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ICT, carbon emissions, climate change, and energy demand nexus: the potential benefit of digitalization in Taiwan

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  • Adha, Rishan
  • Hong, Cheng-Yih
  • Agrawal, Somya
  • Li, Li-Hua

Abstract

The global rise in energy consumption makes managing energy demands a priority. Here, the potential of Information and Communication Technology (ICT) in controlling energy consumption is still debated. Within this context, the main objective of the current study is to measure the impact of ICT, its potential benefit, and environmental factors on household electricity demand in Taiwan. A panel of data from 20 cities in Taiwan was collected during the period 2004-2018. We adopted PMG estimation and applied the DH-causality test for analysis. The estimation results show that ICT, carbon emissions, and climate change will drive household electricity demand in Taiwan in the long term. However, ICT has a higher potential to reduce electricity demand in the short-term period. In addition, the results of the causality test reveal a two-way interrelationship between ICT and electricity demand. Our study also found that climate change indirectly affects the use of electricity through household appliances. We also presented several policy implications at the end of this paper.

Suggested Citation

  • Adha, Rishan & Hong, Cheng-Yih & Agrawal, Somya & Li, Li-Hua, 2021. "ICT, carbon emissions, climate change, and energy demand nexus: the potential benefit of digitalization in Taiwan," MPRA Paper 113009, University Library of Munich, Germany, revised 01 Feb 2022.
    • Handle: RePEc:pra:mprapa:113009
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    Cited by:

    1. Ying Yan & Ridwan Lanre Ibrahim & Mamdouh Abdulaziz Saleh Al-Faryan & David Mautin Oke, 2023. "Embracing Eco-Digitalization and Green Finance Policies for Sustainable Environment: Do the Engagements of Multinational Corporations Make or Mar the Target for Selected MENA Countries?," Sustainability, MDPI, vol. 15(15), pages 1-18, August.
    2. Melike E. Bildirici & Rui Alexandre Castanho & Fazıl Kayıkçı & Sema Yılmaz Genç, 2022. "ICT, Energy Intensity, and CO 2 Emission Nexus," Energies, MDPI, vol. 15(13), pages 1-15, June.
    3. Lin, Boqiang & Huang, Chenchen, 2023. "Nonlinear relationship between digitization and energy efficiency: Evidence from transnational panel data," Energy, Elsevier, vol. 276(C).

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    More about this item

    Keywords

    energy demand; ICT; carbon emissions; climate change; dynamic panel data model;
    All these keywords.

    JEL classification:

    • C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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