Assessing the Impact of the Digital Economy on Carbon Emission Reduction: A Test of the Mediation Effect Based on Industrial Agglomeration

As a pivotal engine of global economic growth, the digital economy provides nations with new momentum to achieve carbon neutrality. By driving inter-industry mobility and reallocation of production factors, the digital economy alters industrial agglomeration patterns, which ultimately influence carbon emissions. Understanding the intrinsic mechanisms through which the digital economy affects carbon emissions is therefore critical for both theoretical and practical significance in advancing green and low-carbon development. This study employs panel data from 278 Chinese cities (2011–2020) to investigate the mechanism by which the digital economy affects urban carbon emissions from the perspective of industrial agglomeration. Our findings indicate that the development of the digital economy significantly reduces urban carbon emissions; a one-percentage-point increase in digital economy development leads to a 0.091% decline in carbon emission intensity. Contrary to conventional expectations, however, higher levels of industrial agglomeration do not contribute to carbon reduction. Mediation analysis reveals that the digital economy enhances industrial agglomeration, which in turn weakens its direct carbon mitigation effect by approximately 6%. Furthermore, the impact varies across regions, city sizes, and industry sectors. These insights offer valuable policy implications for China’s digital transformation, industrial agglomeration optimization, and energy-saving strategies to achieve its dual carbon goals.