Does an Inverted U-shaped Relationship Exist between ICT and CO2 Emissions in China? Evidence from Unconditional Quantile Regression

Abstract

Information and communication technology (ICT) has experienced rapid development in recent decades, which exerts profound impacts on environmental sustainability. The positive and negative environmental impacts of ICT are widely debated. Some scholars point that some negative environmental impacts have arisen due to the production, use and disposal of ICT. While others consider that ICT has exerted favorable impacts on environmental sustainability by building smarter cities, transportation systems, electrical grids and industrial processes. These two effects are opposite, resulting in an inverted U-shaped relationship between ICT and CO2 emissions. The existing literature abound in the relationship between ICT and CO2 emissions in developed countries, but little attention has been paid to China. Therefore, the aim of this study is to investigate the non-linear relationship between ICT and CO2 emissions in China. Applying China’s urban panel data covering period 2004-2017 and employing unconditional quantile regression with fixed effect to estimate the benchmark model, we confirm the inverted U-shaped relationship between ICT and CO2 emissions at all quantiles. Considering the regional differences, there is an inverted U form between ICT and CO2 emissions at all quantiles for the eastern cities. Whereas, for non-eastern cities, the inverted U form only exists below the medium-high quantiles and does not exist at high quantiles. The findings not only contribute to the existing literatures, but also provide some policy implications to China and other developing countries.