Transforming energy for sustainability: The digital economy's role in reducing industrial hazards

The digital economy, emerging as a new energy source, is driving the transition to green and sustainable urbanization through its significant enabling effects. While the digital economy enhances productivity, replaces traditional energy, and has the potential to transform production models, further investigation is needed to understand its impact on reducing industrial hazards. This article addresses this gap by acknowledging the transformative impact of digital technologies on economic activities, based on the latest expanded EKC theory. The study highlights the energy efficiency of digitalization as a crucial mechanism for reducing industrial hazards. It also highlights a wealth effect associated with the digital economy that may increase pollution, thereby expanding on the Environmental Kuznets Curve Theory. To clarify the interplay of these effects, the study employs a multidimensional estimation method to analyze the dynamic impact of the digital economy on reducing industrial hazards. Empirical estimates indicate a weak causal relationship between the digital economy and sulfur dioxide emissions, with an increase in broadband subscribers having a slight negative effect on emissions reduction. In contrast, the expanding scientific industry significantly reduces emissions, with reductions ranging from −0.535 to −1.423 tons per billion RMB of output (or 1400 million US dollars). Increased gas supply and Foreign Direct Investment (FDI), often tied to energy-intensive industries, positively influence emissions, with FDI showing a significant coefficient of 0.004. The digital economy's impact on industrial wastewater discharge is unclear, but the scientific industry demonstrates a significant negative effect, with coefficients from −2.501 to −2.819 tons per unit output. The most significant finding of this empirical research is that the wealth effects from the digital economy, particularly through increased private sector employment, lead to a substantial rise in wastewater discharge. While digital technology can enhance energy efficiency and optimize production processes, it also encounters challenges such as job displacement and resistance to change. The research promotes sustainable industrial practices, incentivizes digital adoption, and mitigates negative impacts, guiding companies and investors toward improved environmental performance and responsible digital consumption while fostering public awareness of sustainability challenges. The study recommends a comprehensive strategy to address the environmental challenges posed by the digital economy. Policies include implementing population control measures to reduce overall human impact on the environment, promoting eco-friendly education to foster sustainable practices, shifting focus toward quality living overconsumption, and developing sustainable residential planning.