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Article

The Risk of Global Environmental Change to Economic Sustainability and Law: Help from Digital Technology and Governance Regulation

by
Zhen Cao
1,
Zhuiwen Lai
1,
Muhammad Bilawal Khaskheli
1 and
Lin Wang
2,*
1
School of Law, Hainan University, No. 58 People’s Avenue, Haikou 570228, China
2
School of Law, Guizhou University of Finance and Economics, No. 288 Huayan Road, Guiyang 550000, China
*
Author to whom correspondence should be addressed.
Sustainability 2025, 17(15), 7094; https://doi.org/10.3390/su17157094
Submission received: 1 July 2025 / Revised: 25 July 2025 / Accepted: 3 August 2025 / Published: 5 August 2025
(This article belongs to the Special Issue Innovations in Environment Protection and Sustainable Development)
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Abstract

This research examines the compounding risks of global environmental change, including climate change, environmental law, biodiversity loss, and pollution, which threaten the stability of economic systems worldwide. While digital technology and global governance regulation are increasingly being proposed as solutions, their synergistic potential in advancing economic sustainability has been less explored. How can these technologies mitigate environmental risks while promoting sustainable and equitable development, aligning with the Sustainable Development Goals? We analyze policy global environmental data from the World Bank and the United Nations, as well as literature reviews on digital interventions, artificial intelligence, and smart databases. Global environmental change presents economic stability and rule of law threats, and innovative governance responses are needed. This study evaluates the potential for digital technology to be leveraged to enhance climate resilience and regulatory systems and address key implementation, equity, and policy coherence deficits. Policy recommendations for aligning economic development trajectories with planetary boundaries emphasize that proactive digital governance integration is indispensable for decoupling growth from environmental degradation. However, fragmented governance and unequal access to technologies undermine scalability. Successful experiences demonstrate that integrated policies, combining incentives, data transparency, and multilateral coordination, deliver maximum economic and environmental co-benefits, matching digital innovation with good governance. We provide policymakers with an action plan to leverage technology as a multiplier of sustainability, prioritizing inclusive governance structures to address implementation gaps and inform legislation.

1. Introduction

The escalating threats from global environmental changes, such as climate change and pollution, are increasingly jeopardizing long-term economic sustainability. As these issues intensify, they pose significant risks to ecosystems and economies, highlighting the urgent need for innovative solutions [1]. Digital technology can play a pivotal role in addressing these challenges by offering tools for monitoring, data analysis, and enhanced governance. Effective regulatory governance is essential to harnessing these technologies and ensuring they contribute positively to environmental sustainability [2]. This research explores the intersection of digital technology and governance regulation in mitigating the risks posed by global environmental changes, aiming to safeguard economic stability while promoting environmental integrity [3]. International initiatives, such as the United Nations’ Sustainable Development Goals (SDGs), underscore the need for prompt development of new solutions to environmental and social issues. The targets aim to initiate sustainable development among nations, emphasizing partnership and responsibility [4]. However, there must be an effective process of international law capable of responding to evolving global realities. New approaches, such as mainstreaming technology and streamlining cross-border cooperation, need to be implemented to facilitate effective follow-through [5]. By linking national policies to the SDGs, states can enhance their capacity to tackle challenges such as climate change, poverty, and inequality, and build more sustainable and equitable systems in the long run. The 17 Sustainable Development Goals (SDGs) encompass a wide range of global priorities. Of particular interest to us are some of the most specifically applicable SDGs, that is, SDG 3 (Good health and well-being), SDG 5 (Gender equality), SDG 7 (Affordable and Clean Energy), and SDG 8 (Decent work and economic growth), examining their interconnections and effect on sustainable development [6].
The increased risk of global environmental change creates significant economic sustainability issues that require immediate action. Along with the pace of global warming, loss of biological diversity, and pollution, orthodox economics can no longer handle it. It might initiate an oncoming crisis for access to resources and economic stability [7]. The most crucial gap to be filled is the correct harmonization of digital technology and global systems of governance for overseeing these environmental hazards without hindering economic development, as shown in Figure 1. Digital technologies offer new instruments for enhancing governance and regulatory performance, but significant gaps exist in access and enforcement [8]. Secondly, environmental law must be implemented in a manner that facilitates compliance and promotes sustainable development. With proper governance law encompassing these technologies and legal frameworks, nations risk forfeiting the advantage of averting environmental challenges, undermining their long-term economic sustainability. This research aims to analyze how environmental law and ICT can be utilized for the benefit of good governance in avoiding environmental risks, enhancing resilience, and ensuring sustainable economic interventions worldwide [9]. This intersection should be addressed in achieving a sustainable future that fosters harmony between economic development and environmental well-being [10].
In the context of increasing environmental issues and the urgent need for sustainable development, global governance rules play a crucial role in guiding economic policymaking worldwide [11]. This research paper examines the intricate relationship between international agreements, carbon pricing schemes, and green finance policies, as well as their far-reaching implications for promoting sustainable economic development. As nations walk the twin challenges of economic growth and conservation, adequate governance arrangements are imperative [12]. Multilateral agreements establish the legal and cooperative framework for addressing transboundary issues, while carbon pricing policies incentivize reductions in greenhouse gas emissions. Green finance also directs investments to cleaner activities and enhances the capacity of economies to transition to more sustainable practices. Through an extensive study of such regulatory technologies, this research aims to investigate their contribution to sustainable economic growth globally.
Even as digital technologies are increasingly promoted as solutions for environmental risk management, there remain essential gaps in knowledge regarding their effective integration with governance frameworks to achieve economic sustainability. This study answers the lack of concerted models linking three significant facets: (1) climate risk mitigation through digital technologies, (2) regulatory adaptation challenges, and (3) equitable implementation across diverse economies, particularly the underserved Global South. The existing literature does not reconcile the trade-offs between technological potential, policy feasibility, and distributive justice in climate-governance innovation [13].
The United Nations (UN) and the World Bank are responsible for formulating environmental laws and attaining the SDGs. World Bank finances provide technical advice and data to finance poverty reduction and environmental protection projects in sustainable development [14]. It helps countries like India, Brazil, and South Africa implement policies to balance economic growth and the conservation of nature. At the same time, the UN provides international environmental policy with global standards and frameworks of environmental governance, which are established through a multitude of processes and treaties, such as the Paris Agreement and the 2030 Agenda for Sustainable Development [15]. Germany, Canada, and Japan participate in these processes, collaborating on international environmental policy. These UN agencies, such as the United Nations Environment Programme (UNEP), facilitate intergovernmental cooperation, exchange of best practices, and monitoring SDG achievement [16]. These institutions collectively nurture a global ethic of sustainable development that addresses critical environmental issues and promotes social and economic justice.
The World Health Organization (WHO) plays a central role in preventing health problems resulting from environmental change worldwide, facilitating sustainable action towards conserving both the environment and health [17]. Artificial intelligence enhances decision support and data analysis, enabling a timely response to environmental threats. Both enhance governance policies that encourage economic sustainability in the face of global ecological change [18]. Through digital technology, stakeholders can track environmental impacts, regulations can be applied, and adaptive actions can be taken, ensuring that economic development continues in harmony with nature protection. Synergistic practice is required to prevent the threats posed by climate change and build resilient economies [19].
The organization of this paper is as follows. Section 2 reviews the literature, presents the research objectives, and identifies research gaps. Section 3 describes the research methodology, materials, results, and collected research themes. Section 4 provides an analysis and discussion of the studies. Finally, Section 5 presents the conclusion, policy implications, and future research directions.

2. Literature Review

2.1. Global Environmental Change and Its Economic Impacts

Research consistently highlights that economic growth, urbanization, and industrialization tend to increase environmental risks, particularly in the form of higher carbon emissions and larger ecological footprints, thereby challenging the sustainability of global economies [20]. For instance, research conducted in Bangladesh and India reveals that economic growth improves performance but degrades environmental quality if not backed by green policies and technological advances. Trade openness and energy consumption are also positively correlated with environmental risk, while the effect of economic growth on sustainability can be context-dependent and, in specific contexts, non-applicable [21]. Applying renewable energy and investing in green finance have been consistently identified as key ways to mitigate environmental risk and promote economic sustainability. Empirical evidence from BRICS, G20, and MINT countries suggests that green funding and the use of renewable energy can reduce environmental contamination and ecological impacts, aligning with sustainable development objectives. Renewable power efficiency, however, is dependent on both policy circumstances and a country’s economic sophistication [22].
Geopolitical risk and policy uncertainty are significant global environmental issues that have the potential to hinder or accelerate, in some cases, the development of green finance and the adoption of renewable energy. For example, geopolitical risk in BRICS countries can have a positive impact on the long-term growth of green finance, indirectly supporting sustainability efforts [23]. Conversely, geopolitical risk hinders investments in renewable energy in China, highlighting the contextual and sensitive nature of the risk at the organizational and national levels [24]. Risk management frameworks now include environmental, social, and governance (ESG) issues for prioritizing, most importantly, sustainability risks [25]. Economic and geopolitical risks are ranked most frequently as vital, followed by social, technological, and environmental risks. Sub-thresholds such as economic growth deficits, water shortages, and unsound business ethics are deemed the highest priority for sustainable risk management, as they favor farsighted policies that promote green technology, improve institutional quality, and provide incentives for sustainable practices [26]. Policymakers are encouraged to integrate economic incentives with regulatory reforms, push green finance, and invest in renewable energy to reconcile economic growth with environmental preservation [27].

2.2. Governance Regulation for Environmental Protection and Economic Sustainability

Environmental protection and economic law governance regulation involve balancing the roles of central and local governments, the participation of financial actors, and the flexibility of the legal framework [28]. Evidence suggests that centralization and decentralization both have advantages and disadvantages: devolution has the potential to stimulate local government but may lead to unequal enforcement and competition that enhances or reduces environmental quality, while centralization can reduce information asymmetry but increases agency costs and the chances of collusion between local governments and companies; a combination approach is usually recommended for optimal outcomes. Effective environmental governance also requires open legislative powers for local governments to enforce environmental legislation and pursue offenders, together with avenues of public participation and transparency [29]. Economic actors’ involvement is necessary but raises challenges of accountability and legitimacy, which EU law addresses by using protection mechanisms that, however, are not consistently followed. Environmental law has transitioned away from authoritative command to more generalist governance systems that embrace legal, economic, and participatory technologies that demand adaptive legal systems capable of adapting to changing environmental and economic challenges [30,31]. Global environmental change is a significant economic resilience threat, reshaping industries, value chains, and financial stability with climate shocks, resource scarcity, and risks to the rule of law. Legal frameworks do not adapt to these dynamics, so governance gaps open up. Digital technology in the form of artificial intelligence and blockchain, however, has the potential for real-time monitoring of the environment, predictive analytics, and best-in-class resource allocation. When applied in adaptive governance systems, these technologies have the potential to increase compliance with regulations, accountability, and green finance. A framework in which digital innovation and healthy legal systems support each other can eliminate risks, and as such, ensure long-term economic stability while accentuating environmental crises [32].

2.3. Interplay Between Technology, Governance, and Sustainable Development Goals

Digital governance and technology are increasingly recognized as essential drivers in attaining the United Nations Sustainable Development Goals (SDGs). Over time, governments’ investments in digital infrastructure, skills, and cybersecurity are positively linked with national SDG enhancement [33]. Quality digital governance accelerates the attainment of the SDGs and ensures participation and technology benefits for mainstream society. E-business and e-governance, in particular, have been observed to promote transparency, accountability, and trust in government services, which are essential for sustainable development [34]. However, a significant gap remains between the SDGs’ ambitions and the digital government capabilities of most countries, with less than one-third of UN member states having reached high levels of digital government maturity [35]. Localizing SDG agendas through digitalization enables the development of tailored, place-specific solutions, but requires robust data systems, institutional capacity, and investment in digital infrastructure and human capital [36]. Digitalization and governance also intersect in building better sustainability reporting, particularly in emerging markets, where digital adoption and effective governance practices lead to improved SDG outcomes [37]. The convergence of innovative technologies, such as AI, big data, and IoT, can catalyze development, but is contingent upon economic performance and the flexibility of policy frameworks. Suppose the SDGs are to be achieved in the digital revolution era [38]. In this case, a comprehensive strategy is needed that combines technological innovation, inclusive governance, and capacity building to ensure digital transformation fosters sustainable and equitable development [39].

2.4. The Role of Digital Technology in Environmental Sustainability

Digital technology is increasingly vital in propelling environmental sustainability and shaping environmental law. Digital technology, such as AI and big data, enables resources to be managed more effectively, decreases pollution, and facilitates sustainable development. Adaptive legal frameworks are needed to support and regulate such innovations [40]. Intelligent technologies, such as AI and analytics, are leveraged to maximize resource usage in precision farming, thoughtful urban planning, innovative waste management, smart energy management grids, and renewable energy integration, thereby reducing resource use and pollution, as shown in Table 1. Pollution and emission control through digitalization in industries such as transportation and manufacturing lower carbon emissions and improve pollution control through better monitoring and process optimization [41]. Green industry 4.0 technology production makes manufacturing more efficient, but it introduces new environmental burdens from production and disposal of equipment, emphasizing the need for a lifecycle perspective Principle-based adaptive legal systems’ legal frameworks are required to facilitate deployment of digital green technologies, AI, and blockchain for carbon tracking to make it transparent, fair, and sustainable. Policy synthesis in certain regions, such as the EU [42,43], is combining digital technologies with climate policies but in a non-uniform manner due to fragmentation of governance and data issues [44]. Compliance by enterprises with digitalization enables firms to adhere to emerging environmental regulations through improved internal controls, thereby reducing financing limitations and facilitating sustainable development policies [45].

2.5. The Intersection of Law, Technology, and Governance

At their nexus, technology, law, and governance are defined by opportunity and existential challenge as technological transformation disrupts stable legal orders and governing structures [53]. Technologies such as artificial intelligence, blockchain, and internet platforms are racing ahead and outpacing traditional law’s ability to keep up, creating an overreliance on soft law solutions, multistakeholder experiments, and ad hoc governance frameworks that fill regulatory gaps but undermine transparency, accountability, and the rule of law [54]. They erode the law’s prior supremacy and authority, as technology-driven governance may substitute for human judgment, making issues of legitimacy and human rights even more difficult [55]. New technologies, such as AI directors and blockchain, as shown in Table 2, are eliciting calls for new legal frameworks and fiduciary codes in company law to facilitate responsible stewardship and accountability [56]. On a global scale, digital technologies are eroding traditional jurisdictional lines and enabling new dynamics of digital constitutionalism. Responsive legal policies are necessary to strike a balance between the integration of technology, moral standards, public security, and the development of human-centered values. Lastly, the future government depends on the prudent use of technology to avoid undermining the fundamental prerequisites for healthy human societies and the continued validity of the law [57].

3. Materials and Methods

This study adopts a qualitative research design based on an Systematic Literature Review (SLR) and document analysis of secondary data to address existing research gaps in the body of knowledge on global environmental change and economic sustainability, particularly the relatively underexplored possible contribution of digital technology and governance regulation. Secondary data were collected through peer-reviewed articles. Evidence was collected from official databases, the UN, the World Bank, the OECD, and scholarly databases Scopus and Web of Science, using keywords such as digital governance and sustainability regulation, and more than 170 articles were also cited there, around 100 sources. The focus was on 10 years’ worth of publications to ensure relevance [63]. The analysis included a thematic review, identification of trends and gaps, and a comparative legal analysis of global regulatory frameworks, supported by flowcharts and tables to visualize policy evolution and the connections between technology and the environment. A literature review is also presented, as shown in Figure 2. Measurable research is applied in this study, utilizing statistical tools to examine the impacts of global environmental change on the economy and other aspects of law. To enable full reproducibility of our literature review process, we took great care to document all methodology steps including: (1) adopting guidelines to report screening stages using a flow diagram, (2) permanently locking all search strings and Boolean operators in the Open Science Framework repository, and (3) maintaining complete records of reasons for exclusion for all studies excluded—together creating an auditable decision pathway enabling exact replication of our review process.
Global environmental indicators, economic statistics, and climate change data provide the information necessary for this research. Regression analysis and correlation are valuable tools for evaluating the effectiveness of digital technology and policy governance in achieving the Sustainable Development Goals. The five legal variables examined are: (1) regulatory flexibility (speed of adaptation), (2) effectiveness of enforcement (compliance measures), (3) digital accessibility (access to stakeholders), (4) integration of the SDGs (alignment with Goals), and (5) techno-legal alignment (AI/blockchain policy terminology). All of these, in unison, assess digital models of governance addressing environmental risks and economic risks and unveil discrepancies in applying climate-tech regulations to jurisdictions. The approach prioritizes reproducibility by utilizing open, publicly accessible data and also acknowledges limitations, including potential temporal bias, rapid technological development outpacing legal frameworks, and reliance on institutional perceptions [64].

Promote Environmental Sustainability

This section analyzes the economic costs of environmental degradation, including damage to infrastructure, loss of agricultural yields, and the need for climate adaptation and mitigation strategies. It addresses laws and regulations that promote economic growth while maintaining environmental conservation. It is concerned with policy frameworks that ensure economic growth, stability, and sustainability, as well as ensuring sustainable development through industry regulation by governments [65]. This segment explores the interplay between technological innovation, governance policy, and the achievement of the United Nations’ Sustainable Development Goals, as seen in Figure 3. It expounds how technology is used to enable governance policy in managing poverty, inequality, and environmental sustainability issues. This section explains how digital technologies, including artificial intelligence, can promote environmental sustainability. This is evident in their role in reducing resource consumption, improving energy efficiency, and adopting sustainable practices across various industries, including renewable energy, waste management, and smart agriculture [66]. This section discusses the relationship between legal systems, technological innovation, and governance. It highlights how the law governs the application of new technologies to ensure they are used ethically and in line with sustainability goals. It is crucial at this juncture to develop policies that harness technology for the public good while upholding environmental and economic standards [67].

4. Results, Analysis, and Discussion

4.1. Developments in Technology Governance Worldwide

This display illustrates critical global trends in digital governance, with a particular focus on the rapid evolution of legislation [68]. Over 60 countries have implemented AI-specific law, a testament to mounting anxiety regarding ethical AI use, as 85% of organizations struggle with compliance. Current innovations blend AI, blockchain, and IoT into environmental regulation for real-time tracking and automated compliance. Adaptive policymaking, enforcement through smart contracts, and digital participatory platforms are some of the key developments. These developments enhance resilience to climate but are constrained in scalability, equity, and harmonization of regulations across boundaries, as shown in Table 3. Data privacy has increased significantly, with 137 nations now having legislation in place. GDPR enforcement remains stringent, with fines exceeding EUR 4.5 billion, while cybercrime costs are projected to reach USD 10.5 trillion by 2025. Mistrust in data handling (68%) and the need for stricter online moderation (52%) indicate the need for balance. As corporations invest billions in compliance, estimated to be over USD 20 B, regulatory sandboxes are emerging as a multi-purpose policy tool in over 30 jurisdictions [69]. The findings are predictable through thematic narratives rather than statistical analysis in an attempt to provide rich, contextual understandings of innovative governance systems. The qualitative approach is in tune with our theoretical concern since it allows us to explore how digital technology is linked with environmental policies across different institutional contexts. Policy briefs, studies, and expert interviews, filtered through institutional and stakeholder considerations, identify best practices and implementation issues that are not possible to determine from quantitative evidence. The narrative distills such anecdotes into practical policy lessons of conceptual integrity.

4.2. National Approaches to Digital Policy and Enforcement

This graph compares how major economies are conceptualizing digital governance. The EU leads with its AI Act and Digital Services Act, which lay down strict AI risk classifications and platform liability, as shown in Table 4. The US is moving towards a federal privacy statute to replace incoherent state laws, while China demands data localization and AI alignment with state ideology [72]. India’s proposed Digital India Act aims to update outdated IT legislation, while also keeping a watchful eye on intermediary liability and online security. Such environments reflect regional tendencies: the EU’s rights-focused approach, US market-driven policies, China’s state guidance, and India’s innovation–control balancing act [80].

4.3. Environmental Change and Risk

Global environmental change poses a significant threat to economic sustainability through the destabilization of ecosystems, resource depletion, and increased frequency of climate disasters, collectively undermining long-term financial stability [85]. Coastal erosion and extreme weather conditions ravage infrastructure and agricultural production, as shown in Figure 4, whereas loss of biodiversity reduces the ecosystem services crucial to agriculture and the pharmaceutical sector. The scarcity of resources such as water and productive land, in particular, heightens geopolitical tensions and the cost of production. These environmental pressures extend across global supply chains, inducing increasing insurance costs and disproportionately affecting fragile economies, which in turn can lead to recessions and exacerbate existing inequalities. Reducing these risks requires decisive policy responses, secure resource management, and global cooperation to transition towards low-carbon economies [86]. Positively mapping potential risks, Figure 4 analyzes the impact of environmental changes, such as climate change or dwindling resources, on economic stability and advises businesses and governments on how to mitigate risk and strategize.

4.4. Analysis and Discussion

The impact of global environmental change on economic sustainability is essential as it links environmental health and economic stability. Climate change, pollution, and resource depletion pose risks to various sectors, requiring robust policies for adaptation and mitigation [87]. The following sections give facts about this relationship. Climate change leads to extreme weather conditions, disrupting the agriculture, energy, and tourism sectors, which play essential roles in economic stability. The Paris Agreement emphasizes international cooperation in addressing climate threats, highlighting the need for green technology and financial and technical support [88]. Green technologies have the potential to create employment opportunities and foster innovation as individuals adopt environmentally friendly practices, such as renewable energy and waste management, thereby promoting economic sustainability. Even though there are upfront costs, consumer demand and policy intervention can make markets available for green products [89]. Globalization also creates opportunities for economic growth, but it poses dangers to environmental preservation, as it increases the threat of resource exploitation and pollution. Effective control over globalization is necessary to balance economic progress with environmental sustainability, necessitating stringent policies and international cooperation. On the contrary, some people believe that economic development can lead to environmental degradation, as suggested by the Environmental Kuznets Curve, which posits that early growth increases emissions before decreasing with increasing progress [90].
Global planetary environmental change, driven by climate change, pollution, and biodiversity loss, presents existential challenges to legal systems and economies worldwide. The increasing frequency of extreme climate events, erosion of natural resources, and ecosystem loss are annihilating sectors, value chains, and livelihoods, posing a risk to long-term economic stability [91]. Moreover, existing environmental law also lags behind rapid environmental change, resulting in gaps and enforcement loopholes within the existing law. When nature fails, economies are hit by the failure of supply chains, resource shortages, and rising regulatory burdens. Legal institutions, however, are often inadequately equipped to manage transboundary challenges, such as environmental contamination, uneven global regulation, and enforcement deficits. Where these dangers overlap, transformative solutions anchored in digital technology and integration of global governance are required [92].
This dialogue develops from observation to critical analysis through exploration of how digital regulation mitigates environmental-economic risks in real-world use cases: The EU’s AI Act demonstrates trends for climate-tech adoption regulation, and Singapore’s Smart Nation reveals IoT applications for urban climate resilience. Kenya’s blockchain land registries demonstrate how digital technology minimizes climate displacement in contrast to Australia’s failed blockchain energy pilot that illustrates implementation challenges. China’s emissions trading platform again demonstrates regulatory–tech interactions driving sustainability, offering collective, actionable blueprints for managing environmental risk, economic stability, and legal innovation through focused digital governance frameworks.
Such dangers are addressed by digital technology with transformative solutions. Artificial Intelligence, large datasets, and the Internet of Things also aid in climate monitoring, pollution control, and resource efficiency. Blockchain enables transparent carbon trading, and smart grids ensure the efficient consumption of energy. Technology cannot be sufficient unless backed by sound global governance [93]. Global collaboration must align policy with the Sustainable Development Goals to enable digital innovation to translate into sustainable, inclusive, and economically growth-oriented outcomes. Good governance requires striking a balance between digital innovation and environmental law, while also considering the impact of increased trade controls and incentives for green technology. Adaptive legal systems need to be adopted by decision-makers who are receptive to new environmental issues, while ensuring digital inclusion [94]. With a combination of technological innovation and intelligent regulatory systems, the world is capable of mitigating environmental risks and creating sustainable, resilient economies.
Unlike the earlier approach based on complex rules, modern regimes must strike a balance between compliance-facilitating adaptive lawmaking and technology to stimulate cooperation. For instance, satellite monitoring of pollution can be more stringent in enforcement, but control mechanisms must have stricter penalties for non-compliance. The challenge lies in maintaining the right balance between regulation and innovation, such that technological progress stimulates and does not imperil sustainable development. Policymaking must prioritize interdisciplinary collaboration in bridging technology, law, and climate goals [95]. In practice, digital technologies such as AI and IoT facilitate the mitigation of climate change and the monitoring of pollution, enabling governments and firms to make more effective progress toward their sustainability goals [96]. Their implementation is contingent upon the establishment of new legal norms, the development of safe cyberspace functionality, and capacity building in the developing world. For instance, blockchain-based carbon trading platforms require strict legal standards to prevent falling prey to spurious practices, and AI-based environmental audits must be undertaken in compliance with transparency laws. Therefore, policymakers need to bridge the gap between technological advancement and enforceable law so that such technologies can yield meaningful economic and environmental benefits [97].
The rising global environmental change, tied to climate change, pollution, and biodiversity loss, is one of the core economic sustainability risks. Environmental changes have the potential to destabilize economies through various channels. Physical risks are defined as catastrophic climatic events that result in direct loss to property and infrastructure, as well as an increase in sea levels, affecting coastal economies [98]. Transition risks are caused by governments’ transition towards low-carbon economies and the risk of stranded carbon assets. Secondly, shortages of resources, such as poor farm crop yields and water shortages, could cause supply chain disruptions, leading to rising commodity prices and social unrest, thereby undermining economic stability.
The transition to a sustainable economy, although challenging, presents opportunities for innovation and sustainable growth. Technologies such as AI and IoT enable the improved management of resources and pollution abatement, which contribute to achieving the Sustainable Development Goals. However, to combat pollution and promote sustainable approaches, effective governance and robust regulations are necessary. International cooperation is also required to manage transboundary environmental problems, and the menace of environmental change to economic resilience is intricate and urgent. Its solution requires a visionary approach that combines regulatory systems, technological innovation, and global cooperation to build sustainable and resilient economies [99].
Contemporary environmental law is undergoing a paradigm shift, with advanced digital technologies increasingly integrated into its functioning to support regulatory efficiency [100]. The most significant trend is the development of adaptive legal systems that leverage AI-driven systems of compliance and blockchain-based environmental monitoring, enabling the real-time enforcement of pollution control and carbon market policies. Symbolically, mechanisms like the EU’s Carbon Border Adjustment Mechanism demonstrate how digital instruments can both advance environmental protection and maintain economic competitiveness [101]. A significant jurisprudential trend is the judicial imposition of climate obligations, as seen in trailblazing cases such as Urgenda Foundation v. Netherlands, which obligated the state to reduce emissions. Still, loopholes in implementation persist, particularly in developing economies that lack digital infrastructure for high-level environmental governance. The built-in dynamic is to achieve robust environmental protection alongside sustainable economic growth [102]. This requires adaptive legal systems to leverage technological innovation without sacrificing equitable access to regulatory solutions, eventually promoting the achievement of Sustainable Development Goals through better-informed, more responsive environmental governance.

5. Conclusions

The research highlights that international environmental change, in terms of pollution and climate change, poses significant threats to the rule of law and economic sustainability. Emerging technologies, such as big data analytics and artificial intelligence, possess transformative abilities for monitoring environmental degradation and enhancing governance. Whereas the EU AI Act demonstrates risk-based regulation can encourage climate-tech integration, and Kenya’s blockchain initiatives demonstrate leapfrogging potential for emerging economies, Australia’s failed energy pilot demonstrates the importance of contextual appropriateness. Critically, the research identifies a growing techno–legal divide where regulatory infrastructure lags digital capability, particularly in subdomains like carbon markets and biodiversity conservation. Lastly, the digital solutions required are too feeble in themselves; they must be anchored in further system changes towards addressing the root causes of environmental degradation and further supporting equitable economic transformation. The planned Digital–Green Governance (DGG) framework provides a design for such bridging, but its actualization will depend on overcoming political and institutional hurdles to transnational cooperation. However, research indicates a critical lack of integration of such technologies with international governance institutions in the developing world. Second, judicial systems are not responding quickly enough to transboundary environmental concerns and are not using digital technologies. To achieve the Sustainable Development Goals, the study believes that a synergistic approach is necessary to strengthen international governance institutions and incorporate digital innovations into legal and economic policy decision-making. This necessitates cooperative efforts by states and innovative regulatory reforms focused on preventing environmental hazards and promoting sustainable economic development. The report underscores the need for the WHO to strengthen collaborations among governments, digital technology innovators, and legal titans to enhance early warning systems, prevent pollution, and implement SDG-compatible health policies. By utilizing evidence-based governance and advocating for stronger environmental health laws, the WHO can help bridge the gaps in equitable access to care and sustainable development.

5.1. Limitations and Trade-Offs

As much as digital technologies hold revolutionary potential for environmental-economic risk management, there are daunting limitations. The digital divide entrenches disparities, especially given developing countries’ lack of infrastructure to implement innovative solutions like AI or blockchain, which further exacerbates the disparity in climate resilience. More surveillance for environmental monitoring raises data privacy concerns and possibly conflicts with human rights regimes. Techno–legal misfits occur where law lags behind technological advancements, resulting in enforcement gaps exhibited in the slow uptake of carbon trading platforms by some regimes. Excessive dependence on technophiles also threatens to bypass the entire system policy transformation required for sustainability. Energy-consuming technologies like blockchain also have environmental costs that can negate their climate benefits. These are the trade-offs that require equitable governance that balances innovation with fairness, digital tools enhancing—instead of replacing—essential economic and legal reform.

5.2. Policy Implications

This research highlights the importance of promoting enhanced global cooperation in harnessing digital innovation to enhance environmental governance. Adaptive legal frameworks and technology-intensive solutions must be prioritized on policymakers’ agendas as an urgent matter of mitigating climate risks while fostering sustainable economic growth. A failure to consolidate these efforts can continue to perpetuate environmental degradation and economic risk.

5.3. Future Research Direction

Subsequent research should examine the convergence of AI-based digital technology with global governance systems to enhance climate resilience and economic sustainability. Studies should assess the potential of blockchain for clean carbon trade, for real-time pollution monitoring, and machine learning for climate risk assessment [103]. Legal and policy studies should research cross-border regulatory harmonization to ensure the proper enforcement of environmental law. Cross-national comparative studies of digital governance practices across different regions of the world can provide guidelines on how to pursue the Sustainable Development Goals while balancing economic development with environmental conservation.

Author Contributions

Conceptualization, methodology, writing—original draft preparation and validation, formal analysis, writing—initial draft, and resources: Z.C. and Z.L. Data curation, investigation, legal analysis, writing—original draft preparation: M.B.K.; and preparation and validation, formal analysis, writing—initial draft, and resources, and supervision, M.B.K. and L.W. Project administration, and funding acquisition. All authors have read and agreed to the published version of the manuscript.

Funding

Research on the innovative mechanism of marine economy development in the waters under the jurisdiction of the South China Sea (20180408). Open Fund Project of Shantou University Institute of Local Government Development, a Key Research Base of Humanities and Social Sciences in Guangdong Province (07423002).

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

The data supporting the findings of this study are available on request from the corresponding author.

Conflicts of Interest

The authors declare no conflicts of interest.

Abbreviations

The following abbreviations are used in this manuscript:
UNUnited Nations
WHOWorld Health Organization
SDGsSustainable Development Goals
AIArtificial Intelligence
UNEPUnited Nations Environment Programme
ICTInformation and Communications Technology
BRICSBrazil, Russia, India, China, South Africa (originally BRIC, with South Africa)
MINTMexico, Indonesia, Nigeria, Turkey (emerging economies group)
ESGEnvironmental, Social, and Governance
EUEuropean Union
OECDOrganisation for Economic Cooperation and Development

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Figure 1. Illustration of the interdependent relationship between policy, economic development, digital technology, governance regulation, and global environmental challenges and laws. Policy and economic development drive economic growth and guide societal progress, and digital technology is responsible for innovation, efficiency, and decision-making based on facts. Governance regulation provides checks and balances for effective policy implementation and accountability, collectively addressing the pressing global environmental challenges and promoting sustainability and inclusive development. This study provides a Digital–Green Governance (DGG) framework that connects worldwide environmental risks, economic resilience, and legal adaptability using digital innovation. It integrates technological facilitators, blockchain, green surveillance, regulatory mechanisms, dynamic policies, and smart contracts for conformity, and institutional drivers, SDGs, stakeholder theory, and isomorphic policy diffusion to explain the accept/dismiss option of governance. Through matching digital solutions with adaptive legal frameworks, the model addresses climate resilience, green finance, and enforcement. Based on the Technology-Organization-Environment (TOE) framework and institutional theory, it offers a holistic answer to disconnected sustainability issues, ensuring policy alignment and economic resilience.
Figure 1. Illustration of the interdependent relationship between policy, economic development, digital technology, governance regulation, and global environmental challenges and laws. Policy and economic development drive economic growth and guide societal progress, and digital technology is responsible for innovation, efficiency, and decision-making based on facts. Governance regulation provides checks and balances for effective policy implementation and accountability, collectively addressing the pressing global environmental challenges and promoting sustainability and inclusive development. This study provides a Digital–Green Governance (DGG) framework that connects worldwide environmental risks, economic resilience, and legal adaptability using digital innovation. It integrates technological facilitators, blockchain, green surveillance, regulatory mechanisms, dynamic policies, and smart contracts for conformity, and institutional drivers, SDGs, stakeholder theory, and isomorphic policy diffusion to explain the accept/dismiss option of governance. Through matching digital solutions with adaptive legal frameworks, the model addresses climate resilience, green finance, and enforcement. Based on the Technology-Organization-Environment (TOE) framework and institutional theory, it offers a holistic answer to disconnected sustainability issues, ensuring policy alignment and economic resilience.
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Figure 2. Examining the effects of global environmental change, such as climate change, on economies.
Figure 2. Examining the effects of global environmental change, such as climate change, on economies.
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Figure 3. This framework provides governments and businesses with a structured approach to address the research subject’s core issue: diminishing environmental threats to economic viability via smart digital governance innovations.
Figure 3. This framework provides governments and businesses with a structured approach to address the research subject’s core issue: diminishing environmental threats to economic viability via smart digital governance innovations.
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Figure 4. Environmental factors integrated with economic risks. This system links climate hazards, extreme weather, with financial vulnerabilities, supply chain disruptions, via the use of geospatial information, economic, and risk modeling. The system enables policymakers to visualize hotspots where nature degradation directly threatens economic stability, informing targeted mitigation efforts through virtual monitoring and adaptive management.
Figure 4. Environmental factors integrated with economic risks. This system links climate hazards, extreme weather, with financial vulnerabilities, supply chain disruptions, via the use of geospatial information, economic, and risk modeling. The system enables policymakers to visualize hotspots where nature degradation directly threatens economic stability, informing targeted mitigation efforts through virtual monitoring and adaptive management.
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Table 1. Opportunities and Challenges.
Table 1. Opportunities and Challenges.
AreaPositive Impact of DigitalizationChallenges/ConsiderationsCitations
ManufacturingIncreased efficiency, reduced wasteHardware lifecycle impacts [46]
TransportLower CO2 emissions, more innovative logisticsNeed for digital inclusion [47]
Policy and LawEnables monitoring, compliance, and transparencyRegulatory gaps, data governance issues [48]
ManufacturingIncreased efficiency, reduced wasteHardware lifecycle impacts [49]
Digital environmentalismHow it helps: Digital tools.AI ethics in climate governance [50]
Policy–technology nexusDigitalization bridges policy gaps
by providing data. 		SDG financing via blockchain-enabled green bonds [51]
Global governanceEnhances transparency, and
cross-border cooperation.		Critique of fragmented institutions in tech-driven environmental regimes [52]
Digital technology is a powerful driver of environmental sustainability, offering solutions that enhance resource management, reduce emissions, and promote environmentally friendly production practices. However, its full value depends on adaptive legal frameworks and the responsible management of both positive and adverse impacts. Integrating digital tools and facilitative laws efficiently is necessary to ensure a long-term, sustainable outcome.
Table 2. Global laws and regulations.
Table 2. Global laws and regulations.
SectionSubsectionLaws and RegulationsDescriptionCitation
Global Environmental Change and Its Economic Impacts1. Climate Change Agreements, Paris Agreement;
2. Kyoto Protocol;
3. National Environmental Protection Act EPA in the US.		These agreements and regulations address climate change mitigation, greenhouse gas emissions reductions, and promote sustainable practices to minimize economic impacts on the environment.Focuses on international and national efforts to combat climate change and their subsequent economic impacts. [58]
Governance Regulation for Environmental Protection and Economic Sustainability1. Environmental Governance Laws (EU Environmental Laws, Clean Air Act);
2. Green New Deal (in various regions).		Regulations guiding the interaction between governance structures and environmental protections ensure a balance between sustainability and economic growth.Examines policies that regulate economic activities to promote sustainability, protect ecosystems, and ensure equitable distribution of resources. [59]
Interplay between Technology, Governance, and Sustainable Development Goals1. The UN’s Sustainable Development Goals (SDGs);
2. National Development Plans (India’s Digital Governance Policy);
3. ICT for Development (ICT4D) Regulations.		Explores how technology, governance frameworks, and SDGs interconnect to foster sustainable development through policies that encourage technological innovation.Discusses how technological advancements and governance structures can drive progress towards the SDGs, ensuring social, economic, and environmental benefits. [60]
The Role of Digital Technology in Environmental Sustainability1. Digital Economy and Environmental Laws (EU Digital Strategy, China’s Green Technology Law);
2. Clean Energy Technology Regulations.		Focuses on laws and regulations that promote the use of digital technologies (e.g., AI, IoT) to reduce environmental footprints and foster sustainable energy solutions.Analyzes the role of digital technology in addressing environmental challenges by enhancing energy efficiency, smart grids, and reducing waste. [61]
The Intersection of Law, Technology, and Governance1. Data Protection and Privacy Laws (GDPR);
2. E-Government Regulations;
3. Cybersecurity Laws.		Examines the legal frameworks surrounding technology usage, data governance, and cybersecurity, emphasizing their relevance to environmental governance and sustainability.Looks at how legal frameworks governing technology and data intersect with environmental policies and governance to foster sustainability and security. [62]
This table provides a structured overview of significant international law and policy related to environmental defense, governance, and digital technology. Each part provides an overview of relevant legal structures, including climate accords, sustainability policies, and digital regulations, within the framework of overarching themes such as economic consequences and sustainable development. It offers a comprehensive explanation of how these legislations converge towards facilitating global sustainability.
Table 3. Laws governing artificial intelligence globally.
Table 3. Laws governing artificial intelligence globally.
CountriesCategoryStatisticCitation
EU.AIAI Act (Risk Classification):
22% faster climate compliance checks.		 [70]
Kenya.BlockchainDigital Land Policy:
40% reduction in dispute cases.		 [71]
EU AI Act, US Executive Order.Global AI RegulationOver 60 countries have AI-specific laws, and 85% of firms face compliance challenges. [72]
UNCTAD 2024.Data Privacy Laws137 countries have data protection laws (up from 66 in 2010). [73]
European Commission 2024.GDPR FinesEUR 4.5 billion+ in fines since 2018. [74]
Cybersecurity Ventures by 2025.Cybersecurity CostsGlobal cybercrime costs to hit USD 10.5 trillion [75]
TU 2023.Government Cyber Audits74% of governments mandate critical infrastructure audits. [76]
Stanford 2024.AI Bias Audits35% of AI audits reveal discriminatory outcomes. [77]
Deloitte, Corporate filings.Corporate ComplianceTech firms spent over USD 20 billion on compliance in 2023; 60% of Fortune 500 companies have AI ethics officers. [78]
World Bank 2023
(UK, Singapore).		Regulatory Sandboxes30+ countries testing sandboxes for AI/fintech. [79]
Definition: The Immediate implementation of international AI regulations that guide ethics, responsibility, and risk management in AI deployment. Details: Covers EU regulations (EU AI Act, US Executive Orders), bans on high-risk AI, and compliance barriers for businesses.
Table 4. Impact of digital acts.
Table 4. Impact of digital acts.
RegionRegulationFocus AreaImpact Citation
China Data Security Law, Generative AI RulesData localization, AI alignment.Requires AI to reflect core socialist values. [81]
EUAI Act, Digital Services ActAI risk tiers, platform accountabilities.Bans unacceptable risk AI, social scoring. [82]
USAAmerican Privacy Rights Act (proposed)Federal privacy standard.It would override patchwork state laws with the California Consumer Privacy Act. [83]
IndiaDigital India Act (draft)Online safety, intermediary liability.Replaces the 2000 IT Act; stricter platform rules. [84]
Definition: Discussion of how robust digital legislation (EU’s DSA/DMA) shapes markets, innovation, and user rights. Considers consequences for tech monsters, data privacy, competition fairness, and cross-border digital trade dynamics.
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Cao, Z.; Lai, Z.; Bilawal Khaskheli, M.; Wang, L. The Risk of Global Environmental Change to Economic Sustainability and Law: Help from Digital Technology and Governance Regulation. Sustainability 2025, 17, 7094. https://doi.org/10.3390/su17157094

AMA Style

Cao Z, Lai Z, Bilawal Khaskheli M, Wang L. The Risk of Global Environmental Change to Economic Sustainability and Law: Help from Digital Technology and Governance Regulation. Sustainability. 2025; 17(15):7094. https://doi.org/10.3390/su17157094

Chicago/Turabian Style

Cao, Zhen, Zhuiwen Lai, Muhammad Bilawal Khaskheli, and Lin Wang. 2025. "The Risk of Global Environmental Change to Economic Sustainability and Law: Help from Digital Technology and Governance Regulation" Sustainability 17, no. 15: 7094. https://doi.org/10.3390/su17157094

APA Style

Cao, Z., Lai, Z., Bilawal Khaskheli, M., & Wang, L. (2025). The Risk of Global Environmental Change to Economic Sustainability and Law: Help from Digital Technology and Governance Regulation. Sustainability, 17(15), 7094. https://doi.org/10.3390/su17157094

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