Can Emerging Economies Go Green Without Going Digital? New Evidence from the E7

The success of global energy transformation may depend just as heavily on less visible foundations: digital networks capable of managing modern power systems, public institutions able to enforce credible rules and economies capable of financing cleaner infrastructure, argues a new study published in the journal Energies.

Titled"The Role of ICT and Institutions in Sustainable Energy Transition: Empirical Evidence on E7 Countries," the study examines how information and communication technologies, institutional quality and per capita income influenced sustainable energy transition across Brazil, China, India, Indonesia, Mexico, Russia and Türkiye between 2000 and 2024.

The findings offer a warning against one-size-fits-all energy policy. Digital development was positively associated with transition in most E7 economies, but institutions delivered sharply different outcomes across countries. Economic growth also helped only where rising income appeared to support cleaner technologies rather than deepen fossil-fuel dependence.

Digitalization Is Becoming the Transition's Quiet Powerhouse

ICT development was significantly associated with stronger sustainable energy-transition performance in Brazil, China, India, Indonesia, Mexico and Türkiye. Russia was the only E7 economy where the long-term relationship was not statistically significant.

The researchers also identified a one-way Granger-causal relationship running from ICT development to sustainable energy transition. In practical terms, changes in digital development helped predict later changes in energy-transition performance, while the reverse relationship was not found. This does not amount to experimental proof that digitalization alone causes transition, but it strengthens the argument that ICT is an enabling condition rather than a peripheral technological add-on.

The logic is increasingly visible across the energy sector. Renewable electricity is variable: solar production falls at night, wind output changes with weather and electricity demand fluctuates throughout the day. Digital technologies allow utilities to monitor these movements, balance supply and demand, integrate distributed generation and identify inefficiencies across transmission and distribution networks.

Smart meters can help consumers manage consumption. Digital platforms can connect rooftop solar producers with grids. Advanced monitoring can reduce technical losses and improve maintenance. Data systems can also help governments design targeted subsidies and identify communities that remain underserved.

The study is particularly valuable because it does not define transition narrowly as higher renewable-energy consumption. Its SDG7-based indicator combines electricity access, clean cooking, renewable energy use and carbon emissions. Sustainable transition is therefore treated as an economic, environmental and social process, not simply a change in the generation mix.

However, digitalization is not automatically green. Expanding data centres, mobile networks, servers and connected devices can increase electricity consumption. Efficiency improvements may also reduce costs and stimulate greater energy use, creating a rebound effect. The policy question is therefore not whether economies should digitalize, but whether their digital expansion is being deliberately aligned with decarbonization, efficiency and universal energy access.

Governance Can Accelerate Change or Reinforce the Status Quo

Institutional quality produced the study's most uneven results. It had a positive and statistically significant association with sustainable energy transition in China, India and Indonesia, but a negative association in Mexico. The relationship was not statistically significant in Brazil, Russia or Türkiye, nor for the E7 panel as a whole.

This variation challenges the assumption that stronger institutions will always and automatically generate greener outcomes. Institutions matter because they shape regulation, investment security, permitting, public procurement, property rights and the credibility of long-term policy. But their environmental impact depends on what those institutions are designed to achieve and whose interests they protect.

A well-functioning regulatory system can accelerate renewable-energy approvals, enforce grid-access rules and reduce uncertainty for investors. The same institutional machinery can also preserve fossil-fuel subsidies, protect incumbent energy companies or delay new competitors if environmental priorities remain weak.

The authors connect Mexico's negative result to institutional inefficiencies, weak environmental policy and a relatively limited renewable-energy transition. They also report deteriorations in institutional quality in Mexico, Brazil, Russia and Türkiye during the study period, arguing that these economies did not convert their governance systems into an effective force for sustainable transition.

Governments and international lenders frequently focus on the cost of generation projects, but capital will not produce durable transformation when energy regulators lack independence, procurement is opaque or policy changes unpredictably.

Institutional reform should therefore be treated as energy infrastructure. Transparent auctions, credible tariff systems, enforceable contracts and simplified permitting procedures may be less visible than solar panels, but they determine whether clean-energy investment reaches financial closure and survives political change.

Growth Helps Only When It Is Converted Into Clean Capacity

The study finds that rising per capita income supported sustainable energy transition in Brazil, China, India, Indonesia and Türkiye. The relationship was not statistically significant in Mexico or Russia. The causality analysis also indicates a one-way predictive relationship from per capita GDP to sustainable energy transition.

Higher income can give governments, companies and households greater capacity to invest in renewable generation, efficient appliances, grid modernization, public transport and cleaner industrial technologies. As living standards improve, citizens may also demand better air quality and stronger environmental protections.

However, growth does not carry an inherently green direction. Expanding industrial production, vehicle ownership, urban construction and household consumption can increase energy demand faster than renewable systems are deployed. When additional demand is met through coal, oil or gas, economic expansion may reinforce carbon-intensive infrastructure for decades.

Russia and Mexico illustrate this tension in the study. The researchers argue that fossil-fuel dependence, weak environmental policy and limited renewable-energy progress help explain why higher income did not produce a statistically significant improvement in their broader transition performance.

The larger lesson is that governments cannot simply wait for growth to finance decarbonization. They must shape the direction of growth through industrial policy, energy regulation, technology incentives and public investment.

This is especially important for developing economies facing competing demands. Governments must expand electricity access, support manufacturing, create jobs and maintain affordable energy while also reducing emissions. Poorly designed transition policies can raise costs for vulnerable households or weaken industrial competitiveness, but delaying modernization can leave countries exposed to obsolete infrastructure, volatile fossil-fuel prices and declining access to climate-conscious investment. The strategic challenge is to ensure that every additional unit of economic capacity strengthens, rather than undermines, the transition.

The Real Policy Test Is Whether the Pieces Work Together

The study suggests that renewable-energy capacity, digital infrastructure, governance and economic development cannot be treated as separate policy domains. The researchers recommend that E7 governments accelerate investment in smart grids, smart meters, real-time energy monitoring and digital demand-management systems. They also propose financial incentives, digital-skills development and public-private partnerships to help integrate ICT into energy systems.

For Brazil, Mexico, Russia and Türkiye, the paper calls for governance reforms that strengthen regulatory quality, rule of law, transparency and the independence of energy authorities. It also recommends simpler permitting, stronger anti-corruption mechanisms and more predictable frameworks for long-term investment. Mexico and Russia, given their fossil-fuel dependence, are urged to expand renewable deployment through competitive auctions, feed-in tariffs or market-based support mechanisms.

International development institutions should draw a similar conclusion. Financing a solar project without addressing grid constraints may produce stranded capacity. Supporting digital infrastructure without cybersecurity and data-governance safeguards may introduce new risks. Promoting regulatory reform without protecting affordability may trigger political resistance.

The authors note that the study sample covers only seven large emerging economies, which differ substantially in income, emissions, energy structures and institutional conditions. The composite SDG7 index offers a broad picture, but it can conceal trade-offs between its components: progress in electricity access, for example, may occur alongside weak emissions performance. The observational design also cannot eliminate every possible omitted influence or establish causation with the certainty of a controlled experiment.

They acknowledge the restricted geographic and time coverage and recommend future research examining specific components of institutional quality across countries with different governance conditions.