From Digital Trade to Climate Gains: How Global Value Chains and Carbon Pricing Drive CO2 Reductions in OECD Economies

This study examines how digital trade contributes to decarbonization within global value chains (GVCs), focusing on the roles of AI-enabled logistics, carbon pricing, and renewable energy policy. Using a monthly panel of 38 OECD economies from 2000 to 2024, we combine econometric models with machine-learning techniques to identify threshold effects and conditional relationships. The empirical specification includes fixed effects, interaction terms for AI-enhanced logistics, and carbon-pricing threshold analysis. At the same time, structural equation modelling (SEM) is used to assess mediation through renewable energy and regulatory stringency. The results indicate that GVC participation is significantly associated with lower CO2 emissions (β = −0.064, p < 0.01). Digital trade alone is not statistically significant (β = −0.030), but its environmental effect becomes stronger when combined with AI-enhanced logistics. We identify a carbon-pricing threshold of USD 40 per tonne, above which emissions decline significantly (Δ = −15%, p < 0.01). Renewable energy adoption further reinforces the beneficial effect of digital trade under stronger regulatory conditions. These findings suggest that the emissions effects of digital trade are conditional rather than uniform and depend on complementary policy, technological, and energy factors. While the analysis is limited to OECD economies and monthly aggregate data, the study helps explain mixed findings in the literature by identifying the conditions under which digital trade is more likely to support emissions reduction.