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ICT and the demand for energy: Evidence from OECD countries

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  • Rexhaeuser, Sascha
  • Schulte, Patrick
  • Welsch, Heinz

Abstract

This paper analyzes the relationship between information and communication technology (ICT) and energy demand. We construct a comprehensive cross-country cross-industry panel data set covering 13 years, 10 OECD countries, and 27 industries. Using up to 2889 country-industry observations, we find that: (1) ICT capital is associated with a significant reduction in energy demand. (2) This relationship differs with regard to different types of energy. ICT use is not significantly correlated with electricity demand, but is significantly related to a reduction in non-electric energy demand. That is, ICT use comes with a reduction in total energy demand and an increase in the relative demand for electric over non-electric energy.

Suggested Citation

  • Rexhaeuser, Sascha & Schulte, Patrick & Welsch, Heinz, 2013. "ICT and the demand for energy: Evidence from OECD countries," ZEW Discussion Papers 13-116, ZEW - Leibniz Centre for European Economic Research.
  • Handle: RePEc:zbw:zewdip:13116
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    2. 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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    5. Nadia Hanif & Noman Arshed & Osama Aziz, 2020. "On interaction of the energy: Human capital Kuznets curve? A case for technology innovation," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 22(8), pages 7559-7586, December.
    6. Axenbeck, Janna & Berner, Anne & Kneib, Thomas, 2022. "What drives the relationship between digitalization and industrial energy demand? Exploring firm-level heterogeneity," ZEW Discussion Papers 22-059, ZEW - Leibniz Centre for European Economic Research.
    7. Grazia Cecere & Sascha Rexhäuser & Patrick Schulte, 2019. "From less promising to green? Technological opportunities and their role in (green) ICT innovation," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 28(1), pages 45-63, January.
    8. Xue, Yan & Tang, Chang & Wu, Haitao & Liu, Jianmin & Hao, Yu, 2022. "The emerging driving force of energy consumption in China: Does digital economy development matter?," Energy Policy, Elsevier, vol. 165(C).
    9. 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.
    10. Sakiru Adebola Solarin & Muhammad Shahbaz & Habib Nawaz Khan & Radzuan Bin Razali, 2021. "ICT, Financial Development, Economic Growth and Electricity Consumption: New Evidence from Malaysia," Global Business Review, International Management Institute, vol. 22(4), pages 941-962, August.
    11. Oseghale Baryl Ihayere & Philip Olasupo Alege & Obindah Gershon & Jeremiah Ogaga Ejemeyovwi & Praise Daramola, 2021. "Information Communication Technology Access and Use towards Energy Consumption in Selected Sub Saharan Africa," International Journal of Energy Economics and Policy, Econjournals, vol. 11(1), pages 471-477.
    12. Jie Zhou & Hanlin Lan & Cheng Zhao & Jianping Zhou, 2021. "Haze Pollution Levels, Spatial Spillover Influence, and Impacts of the Digital Economy: Empirical Evidence from China," Sustainability, MDPI, vol. 13(16), pages 1-18, August.
    13. Xu, Qiong & Zhong, Meirui & Li, Xin, 2022. "How does digitalization affect energy? International evidence," Energy Economics, Elsevier, vol. 107(C).
    14. Ahmadova, Gozal & Delgado-Márquez, Blanca L. & Pedauga, Luis E. & Leyva-de la Hiz, Dante I., 2022. "Too good to be true: The inverted U-shaped relationship between home-country digitalization and environmental performance," Ecological Economics, Elsevier, vol. 196(C).
    15. Amann, Juergen & Cantore, Nicola & Calí, Massimiliano & Todorov, Valentin & Cheng, Charles Fang Chin, 2021. "Switching it up: The effect of energy price reforms in Oman," World Development, Elsevier, vol. 142(C).
    16. Zhong, Mei-Rui & Cao, Meng-Yuan & Zou, Han, 2022. "The carbon reduction effect of ICT: A perspective of factor substitution," Technological Forecasting and Social Change, Elsevier, vol. 181(C).
    17. Theile, Philipp & Farag, Markos & Kopp, Thomas, 2022. "Does information substitute or complement energy? - A mediation analysis of their relationship in European economies," VfS Annual Conference 2022 (Basel): Big Data in Economics 264123, Verein für Socialpolitik / German Economic Association.
    18. Xianhong Xiang & Guoge Yang & Hui Sun, 2022. "The Impact of the Digital Economy on Low-Carbon, Inclusive Growth: Promoting or Restraining," Sustainability, MDPI, vol. 14(12), pages 1-27, June.
    19. Taneja, Shivani & Mandys, Filip, 2022. "The effect of disaggregated information and communication technologies on industrial energy demand," Renewable and Sustainable Energy Reviews, Elsevier, vol. 164(C).
    20. 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.

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    More about this item

    Keywords

    technical change; ICT; energy demand; energy efficiency; energy mix; Green IT; cross-country cross-industry data; environmental policy;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q41 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Demand and Supply; Prices
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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