Climate Mitigation Pathways in E-7 Countries: The Interplay of Technology Exports, Renewable Energy Consumption, and Resource Productivity under Digitalization

Abstract

This study investigates the determinants of environmental sustainability in E7 economies, emphasizing the novel role of digitalization as a moderating factor in the nexus between technology exports, renewable energy consumption, resource productivity, and ecological quality. Given the rising environmental pressures associated with rapid industrialization, this research contributes to the literature by integrating these variables within a unified framework using the load capacity factor as a comprehensive sustainability indicator. The analysis covers Brazil, China, India, Indonesia, Mexico, Russia, and Turkey over the period 2005-2024, employing the Dynamic Common Correlated Effects (DCCE) estimator to address cross-sectional dependence and heterogeneity. The findings reveal that technology exports negatively affect environmental quality, whereas renewable energy consumption, resource productivity, and digitalization improve sustainability. Importantly, digitalization mitigates the adverse impact of technology exports, strengthens the positive effect of renewable energy, and enhances the environmental benefits of resource productivity. Policymakers should align digital transformation with green industrial strategies. Expanding renewable energy and promoting resource efficiency remain essential for sustainable development.