Digital Economy as a Moderator: Examining the Impact of Economic Development on Carbon Emissions

Tianfeng Lu; Yi Lu

doi:10.54691/35hmex56

Authors

Tianfeng Lu
Yi Lu

DOI:

https://doi.org/10.54691/35hmex56

Keywords:

GDP Per Capita; Carbon Emission; U-Shaped Environment Kuznets Curve (EKC); Digital Economy; Consumption Upgrade; Urbanization Proces.

Abstract

Under the Paris Climate Accord, China has pledged to reduce carbon emissions by 2030 to help limit global temperature rise within 2°C. Using panel data for 2011–2019 and system GMM estimation, this study examines the Environmental Kuznets Curve (EKC) in the Chinese context and identifies both the direct and moderating effects of the digital economy. The results show that (i) the digital economy exerts a direct mitigating effect on carbon emissions, yet its interaction with GDP per capita is positive, indicating that in more digitalized regions the marginal impact of economic growth on emissions is stronger; and (ii) the relationship between GDP per capita and carbon emissions is U-shaped, with most regions situated on the rising limb, which explains the overall increase in emissions associated with GDP growth during the sample period. These findings suggest that the inverted-U EKC is not universally applicable, and that consumption upgrading and urbanization are key mechanisms driving emission dynamics. Therefore, achieving the Sustainable Development Goals requires policies tailored to development stages and regional heterogeneity. Aligning digital transformation with green growth is essential to balance economic advancement, evolving consumption, and environmental sustainability on China’s path to low-carbon development.

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