Can digital economy alleviate CO2 emissions in the transport sector? Evidence from provincial panel data in China

Abstract The existing literature mainly focuses on the impact of information communication technologies on carbon emissions, but little attention has been paid to the role of the digital economy in transporting carbon emissions. This paper calculates the index of the digital economy through the entropy weight Technique for Order Preference by Similarity to an Ideal Solution (TOPSIS) method and constructs the panel data of 30 provinces in China from 2008 to 2017. By extending the Stochastic Impacts by Regression on Population, Affluence and Technology model, this study explores the potential linear and non‐linear relationship between digital economy and carbon emissions in the transport sector. Empirical results show that the digital economy has the alleviating effect on carbon emissions in the transportation sector, and a change in the digital economy of one unit standard deviation resulted in a 6.14% reduction in carbon emissions. In terms of sub‐regions, the digital economy has a significant negative impact on transport carbon emissions in the eastern and central regions, while it is insignificant in the western regions. This paper further investigates the threshold effect of urbanization on the relationship between the digital economy and transportation‐related carbon emissions. The digital economy accelerates the transport sector's carbon emissions in the low urbanization stage, while it reduces the carbon emissions in the high urbanization stage.