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Carbon reduction through renewable energy and digitalization in emerging economies: Moderating role of public debt

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Abstract  

Utilizing renewable energy (RE) and embracing the digital economy (DIG) can significantly contribute to achieving economic, energy, and climate goals by promoting carbon reduction. In this regard, public debt (DEB) is particularly important since it provides the funds required to achieve these goals by investing in renewable energy and digital economy projects. This study examines the impact of public debt on the link between renewable energy and carbon emissions (CE), as well as the association between the digital economy and carbon emissions in emerging economies from 2003 to 2022. The study employed cross-sectional augmented autoregressive distributed lag (CS-ARDL) estimation to check the relationship between the variables. The findings of our study suggest that the integration of renewable energy sources and the growth of the digital economy have a positive impact on reducing carbon emissions. On the other hand, public debt has a positive effect on carbon emissions. In addition, the findings support the notion that interaction terms (RE × DEB) and (DIG × DEB) have a diminishing effect on carbon emissions. It can be concluded that the reduction of carbon emissions is contingent upon the utilization of public debt to promote the growth of renewable energy and the digital economy. Based on our study, it is recommended that emerging economies’ needs focus on boosting renewable energy usage and digital economy initiatives. Additionally, it is necessary for these economies to maintain a sustainable level of debt.

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Notes

  1. Global Financial Stability Report, October 2022: Navigating the High-Inflation Environment (imf.org).

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Funding

The Key Project of Philosophy and Social Science Research in Colleges and Universities in Jiangsu Province (Grant: 2021SJZDA139).

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Authors and Affiliations

  1. School of Finance and Economics, Jiangsu University, Zhenjiang, PR China

    Qamar Abbas, Yao Hong**ng & Muhammad Ramzan

  2. Institute of Higher Education, Nankai University, Tian**, PR China

    Sumbal Fatima

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  1. Qamar Abbas
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  2. Yao Hong**ng
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  3. Muhammad Ramzan
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  4. Sumbal Fatima
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Contributions

The present manuscript was initially envisaged by Qamar Abbas and was subsequently expanded upon by the other co-authors. Muhammad Ramzan made valuable contributions to the study’s conceptualization, provided assistance in the acquisition of data, and performed formal analyses. Prof. Yao Hongxing assisted with the obtaining of funds and the selection of suitable methodologies for the manuscript. Sumbal Fatima made contributions to the manuscript writing, evaluation, and revision.

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Correspondence to Yao Hong**ng.

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Abbas, Q., Hong**ng, Y., Ramzan, M. et al. Carbon reduction through renewable energy and digitalization in emerging economies: Moderating role of public debt. Environ Sci Pollut Res (2024). https://doi.org/10.1007/s11356-024-33873-y

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