Energy consumption, carbon dioxide emissions, information and communications technology, and gross domestic product in Iranian economic sectors: A panel causality analysis

Abstract

Abstract Information and communications technology (ICT) has different effects on energy consumption and carbon dioxide (CO2) emissions in economic sectors, nevertheless, sectoral analysis of ICT effects is not addressed in the previous literature, the novelty of this article is filling this gap. This study investigated the short- and long-run causality between energy consumption, gross domestic product (GDP), CO2 emissions, and ICT in Iranian economic sectors over 2002–2013. Dynamic ordinary least squares (DOLS) estimator was used to estimate the long-run relationships among the aforementioned variables. The empirical findings confirmed the presence of an environmental Kuznets curve in all the sectors, the positive effect of ICT on CO2 in the industrial sector, and the negative effect of ICT on CO2 emissions in the transportation and services sectors. The panel error correction model was employed to examine Granger causality between each pair of variables. ICT is the cause of energy consumption in the industry. Furthermore, the results suggested the existence of bidirectional short-run causality between ICT and CO2 in the industrial and transportation sectors and a unidirectional causal relationship between ICT and CO2 in the services sector. Finally, there is unidirectional long-run causality running from ICT, GDP, and energy consumption to CO2 emissions.