The Impacts of ICT and innovation on Carbon Dioxide Emissions in G20 Countries

The G20 countries collectively account for a substantial portion of global carbon dioxide (CO2) emissions, as they represent the world’s major economies and industrial powers. The continual growth in CO2 emissions exacerbates the greenhouse effect, which negatively influences the environment and ecosystems by raising temperatures, altering weather patterns, and increasing sea levels. To effectively address global climate action, it is imperative to tackle and reduce CO2 emissions in G20 nations. The objective of this study is to investigate the impacts of ICT and innovation on CO2 emissions in G20 countries. Using panel quantile regression, we analyze data spanning from the year 2000 to 2019 to derive meaningful results. The findings demonstrate a strong positive association between ICT and CO2 in nations that fall between the 10th and 40th quantiles. The countries with carbon dioxide emissions falling between the 30th and 90th quantiles also showed a strong positive correlation between patent applications and CO2. The conclusion of this study shows that innovation and ICT do not always reduce CO2, especially at levels of CO2 emission below the 40th quantile. As a result, depending on the country’s CO2 level, different ICT and innovation-related initiatives may have different effects on CO2. The novelty of this study reveals that the relationship between ICT, innovation, and CO2 emissions is underscored by varying levels of CO2 emissions.


Introduction
The fourth industrial revolution, which encompasses rapid changes and advancements in technology, industries, and societal patterns, is currently unfolding worldwide.Automation, robotization, and a heightened dependence on digital technology are among its defining characteristics, spanning across various industries such as logistics, services, production, and transportation [1].The proliferation of digitalization has notably contributed to economic growth, but it has also led to an upsurge in greenhouse gas emissions.Fossil fuel energy has significantly contributed to the increase in greenhouse gas emissions over time, primarily in meeting the energy demands of emerging countries.With fossil fuels such as natural gas, coal, and oil as energy sources, they are widely considered as the primary drivers of global carbon dioxide (CO2) emissions.Consequently, this rise in emissions has led to a rapid increase in sea levels, accelerated melting of glaciers and ice sheets, and the occurrence of more frequent and severe droughts [2].In order to avert a global catastrophe, it is imperative that the world reduces emissions by 45%, as indicated by the United Nations Environment Programme (UNEP) Emissions Gap Report 2022 [3].The severe consequences of failing to do so jeopardize the lives of both human communities and natural wildlife, necessitating prompt action to tackle these issues.The Paris Agreement, which came into effect in 2015, was established to enhance efforts in addressing climate 1303 (2024) 012011 IOP Publishing doi:10.1088/1755-1315/1303/1/012011 2 change.Its objective is to limit global warming to well below 2 degrees Celsius, ideally striving for a target below 1.5 degrees [4].
The Sustainable Development Goals (SDGs) were unveiled by the United Nations also called for reduction of CO2.Six of the 17 SDGs are concerned with preserving the environment including directly or indirectly reducing the CO2.Examples are the SDG 7 on energy access, efficiency, and the promotion of renewable energy sources, and the SDG 13 to combat climate change.SDG 14 and SDG 15 aims for resources and ecosystems sustainability, protection and restoring [5].Reduction of CO2 is an important factor in achieving all the mentioned SDG.Overall, these initiatives demonstrated that rising industrialization and economic development had also raised societal concern over environmental damage.
G20, which was founded in 1999 and consists of the EU and 19 other nations.The G20 accounts for two-thirds of the worldwide population, 80% of global Gross Domestic Product (GDP), and threequarters of global trade, making up a large chunk of the world's population.Additionally, more than 80% of all global material use and production is accounted for by G20 nations.Due to the G20's reliance on fossil, its CO2 emissions skyrocketed by 56% between 1990 and 2014, causing a significant increase in global emissions.The G20 countries are committed to collaborate on climate change mitigation through innovation, such as the switch from fossil fuels to renewable energy, to address the world's problems.The 2030 Agenda for Sustainable Development is also supported by the G20 countries [6].In 2030, it is anticipated that this shift will reduce CO2 emissions by 28% [7].Information and communication technology (ICT) and innovation are part of the strategies adopted to reduce environmental pollution.ICT could reduce pollution by ensuring smart grids and energy management which reduce reliance on fossil fuel-based energy and promotes the use of clean energy alternatives.Through the replacement or improvement of high-emission technologies, innovation can result in the creation and application of clean technologies that lower CO2 emissions.As illustrated in Table 1, CO2 emissions vary by country and some countries managed to reduce CO2 from 2000 to 2019 while some countries augmented the CO2 emissions.Thus, it is critical to research how ICT and innovation affect various CO2 levels in G20 countries.The problem lies in the G20's dedication to collaborative climate change mitigation via innovative approaches, revealing a significant research gap in comprehending how ICT and innovation distinctly contribute to the reduction of CO2 emissions across the G20 nations.The objective of this study is to examine the impacts of ICT and innovation on CO2 emissions in G20 countries by using panel quantile regression approach.The implication of this study demonstrates that ICT and innovation not necessary reduce CO2 particularly with countries that are with lower level of CO2, namely below the 40 th quantile level.Therefore, specific strategies related to ICT and innovation and their effectiveness on CO2 may vary depending on the country's level of CO2.The contribution of this study is to examine the environmental effect of ICT and innovation at various levels of CO2 in G20 countries, thereby closing the literature gap where this issue has only been examined based on linear regression based on Vector Error Correction Model [8].Linear regression only examines an overall relationship.However, relationship between ICT, innovation and carbon emissions could be different at different levels, which can only be captured through quantile regression analysis.

Literature Review
There are three different effects that ICT has on environmental quality, namely use effect, the substitution effect, and the cost effect [9].In the use effect of ICT, the production cycle such as manufacturing, processing, distribution, and maintenance uses a lot of electricity and produces more CO2.Additionally, the e-waste generated by the use of ICT equipment throughout the production process could increase CO2 emissions.The replacement of older technology with newer technology is referred to as the substitution effect of ICT, and this will boost production efficiency due to a variety of factors.
For instance, smart transportation, the internet and telecommunication, and energy management.The cost effect explains that ICT infrastructure, equipment, and service costs may have an impact on how widely ICT is embraced, how it is used, and how much CO2 is released as a result.Higher costs may discourage adoption and usage of ICT, resulting in lower CO2 emissions, whereas lower costs typically encourage increased ICT usage.
Park et al.
[10] found a positive association between ICT and carbon dioxide emissions in European Union countries, while Avom et al. [11] observed the same relationship in sub-Saharan African countries.Similarly, Tsaurai and Chimbo [12] identified this connection in emerging economies, Arshad et al. [13] in the South and Southeast Asian (SSEA) region, and Raheem et al. [14] in the G7 countries over the long term.These studies suggest that ICT poses a threat to environmental quality due to its contribution to increased CO2 emissions.On the contrary, Shaaban-Nejad and Shirazi [15]argued that ICT has the potential to mitigate CO2 emissions.Hence, we hypothesize the first hypothesis in this study as follows: H1: ICT significantly affect CO2 emissions.
Technological innovation systems (TIS) framework acknowledges that by innovating new technology, enhancing current procedures, and enabling systemic changes, technological advances have the potential to have an impact on CO2 emissions.TIS places a strong emphasis on the different players, organisations, and networks that are engaged in the creation, dissemination, and application of innovations that can help lower CO2 emissions [16].According to López et al. [17], the endorsement of technological innovations such as electric buses and emission-free buses could play a vital role in enhancing the environmental aspect.In a similar vein, Chishti et al. [18] put forward the proposition that energy innovation has the potential to enhance environmental sustainability.Töbelmann and Wendler [19] uncovered contrasting effects of innovation on CO2 emissions.While they found that environmental innovation has the potential to decrease CO2 emissions, they also discovered that general innovative activity actually leads to an increase in CO2 emissions.Thus, we hypothesize the second hypothesis in this study as follows: H2: innovation significantly affect CO2 emissions.
Noting that the previous studies fail to account for the diverse impact of ICT and innovation on CO2 in G20 countries by taking into consideration the varying distribution of CO2.The quantile regression model is appropriate when the relevant factors have unique effects at various levels of the conditional distribution of the dependent factor [20].Given that the effects of ICT and innovation on CO2 can differ depending on the specific levels of CO2, this paper aims to analyze the relationship between ICT and innovation on CO2 in G20 countries by employing a panel quantile regression model, thereby addressing the existing gap in the literature.

Data and Methodology
In this study, a panel of G20 countries' annual data from 2000 to 2019 is examined.The reason our data sample begins in 2000 is that the ICT and innovation start to augment in the 20s century.On the other hand, the year 2019 is the year before Covid-19 pandemic.Since the lock down regulation is implemented in many countries due to Covid-19 pandemic in year 2020 to 2022 and the reduction of CO2 could affect our analyses, hence we use the data until year 2019.The dependent variable of this paper is carbon dioxides (CO2) emissions, that was collected from the World Bank.The main variable of interest employed by this study included ICT goods imports (ICT) and patent applications by residents (INNO).Furthermore, based on the past literature, we also include some control variables namely globalisation index (GLO), environment-related technologies (ERT), climate change adaptation technologies (CCAT), sustainable ocean economy (SOE), foreign direct investment (FDI) and gross domestic production per capita (GDPC).These variables may have an impact on carbon emission as found in past literatures, thus there is a need to include them as control variables.
The data for the CO2, ICT, INNO, FDI and GDPC were gathered from the World Development Indicators.Data for GLO was extracted from KOF Swiss Economic Institute.The data for ERT, CCAT, SOE were retrieved from OECD.stat, a databased of Organization for Economic Cooperation and Development (OECD).
To achieve the objective, panel quantile regression was used.The conditional quantile function was specified for quantile τ as the Equation (1) below: 2  (/) = (  ,   ,   ,   ,   ,   ,   ,   ) (1) Table 3 explains the effects of variables on CO2 emissions on nine different quantiles (Q10= 10 th quantiles, Q20= 20 th quantiles, Q30= 30 th quantiles, Q40= 40 th quantiles, Q50= 50 th quantiles, Q60= 60 th quantiles, Q70= 70 th quantiles, Q80= 80 th quantiles, Q90= 90 th quantiles).The findings suggest that when considering information and communication technologies (ICT), there is a significant positive impact in the lower quantiles (10th to 40th), but no significant effect on CO2 emissions in the higher quantiles (50th to 90th).This indicates that ICT has contributed to increased environmental degradation in countries with lower CO2 emissions.The plausible reason is that energy consumption has significantly increased as a result of the quick expansion of ICT infrastructure, including data centres, telecommunications networks, and devices.When energy is used to power and cool these infrastructural elements, especially when it comes from fossil fuel sources, CO2 emissions may result.Moreover, environmental difficulties arise from the management and disposal of electronic waste (E-waste) produced by ICT equipment.When E-waste is handled improperly, harmful compounds and pollutants may be released, which may worsen the environment and increase CO2 emissions.Similar results have been observed in studies conducted by [12][13][14].Consequently, the findings refute Hypothesis 1.In relation to patent applications by residents (INNO), the results reveal that they have a positive and significant impact on CO2 emissions across the 30th to 90th quantiles.Patent applications could place a higher priority on economic gains and technological developments than on environmental effects.As a result, it is possible that the patented technology do not include enough strategies to cut CO2 emissions or support sustainable practices.New technologies or inventions are frequently the subject of patent applications.Adoption and use of these technologies may result in increased CO2 emissions if they are carbon-intensive or rely on fossil fuels.This is especially the case if these technologies are extensively used and accepted, leading to a lock-in effect that is challenging to overcome.This implies that patent applications contribute to environmental degradation in the majority of G20 countries.These findings contradict the conclusions drawn in previous studies [21,22].Hence, our study rejects hypothesis 2.

Results and Discussions
Regarding the environmental research and technology (ERT) and climate change adaptation technologies (CCAT), they show a positive relationship with CO2 emissions at lower quantiles and a negative relationship at higher quantiles.However, the impact of these variables, along with sustainable ocean economy (SOE), is not statistically significant.The GLO coefficients exhibit a negative trend across the 50th to 90th quantiles, with statistical significance observed primarily at the higher quantiles (70th to 90th).These findings indicate that globalization has a significant and notable effect in reducing environmental pollution in countries with higher CO2 emissions.In most quantiles, FDI and GDPC show no significant impact on carbon dioxide emissions.However, there are notable findings at specific quantiles.FDI is found to be significant at the 10th quantile with a negative effect, suggesting that foreign direct investment has the potential to decrease carbon dioxide emissions in countries with the lowest levels of such emissions.Conversely, GDPC is found to be positively significant at the 70th quantile, indicating that an increase in GDP per capita leads to higher economic activities and, subsequently, increased carbon dioxide emissions.

Conclusions
The G20 countries have made a call to take action in safeguarding, conserving, and sustainably managing degraded lands, water bodies, oceans, and seas.Additionally, they have emphasized the need to reduce CO2 emissions.ICT plays a crucial role in enabling innovation, improving productivity, facilitating communication, and driving economic growth within the G20 countries.It has become indispensable in various sectors, including businesses, governments, educational institutions, healthcare systems, and everyday life.However, the use of ICT also raises concerns and drawbacks, including potential environmental harm.To address these issues and ensure long-term positive outcomes, responsible and sustainable ICT usage is essential.Furthermore, the G20 nations are at the forefront of technological advancements and groundbreaking ideas in various industries, such as information technology, healthcare, renewable energy, transportation, and manufacturing.They have played a significant role in the development of biotechnology, clean technologies, artificial intelligence, the digital revolution, and environmental improvement.
The aim of this study is to examine the effects of ICT and innovation on CO2 emissions in G20 countries.Employing panel quantile regression, we analyze a dataset covering the period from 2000 to 2019.The results indicate that when examining the role of information and communication technologies (ICT) on CO2 emissions, there is a noteworthy positive effect in the lower quantiles (below the 40 th quantile level).Additionally, the findings demonstrate a positive and significant influence of ICT on CO2 emissions in the middle quantiles (between the 40 th to 60 th quantile levels).The findings indicate that innovation has a significant positive impact on CO2 emissions across the quantiles with higher level (above the 60 th quantile) of CO2 emissions.
The implication of the study is that the increasing use of information and communication technologies (ICT) is associated with a rise in CO2 emissions in the G20 countries with low level of CO2.This shows that despite having many advantages, the increasing reliance on ICT also leads to environmental deterioration and climatic change.The results emphasize the need for initiatives and regulations to lessen the environmental impact of ICT use, such as enhancing energy efficiency, encouraging the use of renewable energy sources, and implementing sustainable business practices in the ICT industry.The report also highlights the significance of taking environmental effects into account while installing and developing ICT systems, as well as the relevance of looking into measures to reduce their carbon footprint.The study also shows that while innovation promotes economic growth and technical development, it also presents problems for the sustainability of the environment.The results show how innovation-driven progress and environmental concerns need to be balanced.It is crucial to create and implement cutting-edge solutions that reduce carbon emissions, advance clean technology, and support sustainable practices.To make sure that innovation is driven by environmental objectives like lowering emissions, boosting energy efficiency, and implementing eco-friendly practices, policymakers, industry, and researchers should work together.To reduce the impact on CO2 emissions and work towards a more sustainable future, the study emphasizes the significance of incorporating environmental considerations into innovation initiatives.
In conclusion, the complexity of the connection between ICT, innovation, and CO2 emissions is highlighted by vary level of CO2 emissions.It emphasizes how crucial it is to take into account the precise context and amount of CO2 emissions when assessing their impact.The results indicate that CO2 emission reduction strategies should consider each country's degree of development, environmental

Table 1 .
Carbon dioxides emissions by G20 countries in 2000

Table 2 .
Table 2 illustrates the descriptive statistics of the variables.Significant disparities between the minimum and maximum values of the variables indicate substantial gaps between countries.The considerable variations in CO2 emissions among the G20 nations can be attributed to factors such as varying levels of industrialization, economic development, energy sources and usage, population demographics, climate conditions, geographic characteristics, and government policies and regulations.Numerous factors, including changes in government policies, trade relations, natural disasters, global economic conditions, and technological advancements, can contribute to differences in GDP among G20 nations.Descriptive data of the variables Additionally, the number of patents application by residents as the proxy for innovation (INNO) in a country can vary due to multiple reasons, including technological progress, economic circumstances, intellectual property regulations, educational and research efforts, government policies, and demographic factors.Conversely, the minimum value of CCAT and SOE being zero indicates that some countries may not have resources, awareness, technology transfer capabilities, sufficient capacity, or favorable local conditions for implementing CCAT and SOE initiatives.A negative minimum value for FDI implies net outflow of foreign investment.