The impact of renewable energy, internet use and foreign direct investment on carbon dioxide emissions: A method of moments quantile analysis

The current era of industrial development and innovation is revolutionized using the internet, robotics, and artificial intelligence. Nevertheless, the appraisal of global economic progress shows increasing trends, there are environmental degradation issues associated with this improvement. The role of renewable energy, urbanization and foreign direct investment received a lot of attention in the literature on environmental issues, however, the simultaneity with information communication technology is missing. Therefore, the present study used data from 10 emerging countries during 1996-2015 and applied the novel Method of Moments Quantile Regression to analyze the nexus among the variables. Further, we applied the second-generation unit root test, and Driscoll Kraay standard errors to reach robust results. The findings revealed an inverted U-shape relationship between economic growth and environmental degradation; thus, the validity of the Environmental Kuznets Curve is revealed. Moreover, foreign direct investment is significant and positive at 0.05th-0.50th quantiles, however, it becomes insignificant at higher quantile levels. Urbanization enhances while renewable energy mitigates carbon dioxide emissions at all quantile levels. Information communication technology proxied by internet usage reduces environmental degradation significantly at 0.25th-0.95th quantile levels. Results of the study suggest insights for the policymakers to mitigate carbon dioxide emissions through encouraging renewable energy and internet use. (C) 2022 Elsevier Ltd. All rights reserved.

Automated summary

This study analyzes the relationship among economic growth, environmental degradation, and various factors such as foreign direct investment, urbanization, renewable energy, and information communication technology. The findings reveal an inverted U-shape relationship between economic growth and environmental degradation, supporting the validity of the Environmental Kuznets Curve. Foreign direct investment has a positive impact on economic growth at lower quantiles but becomes insignificant at higher quantiles. Urbanization promotes environmental degradation, while renewable energy mitigates carbon dioxide emissions. Information communication technology, represented by internet usage, significantly reduces environmental degradation.