Research Paper 22: Assessing the impact of ICT core elements on CO2 emissions: Recent evidence from OECD countries

Digitalization-related services and applications are based on the information and communication ecosystem (ICT) and today encompass almost all areas of society and the economy. They have a variety of different and opposing effects in terms of electricity consumption and the corresponding CO2 emissions.

This analysis aims to inform policy makers about the actual climate relevance of the ICT ecosystem by providing sound empirical evidence on the net effect of different ICT core elements based on recent panel data on OECD countries.

It turns out that the positive indirect CO2-reducing effects appear to outweigh the negative (CO2-increasing) direct and indirect effects on average. Specifically, in addition to the lowering effect associated with the use of basic broadband connections, there is a further - albeit smaller - lowering effect associated with new fiber-based broadband connections. In contrast, other elements of the ICT ecosystem, such as mobile broadband networks or electronic devices, showed no significant net impact on CO2 emissions.

Our key findings indicate that broadband networks can have positive environmental effects for society. For example, undifferentiated climate policy regulations imposed on the ICT ecosystem do not do justice to the heterogeneity identified and would be accompanied by inefficiencies and market distortions.