The Carbon Footprint of Digitalization: Spatial Spillovers of ICT Development and Implications for Sustainable Development

ABSTRACT Information and Communication Technologies (ICT) are often viewed as drivers of innovation, connectivity, and sustainable development. However, their environmental consequences remain unclear when cross‐country spatial links are ignored. This study examines how ICT development affects CO2 emissions in 87 countries from 2006 to 2016 using a balanced panel and spatial econometric models. The analysis separates domestic effects from spillover effects on spatially connected economies. The results show that ICT development increases CO2 emissions directly in the short run and generates positive spatial spillovers in both the short and long run. This suggests that the carbon footprint of digitalization is not limited to domestic emissions. We also find that trade openness reduces the spatial spillovers associated with ICT development, indicating that international integration can help moderate the cross‐border environmental burden of digital expansion. These findings remain robust when alternative ICT indicators and alternative spatial weight matrices are used. The results contribute to the sustainable development debate by showing that digital infrastructure policies linked to SDG 9 should be coordinated with climate action under SDG 13. Since ICT‐related emissions can spill across countries, sustainable digital transformation also requires international cooperation and closer coordination between digital expansion and climate policy.