The Impact of Industrialization, Information and Communication Technology, Economic Activity, and Trade Openness on Emissions in Europe: Evidence from Lithuania

In recent years, industry development has become closely connected with Information and Communication Technology (ICT) and trade openness. This research explores how industry, ICT, economic activity, and trade openness affect the environment, highlighting the importance of investing in low-carbon technologies and energy-efficient machinery. The goal of this research is to investigate the short- and long-run impacts of industrialization, ICT, economic activity, and trade openness on per capita carbon emissions in Lithuania from 2000 to 2024. This study employs the ARDL econometric model along with several diagnostic tests. The Breusch–Godfrey Serial Correlation test indicated no serial correlation, while the Breusch–Pagan–Godfrey test indicated no heteroscedasticity. The Ramsey RESET test confirmed that the model specification is appropriate and significant for the research. Additionally, the VIF test for multicollinearity indicates that no multicollinearity exists among the research variables. The research results show that industrialization and economic activity are positively associated with per capita carbon emissions and environmental harm. In contrast, trade openness and ICT are negatively associated with per capita carbon emissions in Lithuania, thereby contributing to environmental sustainability. The novelty of this research: a specific combination of variables combining key structural (industrialization), integration (trade openness), and digital diffusion (ICT penetration) determinants of CO2 emissions within a specific single-country context, applying the ARDL framework for the Baltic EU member state, Lithuania. While prior studies primarily relied on multi-country panels and often treat ICT through heterogeneous proxies, this study operationalizes ICT as internet-user penetration to capture digital integration effects—an important distinction for small open economies where energy-intensive digital infrastructure may be located abroad. By separating short-run from long-run dynamics, the analysis offers evidence on how the environmental effects of openness, growth, and digitalization unfold over time, using recent data up to 2024 and providing policy recommendations encouraging decarbonization strategies.