The digital economy and power consumption: empirical analysis based on consumption intensity in China

Xiang Cheng () and Xiaohui Chen ()
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Xiang Cheng: Sichuan University
Xiaohui Chen: Yibin University

Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, 2024, vol. 26, issue 8, No 25, 19755-19777

Abstract: Abstract The digital economy has played a vital role in changing economic and social development patterns and has had a multifaceted impact on carbon neutrality. This paper strives to contribute to the existing research by analyzing the relationship between the digital economy and electricity consumption intensity and providing a comprehensive understanding of the mechanisms that influence the digital economy and energy consumption, particularly focusing on electricity consumption intensity through the construction of a theoretical model. To fulfill this objective, this study introduces the development level of the digital economy into the production function of representative power enterprise, constructs a partial theoretical equilibrium analysis framework, calculates provincial digital economy development indices for Chinese provinces from 2013–2021 using the CRITIC method, and examines the impact of the digital economy on power consumption intensity. The results show that the digital economy can reduce the intensity of power consumption. A unit standard deviation increase in the digital economy development level reduces power consumption intensity by 0.1008 standard deviations. The study also conducts a mechanism analysis with economic growth as the mediating variable, which shows that the digital economy promotes economic growth and reduces electricity consumption intensity. The moderating effect of the digital economy on power consumption is further examined using local government fiscal pressure as the moderating variable. The results show that the impact of the digital economy on reducing power consumption intensity decreases with the increase of government fiscal pressure. This study not only contributes to practical applications but also enhances our comprehension of the interplay between the digital economy and power consumption. On the one hand, the development of the digital economy can reduce power consumption, thus reducing carbon emissions and achieving low-carbon growth. On the other hand, central governments can promote the development of the digital economy by reducing the fiscal pressure on local governments through transfer payments.

Keywords: Digital economy; Power consumption intensity; Influence mechanism; Economic growth; Production function; Energy consumption; Fiscal pressure (search for similar items in EconPapers)
JEL-codes: C46 C50 E60 (search for similar items in EconPapers)
Date: 2024
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DOI: 10.1007/s10668-023-03435-2

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