The impact of digital economy on carbon emissions: Insights from the G-20 energy transition and environmental governance

Abstract

This study investigates the impact of digital economy on carbon emissions and energy transition, focusing on G-20 countries and Chinese cities from 2008 to 2021. Using data from 276 Chinese cities, we employ an IV-GMM regression model to assess the role of digital economy in addressing the energy trilemma—balancing sustainability, energy security, and affordability. The findings reveal that while digital technologies enhance energy efficiency and facilitate the shift towards low-carbon industries, and also increase overall energy consumption due to the growing digital infrastructure. The empirical analysis has identified key pathways, such as industrial restructuring and foreign investment attraction, through which digital economy influenced the energy transition. Based on these results, we recommend that G-20 and Chinese policymakers to promote environmental sustainability, ensure reliable energy systems, and support long-term development goals.