Table of Contents

ABSTRACT

Since the Industrial Revolution, human activity has led to a notable increase in greenhouse gas emissions, such as carbon dioxide, the fact that severely raised the concentration of these gases in the atmosphere and significantly contributed to the global warming. Digital economy was thought to be a key element here. The European Union has made significant commitments in this area and has acknowledged the need for the economy to become less carbon-dependent. Therefore, this paper has explored the role of digitalization on carbon emissions in 27 European countries from 2017 to 2022. Using various statistical methods of panel data, such as the fixed effect model, OLS, and GLS models, using five linear equations, the results have demonstrated that the digital economy (measured by the Digital Economy and Social Index) and its components (connectivity, human capital, digital technology, and digital public services) are statistically significant and negative. Therefore, digitalization, connectivity, human capital, digital technology, and digital public services reduce carbon emissions in the European countries. Our research aims at providing policymakers with a theoretical frame of reference so that they may adopt carbon reduction techniques. Various solutions are proposed, that can be used by governments to minimize the effects of carbon emissions and facilitate the transition to a low-carbon economy through digitalization.

Keywords: digitalization, CO2 emission, digital economy and social index, European countries, panel data.