Researchers from the School of Economics at Shandong Technology and Business University and the Ocean University of China investigate whether digitalization can effectively drive low-carbon development in Chinese cities not only locally, but across neighboring regions. Drawing on panel data from 247 prefecture-level cities spanning 2011 to 2019, the research delves deep into the spatial dynamics of digitalization and carbon emissions, revealing how emerging technologies such as artificial intelligence, big data, digital finance, and the Internet of Things can shape urban sustainability in both direct and indirect ways. Led by Weijian Du, Yuhuan Fan, Nini Yuan, and Mengjie Li, the study provides compelling new evidence that digital transformation is not just a tech-driven trend—it’s a powerful tool in the fight against climate change.

Cities Helping Cities: Digital Spillover Effects

Unlike most earlier studies that focused only on the direct local impacts of digitalization, this research introduces a critical new dimension: the spatial spillover effect. In essence, the digital advancement of one city doesn't stay contained, it influences surrounding cities as well. By using spatial econometric models, the researchers uncover that digitalization reduces carbon emissions both within a city and in nearby areas. Strikingly, the spillover effect is often even stronger than the local one. This suggests that as cities become more digitally integrated, they share technology, knowledge, and green innovations across regions, amplifying the overall carbon reduction impact. Cities no longer operate in silos; their technological progress increasingly benefits their neighbors, making regional collaboration essential for meeting carbon goals.

How Technology Cuts Carbon

The study identifies two key mechanisms through which digitalization drives down emissions: energy structure optimization and green technology innovation. Digital tools allow cities to move away from coal-heavy energy systems by enabling smarter, more efficient energy consumption. Technologies such as smart grids and digital monitoring systems reduce waste and improve the efficiency of both production and consumption. On the innovation front, digitalization encourages the development of green technologies, evidenced by a rise in green patent filings in cities undergoing digital transformation. While these innovations flourish most within digitally advanced cities, their influence often extends outward, drawing skilled talent from neighboring areas and forming regional clusters of green innovation. Thus, digitalization acts as a dual engine, transforming how energy is used and catalyzing cleaner technologies at the same time.

Why Location Matters

While digitalization shows strong carbon-cutting effects overall, its impact varies significantly across regions. The research reveals that central and western cities in China typically less advanced in digital infrastructure experience the most significant emission reductions as they adopt digital tools. In contrast, eastern cities, where digital development is already mature, see smaller marginal gains. Similarly, northern regions benefit more than southern ones. The study attributes this to higher coal dependency and greater heating needs in the north, which create a larger scope for digital tools to improve efficiency and lower emissions. In the south, despite higher digital maturity, natural climatic advantages and lower fossil fuel reliance may lessen the observable impact. These findings point to the need for regionally tailored policies that match local conditions with appropriate digital strategies.

Policy Directions for a Smarter, Greener Future

The policy implications of the study are both ambitious and actionable. First, governments should invest heavily in digital infrastructure, especially in less-developed regions where the carbon reduction potential is still high. Building out broadband access, smart grids, and digital finance platforms lays the groundwork for future efficiency gains. Second, digital integration between cities must be strengthened. By promoting interoperability, data sharing, and inter-city collaboration, governments can magnify the spillover benefits observed in the study. Third, policies should be regionally differentiated. In advanced urban centers, the focus should shift toward refining and optimizing digital energy management systems. In developing areas, efforts must target foundational digital transformation supported by training and public engagement. Green innovation should also be incentivized through subsidies, patent support, and industry-academia collaborations.

While the study is rooted in China’s unique socio-economic landscape, its conclusions hold global relevance. However, the authors acknowledge certain limitations. Data ends in 2019, which excludes major recent shifts such as the COVID-19 pandemic’s digital acceleration. Additionally, the study doesn't fully capture the role of sociobehavioral factors such as public acceptance of digital tools or behavioral changes in energy consumption, which could influence digitalization’s effectiveness. Future research, the authors argue, should not only extend the dataset but also explore how attitudes, habits, and community-level engagement interact with digital transformations in shaping carbon outcomes.

This research reframes digitalization not as an energy-consuming threat, but as a strategic opportunity for cities seeking sustainable growth. The vision it presents is one where data flows, smart systems, and technological innovation form the backbone of a coordinated, low-carbon urban network. As nations race to meet climate targets while navigating rapid digital shifts, the findings from China serve as both a blueprint and a beacon, showing how cities, when digitally empowered, can drive not only their own green transition but that of entire regions.