ICT, carbon emissions, climate change, and energy demand nexus: The potential benefit of digitalization in Taiwan

Abstract

The global rise in energy consumption makes managing energy demands a priority. Here, the potential of Information and Communication Technology (ICT) in controlling energy consumption is still debated. Within this context, the main objective of the current study is to measure the impact of ICT, its potential benefit, and environmental factors on household electricity demand in Taiwan. A panel of data from 20 cities in Taiwan was collected during the period 2004–2018. We adopted PMG estimation and applied the DH-causality test for analysis. The estimation results show that ICT, carbon emissions, and climate change will drive household electricity demand in Taiwan in the long term. However, ICT has a higher potential to reduce electricity demand in the short-term period. In addition, the results of the causality test reveal a two-way interrelationship between ICT and electricity demand. Our study also found that climate change indirectly affects the use of electricity through household appliances. We also presented several policy implications at the end of this paper.