ICT-driven urbanization and energy security risk: Empirical evidence from Group 7 and Emerging 7 economies

Abstract

Information and Communication Technology (ICT) allows for real-time monitoring of energy consumption in urban areas. Energy security may be improved by optimizing energy usage, minimizing waste, and improving energy distribution via smart grids, energy management systems, and Internet of Things devices. Thus, this analysis inspects the linkage between ICT, smart urbanization, and energy security risks in Group7 and Emerging 7 economies by employing the Cross-sectionally Augmented ARDL of Chudik and Pesran (2015) for the period of 1995–2020. The results show that increased internet, telephone, and mobile usage help lower the energy security risk in Group 7 and Emerging 7 economies. In contrast, the rising urbanization causes the energy security risk to escalate in both groups of countries. On the other hand, ICT-driven smart urbanization mitigates energy security risk in both Group 7 and Emerging 7; however, these effects are stronger in Group 7 economies. The policymakers in the Group 7 economies should optimize the advantages of ICT-driven urbanization where modern infrastructure and urbanization are more common. On the other hand, policymakers in the Emerging 7 countries should progressively exploit ICT's promise for future energy security while addressing current energy availability and sustainability issues.