The impact of socio-economic factors and digital performance on environmental sustainability: the case of European Union

Environmental degradation, driven by economic growth, remains a pressing concern. The European Union (EU) has responded by adopting international protocols to mitigate climate change. However, rapid digital transformation has also influenced economic growth and environmental quality. Greenhouse gas (GHG) as well as CO₂ emissions have risen markedly in recent decades. Thus, a major contemporary concern is to thoroughly investigate the interconnections of economic growth, technological advancements and environmental sustainability to design effective policies for mitigating CO₂ emissions. The EU developed Digital Economy and Society Index (DESI) as a comprehensive framework for assessing the digital development and performance of its member states. Despite the research on DESI concerning sustainability, its influence on environmental sustainability, notably on CO₂ emissions, remains inadequately examined. Moreover, the impact of the Kyoto and Doha protocols on CO₂ emissions has not been studied extensively. This study addresses this gap studying the nexus of economic growth, digital performance, designated international protocols, and CO₂ emissions observed in EU member states across the span of 1995 to 2018. The impact of several socio-economic factors on CO₂ emissions is evaluated using Mixed Effect Models. The results confirm the mitigating role of renewable energy, cultivated land area, the Human Capital dimension of DESI, and the Doha Protocol in reducing CO₂ emissions. Conversely, increases in gross domestic product per capita, non-renewable energy consumption, agricultural value added, research and development expenditures, and the Use of Internet Services and Integration of Digital Technology dimensions of DESI on increasing environmental degradation tend to exacerbate environmental degradation. Finally, the Environmental Kuznets Curve hypothesis is also confirmed.