Do Digitalization and Artificial Intelligence Promote Environmental Sustainability?

This study examines the relationship between digitalization, artificial intelligence, energy transition, and environmental sustainability in Tunisia during 2004–2023. The findings show that the digital economy reduces carbon emissions in the short run, while digital finance and renewable energy enhance environmental sustainability in the long run. In contrast, digital infrastructure contribute to higher carbon emissions, highlighting the environmental costs of digital growth under carbon-intensive energy systems. Quantile regression results reveal that the Human Development Index is the only consistently significant determinant of carbon emissions. Granger causality analysis identifies important links among AI innovation, digitalization, digital finance, human development, and energy transition. The results underscore the importance of renewable energy investments, energy-efficient infrastructure, and supportive policies to ensure that digital transformation contributes effectively to sustainable development in Tunisia.