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From twin transition to twice the burden? Digitalisation, energy demand, and economic growth

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  • Hambye-Verbrugghen, Jérôme
  • Bianchini, Stefano
  • Brockway, Paul E.
  • Aramendia, Emmanuel
  • Heun, Matthew K.
  • Marshall, Zeke

Abstract

This paper evaluates the potential of digitalisation to drive structural transformations towards a sustainable economy. We apply an index decomposition analysis (IDA) to understand the factors influencing energy demand in a panel of 31 high-income countries (1971–2019). The IDA framework includes four factors related to the scale and sectoral composition of the economy and technical improvements, accounting for the quality of energy flows and actual work potential through useful exergy measures. We apply the model at the sector level across 16 productive industries to explore cross-sector heterogeneity in energy demand, and then compare results across digitial intensity categories. We find that value added growth is the primary driver of energy use. While digitalisation alone does not fully explain trends in energy demand, it is strongly associated with value added growth in high digital intensity sectors and amplifies the use of energy. Left ungoverned, digitalisation risks intensifying economic–ecological tensions, but if steered towards socio-ecological priorities—while addressing the environmental costs of growth—it holds potential to deliver real benefits. We discuss these findings in the context of recent policy actions promoting the “twin” green and digital transition.

Suggested Citation

  • Hambye-Verbrugghen, Jérôme & Bianchini, Stefano & Brockway, Paul E. & Aramendia, Emmanuel & Heun, Matthew K. & Marshall, Zeke, 2026. "From twin transition to twice the burden? Digitalisation, energy demand, and economic growth," Ecological Economics, Elsevier, vol. 239(C).
    • Handle: RePEc:eee:ecolec:v:239:y:2026:i:c:s0921800925002307
    DOI: 10.1016/j.ecolecon.2025.108747
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    Keywords

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    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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