The green potential of the digital economy in balancing economic growth and carbon emissions

The imperative to mitigate carbon dioxide emissions is evident, given the escalating environmental challenges. The digital economy emerges as a pivotal agent for green solutions. Nonetheless, it is crucial to maintain a balance between emission reduction and economic growth, ensuring that efforts to curtail carbon output do not hinder economic development. This study aims to investigate the impact of digital economy on carbon efficiency across 287 Chinese cities from 2000 to 2021, based on benchmarks regression, threshold effect model, spatial effect regression, mechanism analysis, heterogeneity analysis, and difference-in-difference analysis. A key innovation of this study is the use of the Data Envelopment Analysis-Slack-Based Measure (DEA-SBM) model to measure carbon emission efficiency, addressing a major gap in existing research that primarily focuses on total emissions rather than efficiency. Compared with traditional efficiency measures, DEA-SBM captures the slack in both inputs and outputs, enabling a more realistic assessment of carbon efficiency under conditions of resource inefficiency and regulatory pressure in urban environments. Additionally, a structural equation model provides a multifaceted view of the digital economy's influence on carbon efficiency, moving past conventional single-pathway mediation models. Empirical results show that a 1% increase in the Digital Economy Index leads to a 0.148% improvement in carbon emission efficiency. In high-GDP regions, this effect rises sharply to 3.624%. A mediation analysis further reveals that the digital economy also indirectly boosts carbon efficiency through economic growth, contributing an additional 0.47% improvement. These findings underscore the digital economy's dual potential to foster both economic growth and carbon emissions. Based on the results, it is recommended that policymakers intensify digital economy development in undeveloped and resource-deteriorating regions, reduce taxes for green technology enterprises, and facilitate knowledge sharing from the more advanced eastern regions to enhance carbon emission efficiency.