Does digital governance improve urban carbon balance? Evidence from China’s e-governance pilot

Governments worldwide are accelerating digital governance, yet its effects on urban carbon balance remain unclear. This paper argues that e-governance improves carbon balance by reducing information and enforcement frictions that would otherwise allow high-emission activities to persist. Results show that pilot cities experience significantly greater improvements in urban carbon balance than non-pilot cities, reflecting a more efficient allocation of regulatory resources rather than broad macroeconomic trends. The gains are more evident in cities with stronger internet infrastructure, more stable political incentives, and less resource-dependent economic structures. Moreover, in regions with stricter environmental enforcement, higher public environmental concern, and greater green innovation capacity, the effect is amplified, indicating that digital governance reinforces existing regulatory and societal pressures. Spatial spillover evidence further shows that the improvement extends beyond treated cities, fostering regional advancement. The study identifies an institutional channel through which information capacity shapes environmental performance, complementing existing literature that focuses mainly on technological or industrial drivers.