How does ICT Diffusion and Renewable Energy Consumption affect CO2 Emissions?

Abstract

This study investigates the impact of renewable energy consumption (REC), information and communication technology (ICT), and gross domestic product (GDP) on CO2 emissions in Saudi Arabia over the period 1990-2020. Utilizing an ARDL (Autoregressive Distributed Lag) model, the results reveal that GDP exerts a positive and significant effect on emissions in both the short and long term, suggesting that economic growth is associated with higher emissions. In contrast, REC has a negative impact, indicating that increased renewable energy consumption contributes to reducing emissions over time. However, the negative effect of REC on emissions in the short term suggests that transitioning to renewable energy may involve initial costs or disruptions that temporarily affect emissions. ICT also shows a negative influence on emissions in the long term, but its short-term effects are less consistent, reflecting the potential environmental costs associated with rapid technological expansion, such as increased energy consumption and electronic waste. The interaction terms between GDP and REC, as well as GDP and ICT, reveal that higher levels of renewable energy and technological development moderate the positive relationship between GDP and emissions, highlighting the complex trade-offs between economic growth, energy transition, and technological advancement. The findings emphasize the importance of expanding renewable energy infrastructure and fostering sustainable technological innovation to mitigate emissions while sustaining economic growth in Saudi Arabia.