How does the digital service trade nonlinearly affect carbon emissions? Empirical evidence from G20 countries

Abstract

This study explores the nonlinear relationship between digital service trade and carbon emissions using the data of 42 G20 countries from 2005 to 2021. It is concluded that this relationship appears to be an inverted U-shape. When the digital service trade is inadequate, this exacerbates carbon emissions. Only when the digital service trade is above this point does it become beneficial to environmentally sustainable development. Mediation analyses indicate that the digital service trade increases carbon emissions by increasing emissions from digital infrastructure and decreases them by optimizing the industrial structure and adopting low-carbon technologies. Furthermore, the nonlinear association is moderated by human capital. When human capital is insufficient, it is harder for the digital service trade to curb carbon emissions. Accordingly, this study is helpful to develop the digital service trade and achieving the goals of carbon peak and neutralization and the sustainable growth of the environment.

Keywords: Carbon emissions; Digital service trade; Human capital; Mediation analysis; Moderation analysis; Nonlinear framework; Sustainable development.