The digital economy and the green and high-quality development of the industry—a study on the mechanism of action and regional heterogeneity

Consistently rising carbon emissions in the global economy make it more challenging to meet the goals of the Paris climate agreement. Knowing what factors play a role is essential to help shape strategies to reduce carbon emissions. While there is a wealth of material on how GDP expansion correlates with increases in carbon emissions, little is known about how democracy and renewable energy could improve environmental conditions in developing nations. The purpose of this article was to use fair data to assess the effect of renewable energy and green technology advances on carbon neutrality in 23 provinces across China from 2005 to 2020. The research used the dynamic ordinary least square, the fully modified ordinary least square, and the two-step GMM to determine that digitalization, industrial development, and health expenditures result in lower carbon emissions. Urbanization, tourism, and per capita income in certain Chinese provinces also drove carbon emissions. The study also showed that the impact of these factors on carbon emissions varies depending on the amount of economic growth. Environmental pollution is reduced due to the digitalization of tourist and healthcare costs, industrial development, and urbanization. According to the study’s findings, we advise these nations to seek economic growth and invest in health care and renewable energy initiatives.