From digital villages to cleaner skies: how rural digitalization transforms environmental governance in China

Rural environmental governance remains a persistent weak link in the regulatory systems of developing countries, where state capacity is constrained and pollution sources are dispersed. This study examines whether rural digitalization can mitigate this regulatory deficit and thereby reduce air pollution across Chinese villages. Drawing on panel data covering more than 300,000 administrative villages and an instrumental variable strategy, we find that a one-standard-deviation increase in digital village development lowers PM2.5 concentrations by 3.76 percent. Three reinforcing mechanisms drive this effect: digital finance relaxes the capital constraints that impede clean energy adoption; digital agriculture curbs fertilizer overuse through precision farming platforms; and digital governance strengthens environmental monitoring and enforcement in historically under-regulated jurisdictions. Monetizing the resulting reduction in mortality risk within a value-of-statistical-life framework, we estimate that the associated health benefits for China’s rural population amount to USD 18.6–64.6 billion. These findings reframe rural digitalization as a multi-channel governance instrument rather than merely a development tool, and they underscore the need for policymakers to incorporate environmental externalities into cost–benefit evaluations of digital infrastructure investment.