The carbon reduction effect of ICT: A perspective of factor substitution

Mei-Rui Zhong, Meng-Yuan Cao and Han Zou

Technological Forecasting and Social Change, 2022, vol. 181, issue C

Abstract: Information and communications technology (ICT) investment is beneficial for achieving economic growth within a low carbon system, as the substitution or complementation of ICT to energy offset increased carbon emissions. Based on Chinese provincial panel data during 2000-2018, we incorporate ICT capital as a separate factor to the trans-log production function and identify factor substitution to study ICT's carbon reduction effects. The results show that China's technical progress is more biased towards non-ICT capital, ICT capital and fossil energy, deviate from non-fossil energy and labor. The carbon reduction effect of ICT is manifest by its substitution with fossil energy (0.528) and complementation to non-fossil energy (-0.072), which is comprehensive improvement in both energy productivity and energy structure. Besides, the threshold model reveals an "N" curve carbon reduction effect of substitution elasticity between ICT and fossil energy, whereas it is the opposite for non-fossil energy, and the current substitution elasticities are both in the interval that undermines carbon reduction. This paper confirms ICT's potential in carbon reduction, while this potential is not amplified in production modes of most provinces, and future efforts are required for its suitable match with low carbon transformation.

Keywords: ICT; Carbon reduction; Biased technical progress; Factor substitution; Non-linear relationship; Low carbon transformation (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0040162522002797
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:181:y:2022:i:c:s0040162522002797

DOI: 10.1016/j.techfore.2022.121754

Access Statistics for this article

Technological Forecasting and Social Change is currently edited by Fred Phillips

More articles in Technological Forecasting and Social Change from Elsevier
Bibliographic data for series maintained by Catherine Liu ().