<p>Low-carbon, green manipulations have become a global consensus in the realm of economic growth in virtue of their crucial role in environmentally sustainable development. By scrutinizing Chinese urban panel data spanning 2011–2019, we present novel findings derived from quantitative models, such as staggered difference-in-differences (DID). First, our analysis reveals that urban total factor carbon productivity (TFCP) is greatly driven by the digital economy. After undergoing robustness checks, this conclusion remains robust, even when spatial Durbin difference-in-differences model is applied for robustness testing. Second, further analysis demonstrates that in cities with high urbanization rates, cities that are not dependent on resources and eastern and central cities, the digital economy perform better in enhancing carbon productivity. Nevertheless, when it comes to western and resource-dependent cities, this impact becomes much weaker. Finally, we uncover that optimizing capital allocation and mitigating commodity market segmentation constitute the mechanisms of the realization of low and even zero carbon emissions benefiting greatly from the digital economy. We innovatively integrate the resource allocation effects of digital technology to analyze urban low-carbon development, thereby providing fresh empirical evidence.</p>