Connecting the sustainability: How renewable energy and digitalization drive green global value chains

Abstract

As history shows, the nexus of Renewable energy and digitalization is transforming the future of sustainable global value chains.This study examines the comprehensive interconnection between low carbon participation in GVCs, renewable energy consumption, and digitalization in 20 countries with the highest level of digital exports from 1996 to 2023.Renewable energy (RECN) shows a negative relationship, indicating that high dependency on environment-friendly power corresponds with lessened fossil fuel byproducts involved in the procedure of participation in GVCs. Digitalization (DIGIT) illustrates a positive relation, highlighting the adverse effect of digital activities on carbon emissions from GVCs.The interactive effect of digitalization renewable energy (DIGIT∗RECN) is positive, endorsing that renewable energy in digital activities advances the efficiency of digitalization in lessening carbon emissions. Economic and governance dynamics additionally impact the effectiveness of these given interventions. Strong frameworks of governance enable the renewable energy usage and adoption of digital technologies, whereas economic upgrading fasters the shift to sustainable global value chains by enabling investments in innovation and digital infrastructure. The study highlights the need for policy coordination and global collaboration in achieving the goals of decarbonization. The insights from the study presented herein are comprehensive and vital for policymakers and international organizations, pursuing to boost the global value chains sustainability.