Does digital technology promote carbon emission reduction in the service industry: Economic logic and empirical evidence from China

Digital technology enables the service industry to develop rapidly, which also brings about the increase of carbon emissions in the service industry (CESI). How to better integrate the service industry into China's carbon emission reduction model has become an important content that the Chinese government needs to pay attention to. This paper uses the industry-level panel data of the service in 30 provinces of China from 2008 to 2019 to examine the relationship between the degree of digital technology and CESI through theoretical and empirical methods. The results reveal that there is an inverted U-shaped relationship between digital technology and CESI, and the effect of digital technology on curbing CESI is limited. Furthermore, the pilot policy of carbon market reduces CESI by 173.17 Mt and CESI per 10,000 people by 0.0065 Mt. Resource differences, regional differences and industrial structure differences bring about heterogeneous impacts. The Chinese government in particular, and the government established by the carbon emission reduction model should pay attention to promoting the digital transformation of the service industry to achieve the carbon emission reduction target, but the digital transformation of the service industry should be carried out in a hierarchical and orderly manner under the coordination of the government.