How digital industries affect China's carbon emissions? Analysis of the direct and indirect structural effects

Abstract

Although the digital industry (DI) has brought lasting impetus to the Chinese economy, it has also raised concerns about the environmental impacts. Consequently, by employing the input-output method and structural decomposition analysis (SDA) method, we decompose the production structure factors of the DI on China's embodied carbon emissions into a direct structural effect and indirect structural effect of DI between 2002 and 2018. We also analyze the direct and indirect structural effects of various DIs and their influence on various sectors. The main results indicate that: (1) In generally, production structure factors related to the DI have significant negative effect on embodied carbon emissions of China from 2002 to 2017; (2) among them, the direct structural effects of DI factor exert a negative effect on China's embodied carbon emissions, but the indirect structural effects of DI contribute an increase in embodied carbon emissions of China from 2007 to 2018; (3) the direct structural effects of Electronic components factor reduce the most emissions by 246.66 Mt between 2007 and 2012; (4) the indirect structural effects of Telecommunication services factor are conducive to reducing carbon emissions from 2002 to 2018, and the digital service of non-DI is more conducive to China's carbon emission reduction; and (5) high-energy-consuming sectors are most affected by the changes of production structure factors of DI. We also propose some policy implications.