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How does the digital economy affect urban CO2 emissions? Mechanism discussion and empirical test

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  • Ya Wu

    (Jinan University
    Jinan University
    Jinan University)

  • Yin Liu

    (Jinan University)

Abstract

China is in the midst of a transition to a digital economy (DE), where information technology will be the main driver of production. China’s potential to meet its “30.60” commitment on time is correlated with the impact of DE on urban CO2 emissions. With a focus on 279 cities between 2011 and 2019, this study employs the fixed-effect model and the intermediary effect model to experimentally analyze the effects and mechanism of the DE on CO2 emissions. The results illustrate that: (1) The U-shaped nexus of DE and CO2 emissions holds after endogeneity control and robustness tests. (2) The mechanism test discovered that the major reasons for the “U” constraints are industrial structure modification and energy efficiency. CO2 emissions can be greatly decreased by upgrading and rationalizing the industrial structure; later on, CO2 emissions rise as a result of the “energy rebound effect.” (3) According to quantile regression, areas with lower CO2 emissions have less room in their industrial structure for reducing CO2 emissions. As a result, energy structure adjustment must happen to avoid “energy rebound,” which would increase CO2 emissions. Concerning the influence, mechanism, and geographical variations in DE growth on the low-carbon urban transformation, this study offers insightful implications.

Suggested Citation

  • Ya Wu & Yin Liu, 2025. "How does the digital economy affect urban CO2 emissions? Mechanism discussion and empirical test," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(6), pages 14097-14122, June.
    • Handle: RePEc:spr:endesu:v:27:y:2025:i:6:d:10.1007_s10668-024-04502-y
    DOI: 10.1007/s10668-024-04502-y
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