The carbon emission reduction effect and mechanism analysis of digital economy: Evidence of prefecture-level cities in China

Abstract

ABSTRACT This study investigates the impact and mechanisms of carbon emission reduction associated with digital economy development, utilizing data from 265 prefecture-level cities in China during the period of 2003 to 2019. The comprehensive index of digital economy development at the prefecture level is evaluated using the entropy method, followed by empirical analysis employing the dual fixed effect model. The findings confirm a significant improvement in urban carbon emission reduction resulting from the digital economy. Mechanism analysis reveals that the digital economy enhances the carbon emission reduction effect in cities by promoting urban green innovation and reducing energy consumption intensity. Additionally, heterogeneity analysis demonstrates that the carbon reduction effect of digital economy development is influenced by factors such as city location, population size, and development type. By shedding light on the relationship between the digital economy and carbon emission reduction, this study offers valuable insights into the mechanisms through which the digital economy contributes to sustainable urban development.