Unlike past studies, this research makes a novel contribution by analyzing the dual environmental impact of artificial intelligence (AI), including both its direct effects and its indirect effects through economic growth, on the load capacity factor (LCF), a comprehensive proxy for environmental sustainability, controlling the influence of political globalization (POG), renewable energy (REN), and political corruption (PCR). Analyzing panel data from 1996 to 2021 for the 10 largest economies, the Method of Moments Quantile Regression (MM-QR) is employed to uncover heterogeneous impacts across the distribution. Furthermore, the Feasible Generalized Least Squares (FGLS), the Driscoll-Kraay (DK) standard errors, and the Panel Corrected Standard Errors (PCSEs) are employed for robustness. The empirical analysis reveals that AI directly reduces LCF across all quantiles, indicating that AI adoption hampers environmental sustainability. However, the moderating effects of AI on LCF through economic growth are positive, implying that AI, indirectly through economic growth, can contribute to environmental sustainability. Both PCR and POG contribute to environmental degradation, while the use of green energy augments the LCF with an increasing impact. Economic growth poses varying effects on the LCF at different percentiles. These findings provide critical insights for policymakers, offering a significant contribution to the sustainable development literature.
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