# Mitigating CO2 emissions associated with digital economy sectors through whole supply chain management

## TL;DR

This study analyzes CO2 emissions in China's digital economy sectors through supply chains, identifying key drivers and offering strategies to reduce emissions.

## Contribution

The study introduces a whole supply chain analysis of CO2 emissions in digital economy sectors using multiple perspectives and input-output frameworks.

## Key findings

- The core digital economy sector leads in CO2 emissions from a consumption-based perspective, while industrial digitalization leads from consumption- and betweenness-based perspectives.
- Interprovincial flows drive supply chain emissions from a consumption-based view, while labor compensation drives emissions from an income-based view.
- Short high-carbon supply chain paths involve the power and heat production sector and industrial digitalization sector.

## Abstract

As China’s digital economy sectors rapidly expand, the growing demand for coal-based electricity has become a significant source of CO2 emissions. However, the mechanism driving these emissions within supply chains remain unclear, hindering targeted carbon management. This study addresses this gap by providing a comprehensive analysis of CO2 emissions thorough the whole supply chain perspective, covering income-, production-, betweenness-, and consumption-based perspectives, along with upstream and downstream supply chain paths. It employs Leontief and Ghosh input-output (IO) frameworks and structural path analysis. The results indicate: (1) The core industry sector of the digital economy (CIDE) ranks highest in CO2 emissions from consumption-based perspective, while the industrial digitalization sector (IDS) ranks highest from both consumption- and betweenness-based perspectives. (2) Inter provincial flows are the main source driving the digital economy sectors’ supply chain embodied CO2 emissions from consumption-based perspective, while labor compensation is the primary source driving its enabled CO2 emissions from income-based perspective. (3) High-carbon upstream and downstream supply chain paths driven by the digital economy sectors are short, with the power and heat production and supply sector and IDS playing crucial roles within these chains. Based on these findings, policy recommendations are provided to optimize supply chain structures, promote green consumption, and integrate carbon management into sector-specific strategies to reduce emissions across both upstream and downstream paths.