The rapid development of green data centers in China has raised concerns regarding their actual contribution to urban energy sustainability. Leveraging a panel dataset of Chinese cities from 2011 to 2022, this study provides the first causal evidence on how green data center construction (GDCC) shapes urban energy performance. Using a series of strengthened identification strategies, we show that GDCC leads to a significant improvement in cities’ green total factor energy efficiency (GTFEE). Mechanism analyses reveal that GDCC promote GTFEE primarily by stimulating green technological innovation and advancing industrial structure upgrading. The effects are markedly stronger in cities with greater fiscal capacity, higher energy demand, and in non–resource-based cities, underscoring the importance of local economic and structural conditions in shaping policy effectiveness. These findings highlight the vital role of green data centers in accelerating China’s low-carbon transformation and provide actionable insights for designing digital-infrastructure policies that support sustainable energy transitions. • The construction of green data centers can significantly improve urban GTFEE. • Mechanisms by which the construction of green data centers affects urban GTFEE are explored. • The heterogeneity of the effect of the construction of green data centers on urban GTFEE of different cities is discussed. • Suggestions are provided for optimizing the construction of green data centers in China.
Song et al. (2026) studied this question.