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Electricity Consumption and Information and Communication Technology in the Next Eleven Emerging Economies

Author

Listed:
  • Munshi Naser Ibne Afzal

    (Department of Economics, Shahjalal University of Science & Technology, Sylhet, Bangladesh,)

  • Munshi Naser Ibne Afzal

    (School of Commerce, University of Southern Queensland, Toowoomba, Australia)

  • Jeff Gow

    (School of Commerce, University of Southern Queensland, Toowoomba, Australia)

  • Jeff Gow

    (Department of Agricultural Economics, Stellenbosch University, Stellenbosch, South Africa)

Abstract

In this study, the impact of information communication technologies (ICT) on electricity consumption in the next eleven (N-11) emerging economies over the period 1990-2014 is examined. This period coincides with high economic growth rates in those countries and associated rapidly increasing electricity consumption as well as the ICT revolution that saw the rapid uptake of new ICT by its peoples. Little has been published on the relationship between ICT and electricity consumption in the N-11 emerging economies. This paper examines the hypothesis that increased use of ICT increases electricity consumption. Secondly, how different measures of ICT affect electricity consumption and finally, what are the short-run and long run elasticities of electricity demand with respect to ICT in N-11 countries? The methods used included dynamic panel data models (mean group [MG], pool mean group [PMG], system generalized methods of moments) and show a positive and statistically significant relationship between ICT and electricity consumption where ICT is measured using internet connections, mobile phones or the import percentage of ICT goods of total imports. Long run ICT elasticities are smaller than income elasticities but because ICT growth rates are so much higher than economic growth rates, the impact of ICT on electricity consumption is greater than the impact of income on electricity consumption. Electricity demand projections in emerging economies, which do not include ICT as an explanatory variable, may underestimate actual electricity demand. This can lead to unplanned electricity shortages if actual electricity demand exceeds planned electricity demand. Thus, the paper gives policy recommendations based on the empirical results for the N-11 countries to address this problem

Suggested Citation

  • Munshi Naser Ibne Afzal & Munshi Naser Ibne Afzal & Jeff Gow & Jeff Gow, 2016. "Electricity Consumption and Information and Communication Technology in the Next Eleven Emerging Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 6(3), pages 381-388.
    • Handle: RePEc:eco:journ2:2016-03-3
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    2. Nchofoung, Tii N. & Asongu, Simplice A., 2022. "Effects of infrastructures on environmental quality contingent on trade openness and governance dynamics in Africa," Renewable Energy, Elsevier, vol. 189(C), pages 152-163.
    3. Pavitra Dhamija, 2020. "Economic Development and South Africa: 25 Years Analysis (1994 to 2019)," South African Journal of Economics, Economic Society of South Africa, vol. 88(3), pages 298-322, September.
    4. Kouton, Jeffrey, 2019. "Information Communication Technology development and energy demand in African countries," Energy, Elsevier, vol. 189(C).
    5. Oluwarotimi Ayokunnu Owolabi & Asa-Ruth Oboku Oku & Abidemi Alejo & Toun Ogunbiyi & Jeremiah Ifeanyi Ubah, 2021. "Access to Electricity, Information and Communications Technology (ICT), and Financial Development: Evidence From West Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 11(2), pages 247-259.
    6. Noubissi Domguia, Edmond & Asongu, Simplice, 2022. "ICT and agriculture in Sub-Saharan Africa: effects and transmission channels," MPRA Paper 119055, University Library of Munich, Germany.
    7. Taha Zaghdoudi, 2017. "Internet usage, renewable energy, electricity consumption and economic growth : Evidence from developed countries," Economics Bulletin, AccessEcon, vol. 37(3), pages 1612-1619.
    8. Favour Chidinma Onuoha & Benedict I. Uzoechina & Chukwunenye Ferguson Emekaraonye & Onyinye Ifeoma Ochuba & Nora Francis Inyang, 2023. "Information and communication technologies and sustainable development in ECOWAS subregion: Evidence from a panel cointegration analysis," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(2), pages 787-806, March.
    9. Briglauer, Wolfgang & Köppl-Turyna, Monika, 2021. "Die Auswirkung der Digitalisierung auf CO2-Emissionen: Theoretische Einzeleffekte und empirische Abschätzung des Gesamteffekts," Policy Notes 46, EcoAustria – Institute for Economic Research.
    10. Magazzino, Cosimo & Mele, Marco & Morelli, Giovanna & Schneider, Nicolas, 2021. "The nexus between information technology and environmental pollution: Application of a new machine learning algorithm to OECD countries," Utilities Policy, Elsevier, vol. 72(C).
    11. Max Freidin & Dmitry Burakov, 2018. "Economic Growth, Electricity Consumption and Internet Usage Nexus: Evidence from a Panel of Commonwealth of Independent States," International Journal of Energy Economics and Policy, Econjournals, vol. 8(5), pages 267-272.
    12. Avom, Désiré & Nkengfack, Hilaire & Fotio, Hervé Kaffo & Totouom, Armand, 2020. "ICT and environmental quality in Sub-Saharan Africa: Effects and transmission channels," Technological Forecasting and Social Change, Elsevier, vol. 155(C).
    13. Bester Chimbo, 2020. "Information and Communication Technology and Electricity Consumption in Transitional Economies," International Journal of Energy Economics and Policy, Econjournals, vol. 10(3), pages 296-302.
    14. Amaluddin Amaluddin, 2020. "The Dynamic Link of Electricity Consumption, Internet Access and Economic Growth in 33 Provinces of Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 10(4), pages 309-317.
    15. Amal Dabbous, 2018. "The Impact of Information and Communication Technology and Financial Development on Energy Consumption: A Dynamic Heterogeneous Panel Analysis for MENA Countries," International Journal of Energy Economics and Policy, Econjournals, vol. 8(4), pages 70-76.
    16. Lange, Steffen & Pohl, Johanna & Santarius, Tilman, 2020. "Digitalization and energy consumption. Does ICT reduce energy demand?," Ecological Economics, Elsevier, vol. 176(C).

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    More about this item

    Keywords

    Next Eleven Countries; ICT; Electricity Consumption; Panel Data; Mean Group Estimation; Pool Mean Group Estimation; System Gneralized Methods of Moments;
    All these keywords.

    JEL classification:

    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development
    • N17 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Africa; Oceania
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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