How will promoting the digital economy affect electricity intensity?

The digital economy plays a critical role in changing the pattern of economic and social development and has a multifaceted impact on carbon neutrality. However, the causal relationship between digitalization and electricity intensity remains unclear and controversial. To fill this gap, this paper measures the level of the digital economy in 227 Chinese cities from 2011 to 2019. The non-linear effect and mechanism of the digital economy on electricity intensity are investigated through the panel smooth transition model. This research finds that the digital economy promotes electricity intensity and this effect shows an inverted U shape. The correlation between the digital economy and electricity intensity has been consistently positive throughout the sample observation period. According to the findings, the digital economy increases electricity intensity by encouraging the development of infrastructure and the usage of electronic items while decreasing it by encouraging a change in consumption and technological advancement. This study provides new insights and enhances the understanding of correlation between the digital economy and electricity intensity.

Automated summary

The digital economy plays a crucial role in transforming economic and social development and has a diverse impact on carbon neutrality. However, the relationship between digitalization and electricity intensity remains unclear and debatable. This study fills the gap by measuring the level of the digital economy in 227 Chinese cities from 2011 to 2019 and investigating the nonlinear effects and mechanisms of the digital economy on electricity intensity using the panel smooth transition model. The findings show that the digital economy promotes electricity intensity with an inverted U-shaped effect, indicating that it increases electricity intensity through infrastructure development and electronic item usage while reducing it through changes in consumption and technological advancements. This study provides valuable insights and improves understanding regarding the correlation between the digital economy and electricity intensity.