Do the digital economy and institutional quality help reduce consumption-based CO₂ emissions in OECD countries? Evidence from the MMQR analysis

Global warming poses an increasing threat due to rapid economic expansion and human activities. The digital economy emerges as a promising strategy for countries aiming to achieve carbon neutrality while sustaining economic performance. However, the relationship between the digital economy and institutional quality concerning consumption-based carbon emissions remains underexplored. This study investigates the impact of the digital economy and institutional quality on CBE in OECD countries from 2003 to 2024. The findings obtained from the Moments Quantile Regression technique indicate that both factors can significantly contribute to environmental sustainability by reducing CBE. Additionally, industrial upgrading can aid in emissions reduction. Factors such as the GDP, urbanization, and FDI are obstructing progress toward environmental sustainability. The study recommends strengthening digital infrastructure and providing institutional support for environmental sustainability.