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Digital Economy Sectors are Key Co 2 Transmission Centers in the Economic System

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Wang, Wenhuan, Yi He, Yineng Li, Yu Lei, Hanlin Lan, and Mikael Höök. 2022. “Digital Economy Sectors Are Key Co 2 Transmission Centers in the Economic System.” SSRN Scholarly Paper. Rochester, NY: Social Science Research Network (SSRN).

Rapid growth of the digital economy has created a driving force for economic development, but the massive demand for electricity from digital reforms coupled with China's coal-based power generation has created a significant CO 2  emission problem that cannot be ignored. Previous studies have assessed digital economy sectors with incomplete scope and lack of carbon footprint assessment at the intermediary-side. To fill this gap, this study assesses the CO 2  footprint using input-output modelling of the core industry sector of the digital economy and the industrial digitalization sector at the production, intermediary and demand sides, and identifies key CO 2  transmission centers. The results show that: (1) digital economy sectors have a very high betweenness and are important CO 2  transmission centers in the economic system; (2) digital economy sectors have very high CO 2  footprints on the production-side, the intermediary-side and the demand-side, and transmits CO 2  more through the demand-side and key transmission centers; (3) the embodied CO 2 footprints of the digital economy sectors are higher than the direct CO 2  footprints. This study suggests that the digital economy sectors can decarbonize and reduce CO 2 footprints by: (1) improving material use efficiency in the digital product manufacturing sector; (2) reducing the use of carbon-intensive energy and materials in in the digital economy sectors; (3) establishing CO 2  emission disclosure rules and incentives and penalties.

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