Structural effects of provincial digital economy on carbon emissions within China: A multi-region input-output based structural decomposition analysis.

ABSTRACT

The digital economy, serving as a new engine to boost China's economic growth, inevitably affects carbon emissions given both its green features and its potential demands for energy inputs. To investigate the province-level impacts of the digital economy on carbon emissions, this study splits the digital industry from the multi-regional input-output table, and adopts a downscale structural decomposition analysis to reveal the technological, structural, and scale effects of the digital economy on carbon emissions. The results show that (1) the expansion of digital economy increased 186.3 Mt of carbon emissions at the aggregate level during the investigated period (2012-2017) and that, therefore, the direct structural effects of the digital economy played a leading role in emission reduction (-156 Mt); (2) in terms of heterogeneity, most provinces presented a U distribution with the structural mitigation effect at the bottom and highly-developed provinces generated significant negative spillover effects; (3) from a regional coordination perspective, digital production achieved greater carbon emission reductions in the eastern and western areas of the country, while the northeastern and central regions gained environmental benefits via digital applications. The main conclusions thus enhance existent understanding of China's digital economy and low-carbon development, and the paper also proffers corresponding policy recommendations, e.g., accelerating the convergence of digital economy and traditional industries to promote carbon emissions reduction.