Asymmetric impact of information and communication technologies on environmental quality: analyzing the role of financial development and energy consumption

The development of information and communication technologies (ICT) positively contributes to economic growth; however, their environmental implications cannot be ignored. Therefore, it is imperative to investigate the impact of ICT, energy consumption, economic growth, and financial development on the air quality in Pakistan. Drawing on the data set from 1976 to 2018, we employed Nonlinear Autoregressive Distributed Lag model. The results revealed that there is a substantial presence of asymmetric cointegration between ICT and CO₂ emissions. The empirical results unfold that positive shocks in ICT negatively affect CO₂ emissions, implying that an increase in ICT brings a decrease in CO₂ emission; negative shocks in ICT publicized a negative association with CO₂ emissions, inferring that a decrease in ICT will bring an upsurge in CO₂ emissions. Moreover, on the dark side, energy consumption and financial development degrade the environmental quality by increasing the CO₂ emissions in Pakistan. Additionally, the existence of the Environmental Kuznets Curve hypothesis in Pakistan was confirmed. Our key findings emphasize the importance of ICT development and several environmental implications in attaining the sustainable development goal.