The role of information and communication technology and financial development in shaping a low-carbon environment: a Belt and Road journey toward development

ABSTRACT In the era of globalization, information and communication technology (ICT) plays a crucial role in economic development and environmental sustainability. ICT enables economies to interact with each other around the globe, and the current fast ICT mode makes globalization a reality in today’s technological world. However, its abrupt rise in installation and operation may increase energy demand and environmental degradation. Thus, this study embarks upon the role of ICT and financial development in shaping a low-carbon environment for sixty Belt and Road Initiative (BRI) economies using balanced panel data spanning 1990–2018. This study adopts the Driscoll–Kraay standard error long-run estimation technique and the Dumitrescu–Hurlin panel causality approach. The results reveal that ICT, financial development, and globalization are negatively related to CO2 emissions; however, economic growth and electricity consumption stimulate CO2 emissions, threatening environmental sustainability. Interestingly, a U-shaped relationship is observed between economic growth and CO2 emissions for BRI economies. Moreover, the causality results reveal bidirectional causal relationships between ICT, financial development and globalization with CO2 emissions. The findings urge the adoption of advanced ICT in the industrial sector for efficient energy use and socioeconomic development.