Asymmetric Effect of ICT Penetration, Urban Primacy, and Its Role in GHG Emissions and Renewable Energy Consumption in European Regions

Abstract

Two important policies have been discussed as ways to reduce dependency on fossil fuels: the promotion of renewable energy and the expansion of information and communication technology (ICT). Technological advancement reduces the cost of renewable energy, making the production of renewable energy more competitive. In this study, the nonlinear autoregressive distributed lag method is used to investigate the asymmetric impact of ICT on greenhouse gas emissions and renewable energy consumption, along with role of urban primacy in renewable energy use and reduction of greenhouse gas (GHG) emissions. Wavelet coherence analysis was also used to explore the lead-lag relationship for the entire sample, which consisted of four panel groups (based on similar economic dynamics) of European countries. The results show that ICT penetration has a significant asymmetric effect on renewable energy in the short term in all European regions. However, in the long run, this asymmetric effect is significant only in the southern region. The results imply that, in the short term, increases the use of ICT decrease greenhouse gas emissions in the western, southern and northern regions of Europe. Overall, the impact of ICT use on greenhouse gas emissions is greatest in the western region, followed by the southern and northern regions, indicating that European regions have varying circumstances, challenges and capacities to address climate change mitigation and achieve sustainable development. Effective decision-making and comprehensive strategies for resilient urban development which hold urban governments and businesses more accountable will play a crucial role in dealing with climate change.

Keywords: greenhouse gas emissions, urban primacy, ICT penetration, renewable energy