Assessing the Role of Artificial Intelligence in Achieving Green Growth: A Panel Data Analysis for OECD countries

Abstract

While higher economic growth can improve lives by reducing poverty, it often comes at the cost of environmental degradation. Over the last two centuries, technological advancements have been considered a key driver of economic growth. Technologies such as Artificial Intelligence (AI) are believedto be vital in reducing carbon emissions and fostering green growth (GGT). The study examines the relationship between investment in AI and GGT in the Organization for Economic Cooperation and Development (OECD) countries, which are almost all advanced and have invested more in AI than any other region. A decade comparison through maps revealed that the OECD region has invested more in AI development and deployment in recent years. The results of the Generalized Method of Moments (GMM) show that AI has a significant negative relationship with green growth in the linear form, while in the quadratic form, it exerts a significant positive impact on green growth. The dual effect of AI highlights that AI initially disrupts green growth due to high initial costs, and after a certain threshold, it impacts green growth positively. The study recommends policies and guidelines to ensure proper utilization of AI for green growth objectives