Analysis of the Impact of the Digital Economy on Carbon Emission Reduction and Its Spatial Spillover Effect—The Case of Eastern Coastal Cities in China

Abstract

The expansion of the digital economy is crucial for halting climate change, as carbon emissions from urban energy use contribute significantly to global warming. This study uses the Difference-in-Differences Model and the Spatial Durbin Model determine whether the digital economy may support the development of reducing carbon emissions and its geographic spillover effects in Chinese cities on the east coast. In addition, it looks more closely at the effects of lowering carbon emissions in space by separating them into direct, indirect, and spatial impact parts. The findings show that (1) from 2012 to 2021, the digital economy favored carbon emission reductions in China’s eastern coastline cities, as supported by the robustness test. (2) The link between digital economy growth and carbon emissions is highly variable, with smart city development and urban agglomeration expansion both cutting city carbon emissions considerably. Successful digital economy strategies can lower CO2 emissions from nearby cities. (3) Eastern coastal cities have a considerable spatial spillover impact, and the digital economy mitigates local energy consumption and carbon emissions while simultaneously enhancing environmental quality in nearby urban areas. This analysis proposes that the peak carbon and carbon neutrality targets can be met by increasing the digital economy and enhancing regional environmental governance cooperation.