*Article* **Digitalization, Electricity Consumption and Carbon Emissions—Evidence from Manufacturing Industries in China**

**Qian Zhang and Qizhen Wang \***

Business School, Nanjing Xiaozhuang University, Nanjing 211171, China

**\*** Correspondence: wqz@njxzc.edu.cn

**Abstract:** The development of China's manufacturing industry is constrained by factors such as energy and resources, and low-carbon development is arduous. Digitalization is an important method to transform and upgrade traditional industries. Based on the panel data of 13 manufacturing industries in China from 2007 to 2019, a regression model and a threshold model were used to empirically test the impact of digitalization and electricity consumption on carbon emissions. The research results were as follows: (1) The digitalization level of China's manufacturing industry was steadily increasing; (2) The proportion of electricity consumption in China's manufacturing industries in the total electricity consumption hardly changed from 2007 to 2019, basically maintaining at about 6.8%. The total power consumption increased by about 2.1 times. (3) From 2007 to 2019, the total carbon emissions of China's manufacturing industry increased, but the carbon emissions of some manufacturing industries decreased. (4) There was an inverted U-shaped relationship between digitalization and carbon emissions, the higher the level of digitalization input, the greater the carbon emissions of the manufacturing industry. However, when digitalization develops to a certain extent, it will also suppress carbon emissions to a certain extent. (5) There was a significant positive correlation between electricity consumption and carbon emissions in the manufacturing industry. (6) There were double energy thresholds for the impact of labor-intensive and technology-intensive manufacturing digitalization on carbon emissions, but only a single economic threshold and scale threshold. There was a single scale threshold for capital-intensive manufacturing, and the value was −0.5352. This research provides possible countermeasures and policy recommendations for digitalization to empower the low-carbon development of China's manufacturing industry.

**Keywords:** digitalization; electricity consumption; carbon emissions; manufacturing industries

### **1. Introduction**

Under the goal of carbon neutrality, traditional high-carbon emission industries such as steel and cement have received greater attention, but the digital economy is becoming a new driving force for the high-quality development of China's economy and plays a very important role in carbon emission reduction. In 2020, the total scale of China's digital economy reached 39.2 trillion yuan, with a growth rate three times that of China's GDP and a contribution of 38.6% to GDP. As a new mode of production, digital technology will help China achieve the goals of carbon peaking and carbon neutrality and at the same time, provide fast funding channels for the development of low-carbon cities [1]. Although the development of China's digital economy is showing a steady upward trend, there is still a phenomenon of regional development imbalance [2].

China is experiencing an unprecedented process of digitalization and modernization, and its manufacturing industry is also speeding up adjustment, optimization, and upgrading. In 2021, the added value of China's manufacturing industry was 31.4 trillion yuan, accounting for nearly 30% of the world's total. The energy utilization rate industry continued to rise. The comprehensive energy consumption of steel and other units has dropped by more than 9% compared with 2012. Digitalization and manufacturing are

**Citation:** Zhang, Q.; Wang, Q. Digitalization, Electricity Consumption and Carbon Emissions—Evidence from Manufacturing Industries in China. *Int. J. Environ. Res. Public Health* **2023**, *20*, 3938. https://doi.org/10.3390/ ijerph20053938

Academic Editors: Taoyuan Wei and Qin Zhu

Received: 5 February 2023 Revised: 20 February 2023 Accepted: 20 February 2023 Published: 22 February 2023

**Copyright:** © 2023 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/).

integrated and developed, and the energy efficiency of infrastructure is also continuously optimized. From 2007 to 2019, the level of digitalization in China's manufacturing industry steadily increased (See Figure 1 for more details). tegrated and developed, and the energy efficiency of infrastructure is also continuously optimized. From 2007 to 2019, the level of digitalization in China's manufacturing industry steadily increased (See Figure 1 for more details).

dropped by more than 9% compared with 2012. Digitalization and manufacturing are in-

*Int. J. Environ. Res. Public Health* **2023**, *20*, x FOR PEER REVIEW 2 of 22

**Figure 1.** Digitalization level of China's 13 manufacturing industries in 2007 and 2019 (%). **Figure 1.** Digitalization level of China's 13 manufacturing industries in 2007 and 2019 (%).

An important path in achieving carbon emission reduction is transforming the energy industry. In 2020, carbon emissions from national energy consumption accounted for 85% of total carbon emissions, and those from the power sector accounted for 40% of the total. The digital economy mainly empowers the energy sector at three levels to help achieve carbon emission reduction goals. First, from the perspective of the energy supply side, the trend and fluctuation of power demand can be monitored and controlled in realtime through digital technology to achieve the optimal allocation of resources and improve energy utilization efficiency. Second, from the perspective of the energy demand side, digital technology can monitor the disclosure of information such as carbon emissions. It is possible to measure and source carbon emissions, helping companies achieve demand-side management of carbon emissions at a lower cost. This can further improve the carbon emissions trading market. Third, from the perspective of energy trading, digital technology can solve the time and space barriers in the transaction, which can optimize the matching of the supply and demand sides and then improve the energy transactions An important path in achieving carbon emission reduction is transforming the energy industry. In 2020, carbon emissions from national energy consumption accounted for 85% of total carbon emissions, and those from the power sector accounted for 40% of the total. The digital economy mainly empowers the energy sector at three levels to help achieve carbon emission reduction goals. First, from the perspective of the energy supply side, the trend and fluctuation of power demand can be monitored and controlled in real-time through digital technology to achieve the optimal allocation of resources and improve energy utilization efficiency. Second, from the perspective of the energy demand side, digital technology can monitor the disclosure of information such as carbon emissions. It is possible to measure and source carbon emissions, helping companies achieve demand-side management of carbon emissions at a lower cost. This can further improve the carbon emissions trading market. Third, from the perspective of energy trading, digital technology can solve the time and space barriers in the transaction, which can optimize the matching of the supply and demand sides and then improve the energy transactions efficiency.

efficiency. The rapid development of China's manufacturing industry is accompanied by a large amount of energy consumption and carbon emissions. Electricity is an important source of energy and is clean, but the process of producing electricity is not. From 2019 to 2021, China accounted for almost all of the growth in global carbon emissions from the power and heat sectors. The CO2 emissions from the power and heating sector increased by 6.9% in 2021, due to a sharp increase in global electricity demand. From 2007 to 2019, the proportion of electricity consumption of China's manufacturing industries in the total electricity consumption hardly changed, maintaining at about 6.8%. However, the total electricity consumption of the manufacturing industry has increased by about 2.1 times, from 122.3 billion kWh to 260.4 billion kWh (See Figure 2 for details). As the world's largest carbon emitter, China is actively taking responsibility for reducing carbon emissions. "Made in China (2025)" clearly states that by 2025, the added value of carbon emissions per unit of China's manufacturing industry should be reduced by 40% based on 2015. In recent years, although the carbon emissions of some manufacturing industries have de-The rapid development of China's manufacturing industry is accompanied by a large amount of energy consumption and carbon emissions. Electricity is an important sourceof energy and is clean, but the process of producing electricity is not. From 2019 to 2021, China accounted for almost all of the growth in global carbon emissions from the powerand heat sectors. The CO<sup>2</sup> emissions from the power and heating sector increased by 6.9% in 2021, due to a sharp increase in global electricity demand. From 2007 to 2019, the proportion of electricity consumption of China's manufacturing industries in the total electricity consumption hardly changed, maintaining at about 6.8%. However, the total electricity consumption of the manufacturing industry has increased by about 2.1 times, from 122.3 billion kWh to 260.4 billion kWh (See Figure 2 for details). As the world's largest carbon emitter, China is actively taking responsibility for reducing carbon emissions. "Made in China (2025)" clearly states that by 2025, the added value of carbon emissions per unit of China's manufacturing industry should be reduced by 40% based on 2015. In recent years, although the carbon emissions of some manufacturing industries have decreased, the total carbon emissions have continued to increase (See Figure 3 for details).

creased, the total carbon emissions have continued to increase (See Figure 3 for details).

**Figure 2.** The proportion of electricity consumption in China's 13 manufacturing industries in 2007 and 2019. **Figure 2.** The proportion of electricity consumption in China's 13 manufacturing industries in 2007 and 2019. **Figure 2.** The proportion of electricity consumption in China's 13 manufacturing industries in 2007 and 2019.

**Figure 3.** Total carbon emissions of China's 13 manufacturing industries in 2007 and 2019. **Figure 3.** Total carbon emissions of China's 13 manufacturing industries in 2007 and 2019. **Figure 3.** Total carbon emissions of China's 13 manufacturing industries in 2007 and 2019.

This paper aimed to analyze the impact of digitalization and electricity consumption on carbon emissions in China's manufacturing industry, accurately identify the influencing factors and threshold effects of carbon emissions in China's manufacturing industry, and then choose appropriate emission reduction paths and policies to help China's manufacturing industry successfully realize digitalization and low-carbon transformation goals. Possible marginal contributions are: First, the article analyzes the industry heterogeneity of China's manufacturing industry and takes into account the spatiotemporal factors of global value chain participation. Second, the article uses the threshold model to analyze the energy, economic, and scale effects of digitalization on China's manufacturing carbon emissions. Third, the article puts forward specific countermeasures for manufacturing carbon emission reduction from the aspects of demand, supply, and transaction This paper aimed to analyze the impact of digitalization and electricity consumption on carbon emissions in China's manufacturing industry, accurately identify the influencing factors and threshold effects of carbon emissions in China's manufacturing industry, and then choose appropriate emission reduction paths and policies to help China's manufacturing industry successfully realize digitalization and low-carbon transformation goals. Possible marginal contributions are: First, the article analyzes the industry heterogeneity of China's manufacturing industry and takes into account the spatiotemporal factors of global value chain participation. Second, the article uses the threshold model to analyze the energy, economic, and scale effects of digitalization on China's manufacturing carbon emissions. Third, the article puts forward specific countermeasures for manufacturing carbon emission reduction from the aspects of demand, supply, and transaction This paper aimed to analyze the impact of digitalization and electricity consumption on carbon emissions in China's manufacturing industry, accurately identify the influencing factors and threshold effects of carbon emissions in China's manufacturing industry, and then choose appropriate emission reduction paths and policies to help China's manufacturing industry successfully realize digitalization and low-carbon transformation goals. Possible marginal contributions are: First, the article analyzes the industry heterogeneity of China's manufacturing industry and takes into account the spatiotemporal factors of global value chain participation. Second, the article uses the threshold model to analyze the energy, economic, and scale effects of digitalization on China's manufacturing carbon emissions. Third, the article puts forward specific countermeasures for manufacturing carbon emission reduction from the aspects of demand, supply, and transaction sides.

sides. In the process of digitalization and the rapid growth of energy consumption, China's manufacturing industry is facing greater pressure in reducing carbon emissions. This sides. In the process of digitalization and the rapid growth of energy consumption, China's manufacturing industry is facing greater pressure in reducing carbon emissions. This In the process of digitalization and the rapid growth of energy consumption, China's manufacturing industry is facing greater pressure in reducing carbon emissions. This paper focuses on the relationship between digitalization, electricity consumption, and carbon

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emissions. It examines the impact of the digital economy on China's manufacturing carbon emissions and the threshold effect. Then we propose corresponding carbon emission reduction countermeasures. This paper provides theoretical and practical references for the government and enterprises. Furthermore, it has important practical significance for the development of a low-carbon society.

#### **2. Literature Review**

#### *2.1. Understanding Digitalization*

Digitalization involves digital technology and its integrated use in the production process [3]. The development of the digital economy includes two aspects. One is digital industrialization. Information technology has given birth to many new industries. The industry based on digital elements has promoted the industrial structure to be technologyintensive and environment-friendly. The second is industrial digitalization, which refers to the combination of traditional industries and digitalization, and the application of digitalization in production to promote the transformation and upgrading of traditional industries. The upgrading of industrial structures can promote the use of clean energy, replace traditional high-carbon emission energy with clean energy, and ultimately reduce carbon emissions [4]. The upgrading of industrial structures can stimulate the R&D and application of low-carbon technologies. Meanwhile, it can improve the energy structure to play a better substitution role and promote the green transformation of enterprises [5].

Digitalization has a greater impact on carbon emission efficiency. It can improve carbon productivity, and its impact on the central and western regions of China is significantly greater than that on the eastern regions. Furthermore, it mainly affects carbon productivity through technological innovation and industrial structure optimization and upgrading [6]. The promotion effect of digitalization on carbon emission reduction shows a trend of increasing with time and has a positive spatial spillover effect. Digitalization is becoming one of the new sources of energy to improve green development. With the technology accumulation, the coefficient of the impact of digitalization on total factor carbon productivity is getting higher and more significant [7].

However, the carbon-reducing effect of digitalization is controversial. Some scholars [8–10] believe that digitalization has a carbon emission reduction effect, while others [11,12] believe digitalization can promote carbon emissions. Therefore, we will discuss these questions in the next section. The topics are divided into the decoupling of digitalization and carbon emissions, the uncertainty of digitalization and carbon emissions, the relationship between digitalization and manufacturing carbon emissions, the specific path to realize digital carbon emission reduction, and finally puts forward the *hypotheses* that this paper wants to test.
