The Digital Economy and Urban Carbon Reduction

Abstract

As an important tool for high-quality development, the digital economy plays a key role in the low-carbon transformation of Chinese cities and implementing the "double carbon" strategy. This paper attempts to systematically examine the effects and impact mechanisms between the digital economy and carbon emissions at theoretical and empirical levels. Using panel data from 282 prefecture-level cities in China from 2011 to 2019, we analyze the impact of the digital economy on urban carbon emissions and its mechanisms of action using panel data econometric models and mediating effects. The findings show that the digital economy significantly reduces urban carbon emissions, and this conclusion still holds after a series of robustness tests, and the positive effects of the digital economy become more and more obvious over time; the digital economy can promote carbon emission reduction by optimizing the industrial structure of cities and strengthening the introduction of foreign investment. These findings confirm that the beneficial effects of the digital economy have been extended to social welfare, providing a useful reference for sustainable economic and environmental development. At the same time, the Chinese government should increase its efforts to build digital infrastructure, expand the application of digital technology and improve the industrial structure to contribute to China's low-carbon development. The research in this paper advances a deeper understanding of carbon emission reduction and the effects, mechanisms, and stages of carbon reduction driven by the digital economy.