DECARBONIZATION IN THE DIGITAL AGE: A CRITICAL LITERATURE REVIEW OF ECONOMIC GROWTH AND SUSTAINABILITY TRADE-OFFS
DOI:
https://doi.org/10.35631/IJEMP.936054Keywords:
Digital Economy, Decarbonization, Economic Growth, Sustainable Development, Systematic Literature ReviewAbstract
The growth of the global digital economy has made it more important to understand whether digitalisation is aiding decarbonisation or generating new environmental pressures. While the empirical research is growing, evidence in the existing studies is conflicting and seldom combine the efficiency-enhancing and resource-rebound perspectives into a single conceptual framework. This research carries out a systematic and critical literature review of the digital-sustainability nexus via Scopus using PRISMA. This review summarises peer-reviewed literature from 2022 to 2026, including 14 empirical studies and five methodological and foundational references. This survey surveys evidence from corporate governance, energy markets, smart-city systems, digital trade, and macroeconomic policy. Studies were rated for quality against criteria relating to internal validity, transparency of data, rigour of analysis and, for review articles, transparency of search and inclusion procedures. The results indicate that digital technologies can enhance energy efficiency, optimise the allocation of resources and reduce carbon intensity. However, these gains can be offset by rebound effects, growing demand for electricity and resource use associated with digital infrastructure. The review’s main contribution is a conceptual synthesis that integrates the Ecological Modernisation Theory and the Jevons Paradox to account for the conditional, rather than uniformly positive or negative, environmental impacts of digitalisation. Governance, fiscal policy, green finance, renewable-energy deployment and corporate digital-decarbonisation maturity are highlighted as important conditions to align digital transformation with decarbonisation in the review. The resulting framework provides an evidence-based basis for future empirical research and for designing digital transformation strategies that maximise environmental benefits, while limiting unintended rebound effects.
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