How does digital economy affect synergy of carbon mitigation and pollution reduction? Evidence from next-generation internet demonstration city construction in China

Promoting the synergy of carbon mitigation (CM) and pollution reduction (PR) (SOCMPR) is crucial for sustainable development, and digital economy creates new opportunities for achieving the synergy of CM and PR (SOCMPR). Therefore, we use a difference-in-differences (DID) model to investigate the effects of the next-generation internet demonstration city (NGIDC) on carbon emissions and air pollutants based on panel data of 281 Chinese cities from 2010 to 2020. Empirical results demonstrate that the NGIDC policy can promote SOCMPR. Through mechanism analysis, we find that technological innovation, entrepreneurial activities, and economic agglomeration are effective approaches for the NGIDC policy to boost SOCMPR. Furthermore, the NGIDC policy’s impact on SOCMPR differs by regions, being pronounced in eastern and large cities. Finally, we discover that the NGIDC policy has considerable spatial spillover effects. The ramifications of our findings for policymakers are significant as they may better utilize digital economy to accomplish the sustainable development goals (SDGs).