The impacts of digital value chain embeddedness on trade-related carbon emissions intensity

Abstract

Objective: Digitalization supported by digital technology presents a potential solution for improving the efficiency of resource utilization. However, the impacts of digitalization on trade-related carbon emissions intensity have not been studied systematically.Methods: Based on panel data of 41 countries and regions over the period 2000–2014, this study examines how different types of digital value chain embeddedness can affect carbon emissions intensity using a semi-parametric partially linear model.Results: Research findings indicate that there is an inverted U-shaped relationship between digital domestic value chain embeddedness and carbon emissions intensity embodied in domestic trade; only when digitalization reaches a threshold of approximately 0.88, does the effects on carbon emissions intensity become negative. In addition, the impacts of digital global value chain embeddedness on carbon emissions intensity embodied in import trade and export trade are recognized as being non-linear; the thresholds of digitalization are approximately 0.1 and 0.3 for import trade and approximately 0.03 and 0.21 for export trade. Although participating in global value chains is conducive to accelerating digital technology diffusion, the actual environmental effects are constrained by a country’s absorptive capacity and high economic system complexity. Compared with developed countries, developing countries lag behind in entering the downward stage of the inverted U-shaped curve, thereby gaining environmental benefits from digital value chain embeddedness. Moreover, in terms of utilizing digital value chain embeddedness to improve energy efficiency, measures include optimizing trade conditions, adjusting energy structure, and increasing trade scale, which can play an active role.Value: This study sheds light on the exploration of the potential of digitalization and the facilitation of economic development in a more environmentally friendly manner.