Synergistic dance of digital economy and green finance on carbon emissions: Insights from China

Abstract

China has recently implemented a dual-carbon strategy to combat climate change and other environmental issues and is committed to modernizing it sustainably. This paper supports these goals and explores how the digital economy and green finance intersect and impact carbon emissions. Using panel data from 30 Chinese provinces over the period 2011–2021, this paper finds that the digital economy and green finance can together reduce carbon emissions, and conducts several robustness tests supporting this conclusion. A heterogeneity analysis shows that these synergistic effects are more important in regions with low levels of social consumption Meanwhile, in the spatial dimension, the synergistic effect of the local digital economy and green finance adversely impacts the level of carbon emissions in surrounding areas. The findings of this paper provide insights for policymakers in guiding capital flow and implementing carbon-reduction policies while fostering the growth of China’s digital economy and environmental sustainability.