Digital growth in Algeria and its implications on the economy and the environment: Analysis using the ARDL approach for the period 2000-2022

Abstract

This article assesses the impact of digital growth in Algeria and its implications on the economy and the environment. For a more aggregated use of ICT, it addresses the hypothesis of the rebound or the third-order effect, implied by the electricity consumption channel. This contribution deploys a constructive, conceptual, and quantitative analysis. Referring to the empirical work of Hilty et al. (2006) and Tsaurai et al. (2019), we estimate an ARDL model to examine the short-and long-term elasticity coefficients of electricity consumption, digital, economic, and financial growth indicators. The analysis spans from 2000 to 2022. The results indicate the presence of a cointegration form with an adjustment coefficient of -2.78 and a causality relationship between CO2 emissions and the variables. The short-and long-term elasticity coefficients for per capita electricity consumption are negative. The coefficient is (-0.27) in the short term and smaller in magnitude in the long term (-0.147). The emissions rate per kWh has significantly decreased. The increase in electricity consumption is associated with a decrease in its carbon content. Moreover, digital indicators had a negligible effect with coefficients near zero. These results disprove the rebound effect and suggest that environmental sustainability improved in Algeria during the study period