Digital Pathways to Net Zero: Dissecting the Nonlinear Dynamics Between Digital Transformation and Urban Decarbonization

ABSTRACT

Effectively managing urban decarbonization in rapidly developing economies is a critical environmental governance challenge of our time. Failing to integrate digital transformation with sustainability strategies exposes structural inefficiencies in urban planning, demanding strategic foresight and institutional resolve to align economic activity with global climate targets. This study examines the dynamic, nonlinear impacts of digital transformation on urban carbon mitigation. Building on ecological modernization theory, it advances a digital ecological modernization perspective, conceptualizing information and communication technology (ICT) as both technological and institutional capital that supports data‐driven environmental governance. To provide actionable insights for environmental managers and policymakers, the empirical strategy employs advanced machine‐learning‐based models to evaluate ICT‐driven CO ₂ mitigation across a comprehensive panel of 285 Chinese cities from 2005 to 2023. The results indicate that ICT diffusion significantly and robustly mitigates CO ₂ emissions. Mechanism analysis reveals that ICT lowers emissions through three core channels: Improved energy efficiency, stronger green technological innovation, and enhanced green human capital, consistent with scale, composition, and technique effects. Furthermore, heterogeneity analysis reveals that the CO ₂ mitigation effect of ICT is stronger in high‐resource‐intensive cities; in terms of development level, ICT significantly reduces CO ₂ emissions in highly developed and emerging cities, but its mitigation effect in less‐developed cities is statistically insignificant. Although the empirical focus on China limits cross‐national comparison, it provides granular intra‐regional insights. Strategically, the findings necessitate expediting digital infrastructure in less‐developed cities to unlock mitigation potential and designing region‐specific policies that reflect local industrial structures. This study makes a significant contribution by empirically validating the digital ecological modernization framework. It demonstrates how digital transformation acts as a strategic catalyst for low‐carbon development, providing a scalable blueprint for managing urban decarbonization in emerging economies.