Influence of Digital Economy on Carbon Dioxide Emissions: History
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Contributor:
Jingwei Sun
,
Jingzhu Chen

Massive emissions of greenhouse gases, primarily carbon dioxide, are endangering not only sea level rise and extreme weather but also agricultural production and human life. Digital technologies such as big data, cloud computing, and artificial intelligence have been increasingly integrated into different commercial and social domains. The subsequent wave of the digital economy has become a massive force in transforming the traditional economic model, restructuring the global value chain, and promoting the economy’s green transformation. 

  • digital economy
  • carbon dioxide emissions
  • energy structure

1. Introduction

Carbon dioxide emissions are a global issue that everyone is dealing with. Massive emissions of greenhouse gases, primarily carbon dioxide, are endangering not only sea level rise and extreme weather but also agricultural production and human life. Although China’s carbon dioxide emissions per capita are low, the total amount is significant. China’s carbon dioxide emissions increased from 8.15 billion tons to 9.90 billion tons between 2010 and 2020, according to the World Energy Statistical Yearbook 2021, making China the world’s greatest carbon emitter. As a major responsible country, China pledged at the UN General Assembly’s 75th session in 2020 to “increase its nationally determined contributions, adopt more effective policies and measures, strive to peak carbon dioxide emissions by 2030, and strive to achieve carbon neutrality by 2060.” The Chinese Government’s 2022 Work Report emphasized the need to “orderly promote carbon peak and carbon neutrality, promote the energy revolution and low-carbon energy transformation, promote research and development and application of green and low-carbon technologies, and build a green manufacturing and service system.” This raises the question of how we move forward. How can we attain green development, a goal shared by all humanity? The digital economy appears to be a key mechanism and starting point for China to achieve this goal.
In recent years, digital technologies such as big data, cloud computing, and artificial intelligence have been increasingly integrated into different commercial and social domains. The subsequent wave of the digital economy has become a massive force in transforming the traditional economic model, restructuring the global value chain, and promoting the economy’s green transformation. According to the 2022 White Paper on China’s Digital Economy Development, China’s digital economy is thriving, with its size increasing from 2.6 trillion yuan in 2005 to 45.5 trillion yuan now. Its GDP share has increased from 14.2 percent in 2005 to 39.8 percent today. The Chinese government places a high value on the new economic drivers and benefits inspired by the digital economy. The Chinese government specifically proposed to “accelerate digital development and build a digital China” in its 14th Five-Year Plan for National Economic and Social Development and Outline of Long-Term Goals for 2035, published in 2021. The Chinese government’s 14th Five-Year Plan for Digital Economy Development, issued in 2022, emphasizes the need to “accelerate the deep integration of digital economy and real economy, as well as promote green development in the process of industrial digital transformation”.

2. The Influence of the Digital Economy on Carbon Dioxide Emissions

The digital economy refers to a series of economic activities based on digital technology, which includes using digital platforms as the main medium and digital empowerment infrastructure as an important support [1]. The current articles on the topic of the digital economy mainly pay attention to its effects on the economy and society. On the one hand, the digital economy has a significant impact on high-quality development [2], financial inclusion [3][4], global value chain [5][6] industrial structure upgrading [7][8], etc. On the other hand, the digital economy plays a favorable role in innovation and development, efficiency, and cost reduction by influencing the behavior of micro-enterprises [9][10][11]. From the existing research, there is less literature on the digital economy and carbon dioxide emissions. Barrett M et al. summarized three types of methods to reduce carbon dioxide emissions in their research of economic development and energy consumption, including the use of Information and Communications Technology (ICT) [12]. Robert analyzed the positive and negative relationship between ICT and the environment based on OECD data and made recommendations for international organizations and individuals to participate in this issue [13]. Popescu G’s study found that ICT dematerialization and efficiency improvements can reduce carbon dioxide emissions [14]. With the promotion and application of digital technology in the economy and society, digitalization, networking, and intelligence are developing rapidly. Some scholars have started to attach importance to the effect of the digital economy on the environment. Li [15] believes that the digital economy can unleash the driving force of innovation and can lower the emission of sulfur dioxide. Sun [16] and Deng [17] empirically determined that the developing digital economy can remarkably suppress the emission of environmental pollutants from multiple dimensions and that the upgrading of industrial structure is an important mechanism to promote improvement in environmental quality.
However, articles on the influence of the digital economy on carbon dioxide emissions are in the primary stage, and the few research results in this area are still controversial. On the theoretical side, the paths of the digital economy to achieve the carbon neutrality goal are mainly listed, and thoughts on the coordinated digital transformation of industries and related policy directions are proposed [18][19]. Most scholars hold a promising attitude toward the carbon dioxide emission reduction effect of the digital economy. The SMARTer2030 report released by the Global e-Sustainability Initiative shows that the world is expected to reduce global emissions by 12 GtCO2e by 2030 through ICT solutions and to promote sustainable economic growth. Empirically, it is mainly based on panel data. Moreover, tests find that the development of the digital economy can remarkably lower carbon dioxide emissions through various mathematical models and mechanism analyses [20][21]. Some papers have also examined the spatial spillover effects of the digital economy affecting carbon dioxide emissions by using spatial models [22][23].
On the other hand, there are some different conclusions. Khan [24] studied the relationship between ICT, economic growth, financial development, and environmental quality in a sample of emerging economies and found that the moderating effects of ICT stimulated carbon dioxide emissions. Zhou [25] adopted an input–output approach to develop a specific carbon analysis framework, and the result was that ICT is far from environmentally friendly, with implied carbon impacts tens of times greater than direct impacts. Nizam [26] used time series data for Pakistan from 1975–2017 to study the long-term relationship between ICT, energy demand, and carbon dioxide emissions and found that the application of ICT had an obvious effect of increasing carbon dioxide emissions.

This entry is adapted from the peer-reviewed paper 10.3390/su15118557

References

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  2. Ren, Z.; Deng, F. Digital Technology, Factor Structure Transformation and High-Quality Economic Development. Soft Sci. 2022, 1–10.
  3. Lu, M.; Wang, T. Digital Technology and Small and Micro Finance: Research on Innovation of Guarantee and Risk Transfer Mode—Application of Digital Technology in Risk Management of Small and Micro Finance in Commercial Banks. Contemp. Econ. Manag. 2021, 43, 72–82.
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  20. Miao, L.; Chen, J.; Fan, T.; Lv, Y. The Impact of Digital Economy Development on Carbon Emission: A Panel Data Analysis of 278 Prefecture-Level Cities. South China Financ. 2022, 2, 45–57.
  21. Xie, Y. The Effect and Mechanism of Digital Economy on Regional Carbon Emission Intensity. Contemp. Econ. Manag. 2022, 44, 68–78.
  22. Liu, J.; Chen, Y. Digital technology development, temporal and spatial effects, regional carbon emissions. Stud. Sci. Sci. 2022, 41, 841–853.
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