run and positive relationship in
the long run. The scope of this study is limited as they use only „internet use‟ as proxy of
information communication technology. Moreover sample size is limited.
The third strand of the literature considers the relationship of ICT development with
environment as uncertain because of the rebound effects. Theory of rebound effects
suggests that the positive effects of ICT in the short run can be off set in the long run. If,
for instance, ICT developments lead to cheaper production, the demand for product will
increase, thereby increasing more pollution. These rebound effects of ICT create unclear
effects on sustainability.
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Hilty et al. (2006) classified rebound effects of ICT on environment into three levels. The
first order effect suggests increasing e-waste, second order effect implies improved
efficiency of energy and third order effect implies shifts from product to service in
economy. Moreover, they argue that ICT development causes both positive and negative
effects on environment. The positive effects come through environmental friendly
technology while negative effects come through e-waste.
The literature discussed on ICT and environment exhibits following research gaps. First,
the studies on ICT and environmental changes are qualitative and descriptive in their
nature (Yi and Thomas, 2007; Houghton, 2015; Bekaroo et al., 2016; Gonel and Akinci,
2018). Second empirical analysis is generally conducted for a single country (Zhang and
Liu, 2015). Third, the literature generally focuses on developed economies (Salahuddin et
al., 2016). Fourth, some empirical studies question the favorable effects of ICT to carbon
emissions (Widmer et al., 2005; Liu et al., 2006). Fifth, some studies provide regional
specific evidence on ICT and environment nexus which cannot be generalized globally
(Ozcan and Apergis, 2018; Lu, 2018). Sixth, the available empirical studies measure
information communication technology with a single dimension such as internet usage
which cannot be generalized for other dimensions (Salahuddin et al., 2016; Ozcan and
Apergis, 2018; Lu, 2018). Seventh, empirical studies ignore the issue of endogeneity.
We conclude from the above discussion that ICT infrastructure plays an important role in
determining environmental degradation. However, the direction of relationship is not a
clear priori. Therefore, it is important to resolve this issue empirically. Some scholars
emphasize the role of ICT in determining environmental degradation but do not provide
empirical analysis. For instance, Li and Thomas (2007) and Houghton (2015) assert that
new methods and approaches are required to understand the impacts of ICT on
environment.
Theoretically environmental effects of ICT are ambiguous. To settle it empirically, this
study points out the heterogeneous consequences of ICT for environment in developed
and developing countries. Using a large panel data set of 48 developed and 84 developing
economies, this study empirically examines the links of ICT with environment. The
empirical analysis is based on novel measures of ICT such as online service and
electronic government. Moreover, to the best of our knowledge, this is the first study of
its kind that conducts a comparative empirical analysis of ICT-environment nexus at
global level during the time period of 1980 to 2016. This research also tacks care of the
endogeneity problem.
3. Methodology
The empirical model for this study is based on the studies of Grossman and Krueger
(1991) and Seldon and Song (1994). Following Grossman and Krueger (1991), we model
the environmental Kuznets Curve (EKC).
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y2 i,t + εi,t (1)
Where, CO2i,t represents carbon dioxide emissions (metric tons), Yi,t is GDP per capita
(constant 2011 US$), Y 2 i,t shows square of GDP per capita and εi,t is an error term.
Recently, the links of ICT with environmental changes are getting attention. However,
the relationship of ICT with environmental changes is not clear a priori. Theoretically,
ICT causes diverse effects on environment. On the one hand, ICT deteriorates
environment as a result of poor management of e-waste and excessive use of energy in

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manufacturing of ICT related products (Schluep et al., 2008; OECD, 2010; Houghton,
2015). On the other hand, ICT has the potential to mitigate environmental degradation by
increasing awareness of climate changes and promoting environmental friendly
technologies. Equation 1 can be extended as follows:
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y2 i,t + α3 ICTi,t + α4 log Xi,t + εit (2)
Where, ICTi,t is a measure of information communication technology comprising
different proxies. Since the impact of ICT on environment is not clear a priori, signs of
the coefficient of ICT can be positive or negative or insignificant (α3 > 0; α3 < 0; α3 =
0) . The term Xi,t demonstrates a row matrix of control variables that are fossil fuel,
energy use and urbanization. The expected coefficient signs of these three control
variables are positive because urbanization, energy use and fossil fuel increase CO 2
emissions. Equation 2 can be extended for different measures of ICT as follows:
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y2 i,t + α3 ftsi,t + α4 log Xi,t + εi,t (2.1)
2
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y i,t + α3 fbsi,t + α4 log Xi,t + εi,t (2.2)
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y2 i,t + α3 tiii,t + α4 log Xi,t + εi,t (2.3)
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y2 i,t + α3 osii,t + α4 log Xi,t + εi,t (2.4)
2
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y i,t + α3 egii,t + α4 log Xi,t + εi,t (2.5)
2
Log CO2i,t = αo + α1 Log Yi,t + α2 Log Y i,t + α3 icti,t + α4 log Xi,t + εi,t (2.6)
Where, ICT has been disaggregated into six important measures of fixed telephone
subscriptions (ftsi,t ), fixed broadband subscriptions (fbsi,t ), telecommunication
infrastructure index (tiii,t ), online service index (osii,t ), e-government index (egii,t ) and
information communication technology (ict i,t ). The index of ICT is constructed using
Principal Component Analysis of all ICT measures. Since the effects of ICT on
environment are likely to be heterogeneous between developed and developing countries,
all ICT measures are interacted with the dummy variables of developed and developing
countries to capture separate parameter estimates for developed and developing countries.
4. Data and Variables Description
The data used for empirical analysis has been drawn from various sources. The measures
of ICT are telephone, broadband, telecommunication infrastructure, online service and e-
government. Where telephone is measured as “fixed telephone subscriptions (per 100
people)”, broadband is “fixed broadband subscriptions (per 100 people)”. The data for
these two measures is taken from World Development Indicators (2016).
Telecommunication infrastructure index is “an arithmetic mean of five (standardized)
indicators including internet users, mobile subscriptions, fixed broadband subscriptions,
fixed telephone lines, and number of mobile subscriptions”, online service index ranks
the countries according to provision of online services and e-government index is “three
normalized scores weighted average on three dimensions of e-government. The
dimensions are telecommunication infrastructure (telecommunication infrastructure
index), human capital index and quality and scope of online services (online service
index).” The data for these three ICT measures is taken from International
Telecommunication Union (2016) and United Nations (2016).

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The outcome variable CO2 (metric tons) is taken from World Development Indicators
(2016). The data on real GDP per capita is constructed at 2011 constant prices (US$).
The data is derived from Feenstra et al. (2015).The control variable „energy‟ use refers to
use of primary energy before transformation to other end-use fuels. Fossil fuel
“comprises coal, oil, petroleum, and natural gas products.” urbanization is share of
population living in urban areas. These three variables are taken form World
Development Indicators (2016). The original study sample was based on all countries of
the world. However, after screening process a sample of 48 developed and 84 developing
countries is shortlisted.
Table 1 provides the descriptive analysis of the data used for empirical analysis. Columns
(1-5) provide description of the data for developed economies while columns (6-10)
present the description of the data for developing countries. It is evident from the Table 1
that developed and developing countries are considerably different in terms of our
focused variables of concern that are environmental degradation and ICT. CO2 emissions
on average are much higher in developing countries as compared to developed countries.
In effect, on average, developed countries are experiencing negative CO2 emissions. All
indicators of ICT are considerably higher in developed countries as compared to
developing countries.
Table 1: Descriptive Analysis of the Data
Variable Developed Countries Developing Countries
(1) (2) (3) (4) (5) (6) (7) (8) (9) (10)
Obs Mean SD Min Max Obs Mean SD Min Max
-
CO2 1806 2.10 0.69 0.05 4.23 3963 -0.26 1.51 2.96
7.45

Y 1994 9.99 0.71 7.97 11.97 4162 7.15 1.03 4.24 9.67

FF 1549 4.35 0.33 2.33 4.61 2772 3.86 0.81 0.58 4.61

UP 2445 14.09 2.49 8.46 19.39 4871 14.53 2.19 7.78 20.4
EU 1169 4.82 0.43 3.61 6.22 2093 4.98 0.64 1.61 7.09

FTS 2280 36.71 18.32 1.42 132.95 4573 7.06 9.50 0.00 88.7

FBS 917 15.90 12.48 0.00 61.74 1454 2.54 4.66 0.00 44.3

TCI 431 0.55 0.19 0.12 1.00 1000 0.13 0.13 0.00 0.66
OSI 431 0.57 0.23 0.03 1.00 1002 0.26 0.19 0.00 0.84

EGI 431 0.66 0.17 0.00 0.93 1002 0.34 0.16 0.00 0.73

ICT 815 0.89 0.85 -0.99 2.47 1239 -0.58 0.57 -1.16 1.49

Table 2 provides correlation matrix for developed economies. The correlation between
CO2 emissions and different measures of ICT is negative implying that „Greening
through ICT‟ hypothesis likely to hold in developed economies.

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Table 2: Correlation Matrix for Developed Countries

CO2 Y FF UP EU FTS FBS TCI OSI EGI ICT

CO2 1.00
Y 0.40 1.00
FF 0.30 -0.09 1.00
UP -0.11 0.15 0.16 1.00
EU 0.42 -0.15 -0.32 -0.27 1.00
FTS -0.14 0.62 -0.29 0.25 -0.21 1.00
FBS -0.12 0.48 -0.35 0.19 -0.12 0.45 1.00
TCI 0.01 0.74 -0.37 0.25 -0.10 0.76 0.67 1.00
OSI -0.11 0.30 -0.12 0.46 -0.12 0.46 0.42 0.60 1.00
EGI -0.11 0.55 -0.30 0.41 -0.12 0.69 0.62 0.89 0.89 1.00
ICT -0.04 0.58 -0.44 0.17 -0.01 0.52 0.84 0.83 0.51 0.76 1.00

Table 3 provides correlation matrix for developing economies. The correlation between
CO2 emissions and different measures of ICT is positive. It is noteworthy that correlation
between ICT measures and CO2 emissions is negative in the case of developed
economies, while it turns out to be positive in the case of developing economies. A
simple correlation analysis substantiates our prior expectation that the relationship of ICT
with environmental degradation is not homogenous in developed and developing
countries.
Table 3: Correlation Matrix for Developing Countries
CO2 Y FF UP EU FTS FBS TCI OSI EGI ICT

CO2 1

Y 0.81 1

FF 0.86 0.67 1

UP 0.21 0.06 0.17 1

EU -0.13 -0.49 -0.40 0.07 1

FTS 0.70 0.67 0.53 0.08 -0.09 1

FBS 0.40 0.43 0.27 0.08 -0.07 0.56 1

TCI 0.66 0.74 0.48 0.09 -0.19 0.75 0.70 1

OSI 0.48 0.48 0.46 0.40 -0.25 0.39 0.25 0.46 1

EGI 0.71 0.72 0.62 0.24 -0.28 0.64 0.45 0.72 0.83 1
ICT 0.50 0.56 0.39 0.08 -0.23 0.57 0.77 0.81 0.37 0.58 1

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5. Results and Discussion

Table 4 presents empirical results for ICT and CO2 using Pooled OLS regression. The
results suggest that ICT inversely affects environmental degradation. Column 2 shows
that the parameter estimate (-0.0076) on fixed telephone subscriptions is negative and
significant at one percent level of significance. This finding is consistent with
Lashkarizadeh and Salatin (2012).
Similarly, columns 3 and 4 show the impact of fixed broadband subscriptions (-0.0032)
and telecommunication infrastructure index (-0.392) on CO2 emissions. Both measures
enter with negative and significant signs implying that ICT in the form of broadband and
telecommunication infrastructure helps to reduce CO2 emissions. Fixed broadband
subscription increases awareness about the environment, thereby preserving the
environment. Telecommunication facilitates video and voice conferencing instead of in
person communication. Consequently, use of vehicles decreases substantially and the
burden on environment alleviates in developed countries.
Column 5 presents the impact of online service index (-0.230) on CO2 emissions. This
measure of ICT also causes a negative and significant impact on CO 2 emissions.
Increasing utilization of online services reduces the visits on shops and movement of
vehicles, thereby lessening the burden on environment. In column 6 e-government,
another measure of ICT, causes a negative and significant impact (-0.209) on CO2
emissions. The adoptions and utilization of ICT infrastructure in public sector improves
the efficiency of government (Majeed and Malik, 2016a, 2016b). Moreover, ICT
applications in public sector improve management of government for monitoring of
environmental related activities such as water consumption, production, manufacturing,
and other activities. Finally column 7 shows the results for PCA measure of ICT and CO2
emissions. The parameter estimate on ICT index (-0.0443) also validates the argument
that ICT supports environmental sustainability in the case of developed countries.

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Table 4: Pooled OLS Results of CO2 Emissions and ICT in Developed Countries
(1) (2) (3) (4) (5) (6)
Variables CO2 CO2 CO2 CO2 CO2 CO2

Log Y 1.158*** 1.528*** 1.282*** 1.395*** 1.392*** 1.547***

(0.0586) (0.0787) (0.123) (0.108) (0.112) (0.0810)

2 -0.0244*** -0.0511*** -0.0342*** -0.0422*** -0.0420*** -0.0519***
Log Y
(0.00367) (0.00457) (0.00780) (0.00650) (0.00685) (0.00473)

Fossil Fuel 1.017*** 1.050*** 1.083*** 1.088*** 1.088*** 1.037***

(0.0119) (0.0196) (0.0266) (0.0265) (0.0266) (0.0201)

Urbanization 0.00680* -0.00236 0.00683 0.00806 0.00531 0.00201

(0.00383) (0.00520) (0.00756) (0.00760) (0.00756) (0.00535)

Energy 0.919*** 0.959*** 1.001*** 1.003*** 1.004*** 0.965***

(0.0122) (0.0191) (0.0270) (0.0270) (0.0272) (0.0194)

Telephone Subs -0.00769***

(0.000644)

Broadband Subs -0.00317***

(0.00115)

Tele. Infrastructure -0.392***

(0.121)

Online Service -0.230***

(0.0734)

E-government -0.209**

(0.0817)

ICT -0.0443**

(0.0179)

Constant -15.59*** -17.03*** -16.62*** -17.06*** -17.01*** -17.18***

(0.244) (0.348) (0.501) (0.460) (0.469) (0.355)

Observations 2,694 1,269 598 598 598 1,225

R-squared 0.960 0.953 0.963 0.963 0.963 0.953

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1
Empirical findings on different indicators of ICT are consistent with the studies which
consider ICT as an important determinant of environmental sustainability (Yi and
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 ICT and Environmental Sustainability

Thomas, 2007; Houghton, 2015; Bekaroo et al., 2016; Gonel and Akinci, 2018). The
direction of effect (negative) is consistent with the studies which consider ICT
developments as favorable for environmental sustainability (Zhang and Liu, 2015; Ozcan
and Apergis, 2018; Lu, 2018). The studies which doubt the environmental friendly effects
of ICT are not supported with the empirical findings for developed economies (Widmer
et al., 2005; Liu et al., 2006; Osibanjo and Nnorom, 2007).
The parameter estimates on selected control variables Y (1.158), Y2 (-0.0244), fossil fuel
(1.017), urbanization (0.007), and energy (0.919) are consistent with the earlier findings
of the literature. The impact of GDP in a linear specification is positive while it turns out
to be negative in a non-linear specification. It implies that environmental Kuznets curve
holds which is broadly consistent with the earlier findings of the studies. The impact of
fossil fuels is positive and significant in all regressions.
Urbanization creates environmental burden as vehicles such as cars and buses are
intensively used in urban areas which create pollution (Cole and Neumayer, 2004).
Energy use causes positive and significant impact on CO2 emissions in all models.
Increasing human activities and greater use of energy cause more pressure on
environment (Ang, 2007). R2 values of all regressions are greater than 0.90 implying that
more than 90% variation in model is explained by the independent variables.
Table 5 presents results for developing economies. It is noteworthy that none of the ICT
measures is helping to reduce environmental degradation. Thus empirical estimates
confirm heterogeneous outcomes of ICT in developed and developing economies. The
results broadly suggest that ICT positively affects environmental degradation. Column 2
shows that the parameter estimate on fixed telephone subscriptions (0.0018) is positive
and significant at 5 percent level of significance. It implies that ICT in the form of fixed
telephone subscription causes unfavorable effects on environment in the case of
developing countries.
Similarly, column 2 shows the positive and significant impact of fixed broadband
subscriptions on CO2 emissions. Other measures of ICT are also indicating positive
impact on environmental degradation. Though other measures are positive but their effect
is statistically insignificant. However, their joint effect is positive and significant as it is
evident from column 7 where PCA measure of ICT is causing positive and significant
impact on CO2 emissions. Developing countries lack the capacity to take the full
advantage of ICT. Moreover, e-waste is poorly managed in developing countries.

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Table 5: Pooled OLS Results of CO2 Emissions and ICT in Developing Countries
Variables (1) (2) (3) (4) (5) (6)
CO2 CO2 CO2 CO2 CO2 CO2

Log Y 1.442*** 1.529*** 1.474*** 1.483*** 1.434*** 1.555***

(0.0574) (0.0799) (0.118) (0.112) (0.116) (0.0797)

2 -0.0470*** -0.0519*** -0.0491*** -0.0496*** -0.0463*** -0.0542***
Log Y
(0.00337) (0.00457) (0.00687) (0.00656) (0.00691) (0.00448)

Fossil Fuel 1.022*** 1.055*** 1.093*** 1.092*** 1.091*** 1.042***

(0.0124) (0.0195) (0.0267) (0.0267) (0.0266) (0.0198)

Urbanization 0.00294 -0.00374 0.00457 0.00400 0.00293 0.00126

(0.00392) (0.00520) (0.00767) (0.00801) (0.00778) (0.00533)

Energy 0.903*** 0.960*** 0.997*** 0.998*** 0.998*** 0.960***

(0.0127) (0.0191) (0.0273) (0.0272) (0.0272) (0.0195)

Telephone Subs 0.00187**

(0.000884)

Broadband Subs 0.00773**

(0.00357)

Tele. Infrastructure 0.0933

(0.193)

Online Service 0.0327

(0.0781)

E-government 0.110

(0.0863)

ICT 0.0700***

(0.0260)

Constant -16.35*** -17.02*** -17.21*** -17.25*** -17.07*** -17.05***

(0.258) (0.354) (0.511) (0.489) (0.495) (0.367)

Observations 2,694 1,269 598 598 598 1,225

R-squared 0.958 0.953 0.962 0.962 0.962 0.953

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

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 ICT and Environmental Sustainability

Empirical findings on different indicators of ICT are consistent with the studies which
consider ICT developments as unfavorable for environment sustainability (Widmer et al.,
2005; Liu et al., 2006; Osibanjo and Nnorom, 2007). In the case of developing
economies, the direction of effect (positive) is inconsistent with the studies which
consider ICT developments as favorable for environmental sustainability (Zhang and Liu,
2015; Ozcan and Apergis, 2018; Lu, 2018).
Empirical results obtained using POLS become biased in the presence of endogeneity and
heterogeneity. The problem of endogeneity is likely to prevail in our model because
whereas ICT infrastructure influences environmental degradation, more degradation in
the form of dust, smoke can also damage electronic equipment. Similarly, the chosen
sample is cross-country and the issue of heterogeneity can also give the biased results. To
address these issues, an alternative estimation technique Generalized Method of Moments
(GMM) is used. GMM provides efficient and consistent results in the presence of
heterogeneity and endogeneity. To assess the validity of instruments we apply the test of
over identification.
Table 6 provides the results estimated using GMM. The baseline results remain same as
all ICT measures significantly and negatively reduce CO2 emissions in developed
economies. Thus development of ICT infrastructure in developed economies is a
potential source of mitigating environmental degradation. Moreover, findings also
confirm the presence of EKC. A large number of studies have confirmed the presence of
EKC (Grossman and Kruger, 1991; Selden and Song, 1994).

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Table 6: GMM Results of CO2 Emissions and ICT for Developed Economies
(1) (2) (3) (4) (5) (6)
VARIABLES CO2 CO2 CO2 CO2 CO2 CO2
Log Y 1.041*** 1.386*** 0.832** 1.088*** 1.055*** 1.418***

(0.0890) (0.140) (0.325) (0.232) (0.258) (0.147)

Log Y2 -0.0175*** -0.0427*** -0.00539 -0.0232 -0.0208 -0.0441***

(0.00558) (0.00815) (0.0212) (0.0146) (0.0166) (0.00867)

Fossil Fuel 1.043*** 1.087*** 1.117*** 1.120*** 1.123*** 1.066***

(0.0182) (0.0330) (0.0467) (0.0456) (0.0470) (0.0331)

Urbanization 0.0128*** 0.00198 0.0169* 0.0158* 0.0124 0.00742

(0.00350) (0.00517) (0.00951) (0.00916) (0.00901) (0.00532)

Energy 0.921*** 0.956*** 0.983*** 0.987*** 0.990*** 0.967***

(0.0128) (0.0181) (0.0342) (0.0337) (0.0336) (0.0181)

Telephone Subs -0.00815***

(0.000799)

Broadband Subs -0.00498***

(0.00156)

Tele. Infrastructure -0.718**

(0.305)

Online Service -0.340**

(0.155)

E-government -0.351**

(0.179)

ICT -0.0783***

(0.0269)

Hansen's J chi2 0.567945 0.021771 0.679081 0.012277 0.400191 1.7746

(p = 0.4511) (p = 0.8827) (p = 0.4099) (p = 0.9118) (p = 0.5270) (p = 0.1828)

Constant -15.32*** -16.66*** -15.11*** -16.03*** -15.89*** -16.88***

(0.326) (0.511) (1.116) (0.809) (0.899) (0.533)

Observations 2,690 1,131 241 241 241 1,084

R-squared 0.960 0.951 0.966 0.966 0.966 0.951

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1
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 ICT and Environmental Sustainability

The impact of fossil fuel on CO2 emissions is positive and significant. Sharma (2011)
argues that an increase in burning of fossil fuels used in transportations causes more CO2
emissions, thereby deteriorating the environment. Urbanization creates environmental
burden as vehicles such as cars, buses and others are intensively used in urban areas
creating pollution (Cole and Neumayer, 2004).
Energy use also adversely affects climate degradation. Many scholars point out that
energy use causes environmental degradation (Ang, 2007; Apergis and Payne, 2009;
Dogan and Turkekul, 2016). R2 values of all regressions are greater than 0.90 implying
that more than 90% variation in model explained by the independent variables. P-values
of Hansen‟s J test indicate that instruments are valid. Therefore, the empirical results are
not suffering from the problem of endogeneity.

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Table 7: GMM Results of CO2 Emissions and ICT for Developing Economies
(1) (2) (3) (4) (5) (6)
VARIABLES CO2 CO2 CO2 CO2 CO2 CO2
Log Y 1.352*** 1.401*** 1.201*** 1.230*** 1.175*** 1.542***
(0.0794) (0.132) (0.253) (0.235) (0.257) (0.217)
2 -0.0420*** -0.0449*** -0.0335** -0.0354** -0.0316** -0.0531***
Log Y
(0.00458) (0.00743) (0.0147) (0.0138) (0.0154) (0.0102)

Fossil Fuel 1.045*** 1.100*** 1.134*** 1.139*** 1.133*** 1.058***

(0.0182) (0.0341) (0.0506) (0.0499) (0.0487) (0.0293)

Urbanization 0.00985*** 0.000809 0.0125 0.0150 0.0109 0.00751

(0.00355) (0.00501) (0.00888) (0.0106) (0.00951) (0.00518)

Energy 0.906*** 0.960*** 0.979*** 0.980*** 0.979*** 0.958***

(0.0132) (0.0177) (0.0360) (0.0353) (0.0353) (0.0231)

Telephone Subs 0.00232***

(0.000770)

Broadband Subs 0.00894***

(0.00278)

Tele. 0.0856
Infrastructure
(0.343)

Online Service -0.0475

(0.116)

E-government 0.0795

(0.153)

ICT 0.0289
(0.187)

Hansen's J chi2 0.567945 0.021771 0.679081 0.012277 0.400191 1.7746

(p = 0.4511) (p = 0.8827) (p = 0.4099) (p = 0.9118) (p = 0.5270) (p = 0.1828)
Constant -16.19*** -16.71*** -16.28*** -16.43*** -16.17*** -17.19***
(0.317) (0.493) (0.981) (0.927) (0.980) (1.153)

Observations 2,690 1,131 241 241 241 1,222

R-squared 0.958 0.951 0.965 0.965 0.965 0.953

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1
Table 7 provides empirical results of CO2 emissions and ICT for developing countries.
The findings on the presence of EKC and control variables are similar to developed
economies. That is, EKC holds in developing economies whereas fossil fuel, urbanization
and energy use are contributing in environmental degradation. However, the usage of ICT
as a vehicle to control environmental degradation is not substantiated in developing
economies. Furthermore, some of ICT measures such as fixed telephones subscriptions,
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 ICT and Environmental Sustainability

fixed broadband subscription are contributing significantly in environmental degradation

rather than reducing it.
6. Conclusion
In recent decades technological advancements have significantly contributed in economic
growth. However, increasing use of technology in the production process also raises
greenhouse gases that create pollution and consequently deteriorate the quality of
environment. Whereas growing production of ICT has also contributed into the
ecological burden of this planet, it also has the ability to alleviate the burden on
environment through increasing awareness and adoption of “Green ICT” that is usage of
smart technology and tools.
Theoretically environmental effects of ICT are ambiguous. This study uses a large panel
data set of 132 developed and developing countries and conducts a comparative empirical
analysis. The analysis is based on OLS and GMM econometric techniques of estimations.
Moreover, the issue of potential problem of endogeneity is addressed.
The empirical analysis shows that ICT can reduce environmental degradation but only in
the case of developed economies. In the case of developing economies the role of ICT is
either environmental damaging or insignificant. These findings are shown to be robust to
various robustness checks. This study concludes that ICT has the potential to protect the
environment form degradation. However, this effect is limited to only developed
countries.
6.1 Contribution of the Study
The relationship of ICT with environment sustainability is an emerging field of research.
The extant literature in this field is limited to qualitative and descriptive studies. Secondly
empirical analysis is limited to a country specific or regional analysis. Thirdly, the
literature generally focused on developed economies ignoring developing economies.
Fourthly, the available empirical studies measured information communication
technology with a single dimension such as internet usage which cannot be generalized
for other dimensions of ICT. Considering these gaps in the literature on ICT and
environment, this study contributes in a number of ways. Firstly, this study identifies the
heterogeneous effects of ICT on environment in developed and developing countries.
Secondly, this study uses diverse and novel measure of ICT rather than restricting the
analysis to a single measure of ICT. Thirdly, this study provides global evidence using a
large set of developed and developing countries over a long period of time. Fourthly, this
study addresses the issue of endogeneity. Finally, this study utilizes alternative
econometric techniques to provide better empirical estimates and conducts robustness
analysis to assess the soundness of data, variables and empirical findings.
6.2 Heterogeneous Effects of ICT on Environment Sustainability
The comparative empirical analysis offers diverse effects of ICT on environment
sustainability. The environmental effects of ICT are not mapped in a unique way. ICT has
a potential to sustain the environment only in the case of developed countries. In contrast,
ICT causes adverse effects on environment in the case of developing countries.
All measures of ICT cause negative and significant effect on carbon emissions in
developed countries. However, comparatively the effect of telecommunication
infrastructure and online service index is stronger as compared to other indicators of ICT.

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Thus developed countries can sustain their environment by investing more in

telecommunication infrastructure and in online services. Empirical findings suggest that
all measures of ICT are positively associated with environmental degradation in
developing countries. However, a comparative analysis indicates that the effect of fixed
telephone subscription and broadband is important.
6.3 Limitations of the Study
This study has certain limitations. First, the data of many developing countries was
missing. Second, this study uses only one dimension of environment that is carbon
emissions. Third, panel Granger causality analysis is not conducted in this study. Fourth,
heterogeneity of developed and developing countries is analyzed while the heterogeneity
within the group of developed and developing countries is not investigated.
6.4 Theoretical/Policy Implications
Environmentalists and economists have developed various theories, such as Kuznets
Curve and Pollution Hypothesis, to understand the relationship of economic activities
with environmental sustainability. However, little attention has been paid to ICT and
environmental sustainability nexus. The literature offers Greening ICT and Greening
through ICT hypotheses to understand the links of ICT with ecosystem. Theoretical and
empirical literature predicts conflicting effects of ICT on ecosystem. A comprehensive
analysis of this study shows that the ICT-environment nexus sustainability differs
between developed and developing countries. These are the developed countries which
are gaining more from ICT in terms of environment sustainability. In contrast,
environment sustainability is compromised with the increasing use of ICT in developing
countries.
This study offers different policy implications for developed and developing countries.
ICT supporting policies can help to improve the quality of environment in developed
economies. In this regard research and development expenditures can be increased to
foster the growth of ICT infrastructure. Moreover, implementation of ICT infrastructure
in public sector can substantially alleviate environmental degradation. The governments
of developing countries need to decouple economic growth from environmental
degradation. In developing countries, appropriate polices need to be designed to manage
e-waste.
6.5 Directions for Future Research
This study can be extended in many ways. For example, this research utilizes levels of
carbon emissions to proxy environment sustainability whereas future research can utilize
other greenhouse gases such as nitrous oxide, methane and fluorinated gases. Future
research can also explore the scope of other emerging technologies such as internet of
things, artificial intelligence and robots. In addition, future studies can conduct a
comparative regional analysis of ICT and environment to discover the ICT role in
different demographic and other economic conditions around the world. The role of
income levels can be analyzed for better understanding of ICT and environment
sustainability. Future research needs to focus more on the potential causes which
undermine the strength of ICT to safeguard the environment in developing economies.

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Appendix
Table A1: Estimation for Sub-samples of Developed Countries
(1) (2) (3) (4) (5) (6)

VARIABLES CO2 CO2 CO2 CO2 CO2 CO2

Log Y 1.682*** 0.687 0.512 0.281 0.317 0.697
(0.361) (0.656) (1.021) (1.056) (1.020) (0.667)
2
Log Y -0.0503*** -0.00843 0.00869 0.0122 0.0144 -0.00807
(0.0184) (0.0329) (0.0513) (0.0531) (0.0513) (0.0335)

Fossil Fuel 0.839*** 0.952*** 0.775*** 0.923*** 0.822*** 0.926***

(0.0328) (0.0451) (0.0772) (0.0706) (0.0727) (0.0473)

Urbanization -0.0271*** -0.0472*** -0.0169 -0.0195 -0.00447 -0.0451***

(0.00589) (0.00858) (0.0145) (0.0161) (0.0155) (0.00896)

Energy 0.881*** 0.935*** 0.981*** 1.005*** 0.990*** 0.955***

(0.0232) (0.0368) (0.0613) (0.0633) (0.0612) (0.0373)

Telephone Subs -0.0120***

(0.000875)

Broadband Subs -0.00355***

(0.00134)

Tele. Infrastructure -0.993***

(0.212)

Online Service -0.337**

(0.133)

E-government -1.132***
(0.240)

ICT -0.0597***

(0.0212)

Constant -16.55*** -11.67*** -11.14** -10.18** -9.923** -11.82***

(1.711) (3.153) (4.877) (5.047) (4.874) (3.205)

Observations 970 549 220 220 220 525

R-squared 0.776 0.710 0.731 0.712 0.731 0.708

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

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 ICT and Environmental Sustainability

Table A2: Estimation for Sub-samples of Developing Countries

(1) (2) (3) (4) (5) (6)
VARIABLES CO2 CO2 CO2 CO2 CO2 CO2

Log Y 1.302*** 1.513*** 1.216*** 1.242*** 1.154*** 1.514***

(0.125) (0.182) (0.220) (0.220) (0.225) (0.180)
2
Log Y -0.0377*** -0.0530*** -0.0336** -0.0344** -0.0301** -0.0530***

(0.00839) (0.0121) (0.0147) (0.0146) (0.0148) (0.0119)

Fossil Fuel 1.021*** 1.082*** 1.133*** 1.136*** 1.132*** 1.065***

(0.0137) (0.0203) (0.0260) (0.0258) (0.0258) (0.0204)

Urbanization 0.0428*** 0.0418*** 0.0433*** 0.0498*** 0.0411*** 0.0481***

(0.00500) (0.00615) (0.00847) (0.00914) (0.00866) (0.00620)

Energy 0.875*** 0.922*** 0.953*** 0.955*** 0.949*** 0.919***

(0.0161) (0.0216) (0.0282) (0.0273) (0.0278) (0.0214)

Telephone Subs 0.00165

(0.00119)

Broadband Subs 0.00924***

(0.00345)

Tele. Infrastructure 0.0671

(0.241)

Online Service -0.148*

(0.0832)
E-government 0.155
(0.130)

ICT 0.0741***
(0.0229)

Constant -16.32*** -17.49*** -16.71*** -16.95*** -16.45*** -17.45***

(0.469) (0.684) (0.809) (0.815) (0.839) (0.677)

Observations 1,724 720 378 378 378 700

R-squared 0.951 0.958 0.969 0.969 0.969 0.960

Standard errors in parentheses

*** p<0.01, ** p<0.05, * p<0.1

782
 Majeed

Table A3: List of Developed Countries

Australia Finland Kuwait Saudi Arabia
Austria France Latvia Singapore
Bahrain Germany Lithuania Slovak Republic
Belgium Greece Luxembourg Slovenia
Brunei Darussalam Hong Kong Malta Spain
Canada Hungary Netherlands Sweden
Chile Iceland New Zealand Switzerland
Croatia Ireland Norway Trinidad and Tobago
Cyprus Israel Oman United Arab Emirates
Czech Republic Italy Poland United Kingdom
Denmark Japan Portugal United States
Estonia Korea, Rep. Qatar Uruguay

Table A4: List of Developing Countries

Albania Cuba Kyrgyz Republic Philippines
Algeria Dominican Rep. Lebanon Romania
Angola Ecuador Libya Russian Fed.
Armenia Egypt, Arab Rep. Macedonia, FYR Senegal
Azerbaijan El Salvador Malaysia Serbia
Bangladesh Eritrea Mauritius South Africa
Belarus Ethiopia Mexico Sri Lanka
Benin Gabon Moldova Sudan
Bolivia Georgia Mongolia Tajikistan
Bosnia Ghana Montenegro Tanzania
Botswana Guatemala Morocco Thailand
Brazil Haiti Mozambique Togo
Bulgaria Honduras Namibia Tunisia
Cambodia India Nepal Turkey
Cameroon Indonesia Nicaragua Ukraine
China Iran Niger Uzbekistan
Colombia Iraq Nigeria Venezuela
Congo, Dem. Rep. Jamaica Pakistan Vietnam
Congo, Rep. Jordan Panama Yemen
Costa Rica Kazakhstan Paraguay Zambia
Cote d'Ivoire Kenya Peru Zimbabwe

783
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