In an article published in the journal Carbon Research, author Gengquan Zhang examines the critical role that digital transformation plays in enhancing urban environmental performance. By analyzing data from 259 Chinese cities between 2015 and 2022, the research demonstrates that the digital economy is not merely a tool for financial growth but a vital driver for green and low-carbon transformation. As cities integrate information technology into their core operations, they become significantly more efficient at managing their carbon outputs, providing a scalable pathway toward meeting global climate governance goals.

The findings reveal that the digital economy improves carbon efficiency through two primary strategies: source control and stock reduction. By replacing physical, high-energy activities with digital alternatives—often referred to as dematerialization—cities can reduce material consumption and travel-related emissions at the source. Simultaneously, digital tools allow for better monitoring and reabsorption of existing emissions. The empirical results show that for every one percent growth in a city’s digital economy, its carbon emission efficiency increases by 0.017 percent. This improvement is largely driven by the digital economy’s ability to reshape the macro industrial structure, moving the economy away from heavy-polluting sectors and toward technology-intensive and environmentally friendly industries.

A major discovery of this research is the power of industrial upgrading as a mediating path. The optimization of industrial structures was found to be the most influential factor, with a mediating effect reaching 0.490. This suggests that the digital economy’s greatest environmental contribution currently comes from shifting the overall economic makeup toward more sustainable sectors. Interestingly, the study found that the direct impact of green technology innovation at the individual enterprise level is currently quite weak, with a non-significant mediating effect of only 0.002. This indicates that, at the current stage of development, the digital economy is more effective at driving systemic, industry-wide changes than it is at forcing specific green inventions within single companies.

The research also highlights the significant spatial spillover effects created by digital growth. Digital development is not a localized phenomenon; its benefits radiate outward to surrounding areas. The study found that a one percent increase in the carbon emission efficiency of neighboring cities leads to a 0.065 percent increase in the target city’s efficiency. This geographical diffusion happens through technology spillovers, the sharing of green knowledge, and demonstration effects, where cities learn from the successful digital models of their neighbors. Over the seven-year study period, spatial clustering strengthened significantly, meaning that green digital practices are becoming more concentrated and interconnected across regional boundaries.

Furthermore, the study identifies that the type of economic growth matters immensely for the environment. When researchers broke down gross domestic product into digital and traditional categories, they found that only digital industry growth had a significant positive impact on carbon emission efficiency. Traditional industrial growth often showed an inhibitory effect, reflecting the ongoing environmental burden of legacy manufacturing and resource-intensive industries like mining. This distinction underscores the importance of pivoting toward digital industrialization and industrial digitization to ensure that economic progress does not come at the expense of the climate.

Ultimately, the results provide a robust empirical foundation for regional collaborative emission reduction policies. The study confirms that the digital economy is a powerful facilitator for green transformation, offering a “lift path” that enhances how cities produce and consume energy. By strengthening energy regulation through data collection and real-time feedback, the digital economy provides governments with the oversight needed to enforce strict environmental standards. As digital green development continues to mature, these technology-driven efficiencies will be essential for balancing high-quality economic growth with the urgent need for global carbon reduction.

Source: Zhang, G. (2026). The impact of digital economy development on carbon emission efficiency: an empirical analysis based on spatial Durbin model and mediating effect. Carbon Research, 5(16).