Appraising the role of the digital economy in global decarbonization: A spatial non-linear perspective on globalization

Abstract

In the context of globalization, the role of the digital economy in carbon emissions may generate spatial spill over effects. This study comprehensively applies a spatial model to understand the nexus between the digital economy and carbon emissions in 67 economies from 2010 to 2019. Specifically, this study contributes by introducing a spatial panel threshold model, which helps to present the new evidence regarding decarbonization process. Empirical findings exemplify that the digital economy remarkably reduces local carbon emissions, with the positive spatial spill over effects being salient. The spatial moderating effect model uncover that globalization positively affects the nexus between the digital economy and carbon emissions. Interestingly, the spatial panel threshold model designates that the digital economy's reduction effect on local carbon emissions will be tightened, whereas the positive spatial spill over effects turn negative only when globalization surpasses a threshold. Our model has the potential to explain some results that traditional models cannot reach.

Keywords: Carbon emissions; Digital economy; Globalization; Spatial panel threshold model; Spatial spill overs.