Breaking through ingrained beliefs: revisiting the impact of the digital economy on carbon emissions

The study develops a comprehensive causal mediation framework, grounded in an expanded structural equation model, to identify how the digital economy affects carbon emissions using big data and county-level evidence from developing countries (China). Results show the digital economy plays a pivotal role in reducing carbon emissions, robust to multiple checks and endogeneity corrections. Mechanism analysis indicates reductions occur via low-carbon technological innovation and industrial diversification. A disproportionate dominance of digital industrialization helps explain the “Digital Economy Paradox,” where highly digital regions show high emissions. The paper offers a systematic analytical perspective and new empirical evidence supporting low-carbon transformation and development.