Quantifying the role of digitalization, social factors and energy transition to achieve sustainability in East Asia

Abstract

Digital transformation plays a vital role in pollution reduction by driving a transition to a low-carbon economy. Its contribution to overall environmental sustainability can be realized when the different economic players and the general population cooperate and interact with digital technologies. This study investigated the influence of digitalization, social factors, energy transition, and population density on sustainable development. This study employed cutting edge econometric methods, including panel cointegration tests and fully modified ordinary least squares (FMOLS) analysis while collecting data from East Asian nations from 1995 to 2022. The study findings show that digitalization (β = 0.2315, p < 0.01) has the significant direct impact on sustainable development in East Asia, followed by social factors (β = 0.766, p < 0.10) and renewable energy transition (β = 0.048, p < 0.01). Notably, the interaction terms (DIG*ET) and (SF*POP) have significant positive impact on sustainable development. Population density also increases the sustainable returns of social investments, implying the crucial role of urban-focused human capital development. But negative time trend suggests decreasing returns to scale, both perhaps indicating the importance of ongoing innovation. These results support the necessity of well-integrated policies that simultaneously integrate digital infrastructure, education-health enhancement, and renewable energy transition to promote sustainable growth for EA. There is a pressing need for policymakers in cities to focus on digital-green synergies, especially in high-density areas, in order to trigger the maximum sustainability benefits.