How does information and communication technology affect carbon efficiency? Evidence at China's city level

Increasing carbon efficiency is a key path to sustainable development, and information and communication technology (ICT) may help realize a win-win situation for the economy and the environment. However, the existing literature on the impact of ICT on carbon efficiency is relatively shallow. Using a database of Chinese cities, this study empirically explores the role of ICT in carbon efficiency from the aspects of direct impact, mediation effect, and threshold effect. Results show that ICT significantly improves the carbon efficiency represented by single-factor and total-factor carbon efficiency. The mediation effect indicates that technological innovation, industrial structure upgrading, and external openness are effective ways for ICT to play its role. The threshold model shows that the promoting effect between the two depends on the local institutional environment. Further heterogeneity analysis shows that ICT plays a more remarkable role in promoting carbon efficiency in eastern regions. This study provides evidence for aggressively digitizing economies to shift towards a low-carbon economy. Policymakers are encouraged to consider better integrating ICTs into sustainable development strategies.