Myth of the digital economy: Can it continually contribute to a low-carbon status and sustainable development?

Abstract

Facing global warming and looming catastrophic climate change, many countries have launched actions to change themselves and their societies to attain a low-carbon status. Digital economy purportedly offers a potential way to achieve sustainable development. However, this is still debated and a consensus is elusive. Here, we propose a novel nonlinear d curve hypothesis to describe the relationship between the digital economy and carbon emissions, whereby the digital economy can no longer contribute to carbon abatement once it is overdeveloped because of a rebound in energy consumption (i.e., the overdevelopment trap). To test this hypothesis, we used county-level panel data from China and conducted an empirical analysis with expanded STIRPAT models. Through a suite of robustness tests, we find evidence supporting our hypothesis, in that nearly 30 % of our samples (N = 1450 counties) had stepped into the overdevelopment trap, with this problem being most severe in eastern China. Altogether, we believe those countries relying heavily on thermal power—and more likely to suffer from a rebound in fossil energy consumption—should take a more cautious attitude towards implementing their digital economy and consider other ways to meet their carbon abatement goals.