Digital Infrastructure as a Catalyst for Low-Carbon Development: A Panel Data Analysis of the European Union

Abstract

 This study examines how digital infrastructure expansion shaped carbon intensity across the EU-27 member states from 2015 to 2021. Using a Fixed Effects panel model with White Diagonal robust standard errors, the research tests for an Environmental Kuznets Curve (EKC) pattern in digital adoption. The results of the empirical analysis confirm an inverted U-shaped relationship between fixed broadband penetration and carbon intensity, reaching an inflection threshold at approximately 24.8 subscriptions per 100 residents. Initial infrastructure build-outs raise emissions due to added power requirements. Once networks cross this 24.8 threshold, structural efficiency gains and automated energy monitoring reduce overall carbon intensity. These findings indicate that while early-stage digital expansion initially correlates with higher energy demand, advanced digitalization is associated with lower carbon intensity, reflecting structural efficiency and better energy control. Furthermore, the analysis highlights the key contribution of renewable energy and economic development in reducing the EU's environmental impact. Additional channels and heterogeneity analyses indicate that broadband connectivity is positively associated with renewable-energy deployment and that its decarbonization effect is significantly stronger in countries with higher digital maturity. These findings support a coordinated "Twin Transition" policy framework, aligning digital investments directly with the European Union's 2050 climate neutrality targets.

Received: 22 March 2026 | Revised: 17 August 2026 | Accepted: 25 September 2026

Conflicts of Interest

The author declares that she has no conflicts of interest to this work.

Data Availability Statement

The data that support the findings of this study in Table 1 are openly available from the World Bank's World Development Indicators database at https://databank.worldbank.org/ source/world-development-indicators#.  The data presented in Table 1 were compiled and systematically organized by the author based on the original data obtained from the World Bank.

Author Contribution Statement

Ani Stoykova: Conceptualization, Methodology, Software, Validation, Formal analysis, Investigation, Resources, Data curation, Writing – original draft, Writing – review & editing, Visualization, Supervision, Project administration, Funding acquisition.