Does e-commerce development reduce carbon emissions? Empirical analysis based on spatial durbin difference-in-difference model

• Quasi-natural experiment of the national e-commerce demonstration cities is used. • 249 prefecture-level cities from 2003 to 2019 are analyzed. • Time-varying difference-in-difference model is used. • The effect of e-commerce on carbon emission and its impact mechanism are investigated. • E-commerce can reduce urban carbon emissions by optimizing industrial structure. The development of the circular economy is key to achieving the “carbon peaking and carbon neutrality” goals. E-commerce is closely linked to the circular economy and carbon emissions. This study investigates the relationship between e-commerce and carbon emissions based on the quasi-natural experiment of China’s national e-commerce demonstration cities. Using the data of 249 prefecture-level cities from 2003 to 2019, we use a time-varying Spatial Durbin Difference-in-Difference model to test the effect of e-commerce on carbon emission and its impact mechanism. The baseline results show that the development of e-commerce reduces local carbon emissions while increasing carbon emissions in surrounding cities. The mechanism analysis suggests that the development of e-commerce reduces local carbon emissions by optimizing the local industrial structure, enhancing local technological innovation, and promoting reliance on online shopping. Parallel trend tests and a series of robustness checks further validate the correctness of the baseline regression. Heterogeneity analysis reveals significant regional and endowment differences in the carbon emission effects of e-commerce development. In both eastern and central/western cities, the development of e-commerce reduces local carbon emissions and increases carbon emissions in surrounding cities. However, the carbon reduction effect of e-commerce development is more pronounced in eastern cities. Additionally, developing e-commerce in non-resource-based cities is more conducive to reducing local carbon emissions. In contrast, e-commerce development in resource-based cities does not significantly suppress local carbon emissions. This study provides a theoretical basis and policy recommendations for governments to pursue urban low-carbon transformation and fresh insights into the global digital economy.