Digital governance and carbon emission reduction: Evidence from “National Pilot Policy of Information Benefiting the People” in China

Abstract

Promoting digital governance is crucial for the Chinese government's governance reform. This study utilizes panel data covering 280 cities in China to examine the influence of government digital governance on reducing carbon emissions. The "National Pilot Policy of Information Benefiting the People," implemented in 2014, serves as the quasi-natural experiment for the analysis. The study employs the difference-in-difference (DID) methodology to indicate that improving the government's digital capacity contributes to reducing carbon emissions, which is robust to several robustness tests. Government digital governance facilitates the reduction of carbon emissions primarily via three mechanisms: developing green finance, gathering green talents, and promoting green technology innovation. Enhanced digital governance by the government exerts a more pronounced effect on reducing carbon emissions in cities in the eastern region, smaller municipalities, and resource-dependent municipalities. Additionally, current policies have notably decreased carbon emissions in the pilot cities, though a lag exists in the policy spillover effect affecting neighboring cities. This study investigates the influence of government digital governance on reducing carbon emissions through the lens of digital transformation. It offers valuable empirical insights for enhancing the governance capabilities of the Chinese government in the new era and facilitating the achievement of carbon reduction targets in urban areas.