Unleashing the green potential: exploring the dynamic influence of the urban digital economy on carbon emissions

In the backdrop of “dual-carbon” strategic objectives, understanding the influence of the digital economy (DE) on carbon emissions (CEs) is imperative. However, there is limited research on the DE’s negative impact on CEs and the nonlinear relationship between the DE and CE. To address this gap, we collected data from 270 Chinese cities from 2011 to 2021 and used benchmark regression, mediated effects, and panel threshold models to explore the DE’s impact on CEs. The results showed that DE had a nonlinear, inverted U-shaped effect on CEs, with CEs initially increasing and then being suppressed. This conclusion remained consistent even after a series of robustness tests. Overall, the rate of urbanization and breadth of digital financial coverage mediate the relationship between the DE and CEs. Additionally, the combined effects of economic development, environmental regulation, fiscal decentralization, and population size contribute to the DE’s nonlinear impact on CEs. The impact of the DE on CEs varies among nonresource-based, resource-based, and resource-depleted cities and between urban and nonurban agglomerations. This paper’s findings support the development of the DE and the formulation of CE reduction policies.