How Do Equity Market Performance and ICT Influence Clean Energy Consumption in High-Income Countries?

Introduction

Scientists agree that carbon dioxide emissions causing global warming are brought about by the use of fossil fuels such as coal, oil and gas as energy sources. Reducing the use of fossil fuel energy is necessary to mitigate the effects of global warming and climate change, and this is one of the most urgent demands of the international community to protect the global environment (Chang et al., 2020). Therefore, in recent years, many researchers and policy makers have focused on the use of renewable energy and its subunits of clean/green energy rather than traditional energy sources (such as fossil resources) in the production process. Clean energy has many advantages over fossil fuels, meeting the increasing energy demand and reducing carbon dioxide emissions. International organizations are pushing countries by focusing on the use of clean energy at the Kyoto Protocol Summit in 1997. Developed and developing countries also promote clean energy production and use (Paramati et al., 2016). In this context, it has been determined that clean energy sources are needed in the energy system in order to reduce the carbon dioxide emission level in the atmosphere from past to present (Alam et al., 2021).

Equity market development plays an important role in the entire energy system in general, especially in the use of clean energy (Alam et al., 2021). In addition, equity market developments enable to create a healthy business environment for both companies and investors. This is because the equity market provides additional funds for listed companies, which offers alternative investment opportunities for both national and international investors. Equity market developments lead to increase energy demand by increasing economic activities in countries (Paramati et al., 2016). According to some researchers in the literature, equity market development has been found to reduce carbon dioxide emissions (Paramati et al., 2017b; Habiba et al., 2021; Younis et al., 2021) while according to some, equity market development has increased clean energy consumption (Paramati et al., 2016; Alam et al., 2021). At the same time, the clean/renewable energy consumption in 28 EU countries is positively affected by the banking sector and bond market development for the period of 1990–2015 but it is not affected by the stock market. In addition, the developments in the capital market have an impact on clean energy consumption, some studies (Talan et al., 2022; Yu et al., 2023) investigate whether information, communication and technology (ICT) have an impact on clean energy consumption. ICT is seen as a fundamental tool that contributes to easing human life, helping economic development and improving the energy efficiency of any country equally (Bano et al., 2022).

In this context, the rapid developments in energy efficiency and clean energy infrastructures of high-income countries (Taşbaşı, 2022) and the development of ICT and equity market for clean energy consumption cause high-income countries to be accepted as a case in this study. Since the 1990s, large ICT investments of high-income countries have become important (Öztürk, 2002). Likewise, stock markets in such countries are experiencing a rapid development in terms of volume and efficiency (Alam et al., 2021). Thus, ICT and equity market development improve renewable energy generation and increase its consumption (Yu et al., 2023; Qiu et al., 2023). It is, therefore, of vital importance to examine the relationship between ICT and stock market development and clean energy consumption in the case of high-income countries.