The impact of artificial intelligence on the energy transition: evidence from Chinese cities

Juan Xu, Yu Chen, Nan Yang and Shuai Shao

World Development, 2025, vol. 195, issue C

Abstract: Climate change and energy issues have important implications for the future of the planet. The energy transition plays a vital role in addressing the global energy and climate crisis, while artificial intelligence (AI) is a core driver of this transition. On the basis of data from 262 Chinese cities between 2006 and 2019, a comprehensive city-level index for AI is constructed, and the impacts of AI on the energy transition and the corresponding mechanism are explored. The results suggest that AI significantly promotes the energy transition, and the promotion effect is greater in resource-based cities and central and eastern cities at the city level, as well as in strategic emerging industries and capital-intensive industries at the industry level. Regarding the influence mechanism, AI development can improve the energy transition by promoting green technology innovation and digital transformation. However, importantly, at higher levels of AI development, risks such as the energy rebound effect could arise. In this case, excessive investment and use of electricity may counteract the increase in the energy transition. Thus, while acknowledging AI’s pivotal role in the energy transition, it is equally critical to be aware of potential risks.

Keywords: Artificial intelligence; Energy transition; Composite index; Cities; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:wdevel:v:195:y:2025:i:c:s0305750x25002116

DOI: 10.1016/j.worlddev.2025.107126

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