What drives the relationship between digitalization and industrial energy demand? Exploring firm-level heterogeneity

Janna Axenbeck, Anne Berner and Thomas Kneib

No 22-059, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: The ongoing digital transformation has raised hopes for ICT-based climate protection within manufacturing industries, such as dematerialized products and energy efficiency gains. However, ICT also consume energy as well as resources, and detrimental effects on the environment are increasingly gaining attention. Accordingly, it is unclear whether trade-offs or synergies between the use of digital technologies and energy savings exist. Our analysis sheds light on the most important drivers of the relationship between ICT and energy use in manufacturing. We apply flexible tree-based machine learning to a German administrative panel data set including more than 25,000 firms. The results indicate firm-level heterogeneity, but suggest that digital technologies relate more frequently to an increase in energy use. Multiple characteristics, such as energy prices and firms' energy mix, explain differences in the effect.

Keywords: digital technologies; energy use; manufacturing; machine learning (search for similar items in EconPapers)
JEL-codes: C14 D22 L60 O33 Q40 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-big, nep-cmp, nep-ene, nep-ict and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:22059

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