Pathways to innovation: How city pilots leverage digital technology to reduce carbon emissions

Technological innovation through various pathways is crucial for achieving carbon neutrality and peak carbon emissions. The Innovative City Pilot (ICP) initiative, a key effort to promote national innovation, has garnered increasing attention. However, most studies have not examined the effects of ICP on carbon emissions through diverse digital technologies. Using city-level data from 2000 to 2022, we constructed a staggered difference-in-differences (DID) model to analyze changes in carbon emissions before and after the ICP period in both ICP and non-ICP areas. The carbon emission reduction pathway of the ICP influences various forms of digital technology, which then empower local green product innovation, market-oriented innovation, and industrial innovation. The impact of ICP emission reduction through digital technology is more significant in western, first- and second-tier, sub-provincial, populous, and coastal cities. In conclusion, policymakers should tailor policies according to the action pathways of digital technology and specific city characteristics. We outline the specific pathways of green product innovation, market-oriented innovation, and industrial innovation enabled by digital technologies and provide policy recommendations for the sustainable development of China.