Leveraging digital service trade for a low-carbon future: The roles of network embedding, spillovers, and policy pathways

Amid the concurrent trends of global climate governance and digital transformation, digital service trade networks (DSTNs) have become instrumental in reducing carbon emissions and strengthening national competitiveness. Using panel data from 38 OECD and BRICS countries between 2010 and 2022, this study applies social network analysis to characterize the evolution of the global DSTN and empirically investigates how countries’ embeddedness within this network—conceptualized as participation and dominance—affects carbon emissions. The results demonstrate that deeper network embeddedness significantly mitigates emissions, with a one-unit increase in participation reducing emissions by 0.2 %–0.3 %, and a comparable rise in dominance leading to a reduction of 0.3 %–0.8 %. The carbon emission reduction effects exhibit spatial and temporal heterogeneity among OECD countries and in the pre-pandemic period. Further quantile regression results show that this effect is nonlinear. Mechanism tests reveal two distinct pathways through which embeddedness operates—participation fosters industrial scaling, whereas dominance promotes optimization of the energy structure, with synergistic effects further enhancing the reduction in emissions. Spatial econometric models also confirm significant positive spillovers, reducing emission intensity in neighboring economies by 0.6 %–24.8 %. This study proposes a digital-green synergy framework for climate governance, underscoring the importance of harmonized digital trade policies, facilitated technology diffusion, and integrated low-carbon value chains to advance global carbon neutrality.