Environmental effects of smart city investment: evidence from China

Understanding how smart city investment influences the environment has valuable implications for increasing the environmental performance of smart cities. This study adopted spatial econometric models to explore the environmental impacts of smart city investments using data from 100 smart cities in China for the period 2014-2019. Smart city investment includes investment in information and communication technologies (ICT) and human capital. Environmental performance was measured in terms of air quality, green space and energy consumption. The results reveal that smart city investment can produce spatial spillover effects and that the environmental quality of cities is spatially correlated. ICT reduces air quality but increases green space and electricity consumption. In addition, human capital contributes to electricity conservation but does not influence air quality and green space. The impacts of smart city investments on the environment vary according to economic development level. Moreover, policy implications for the implementation of smart city investments that increase environmental performance are proposed.