Identifying the carbon intensity of different digital integration modes: Considering the location of the digital...

The integration between digital and non-digital sectors has significantly impacted the global low-carbon transformation; however, the identifying of its integration models remains insufficient. This paper constructs a novel and comprehensive decomposition framework for digital integration from the perspective of the location of the digital products, utilizing the inter-country input-output (ICIO) model. It measures the carbon intensity of various types of digital integration at the global level, across 19 economies, and in 10 sectors from 1995 to 2020. The main findings are as follows: (1) The carbon intensities of digital integration globally and across all economies are lower than the total carbon intensity. OECD economies demonstrate relatively lower carbon intensities of digital integration, with the most significant decline observed in China. (2) The carbon intensity of digital backward integration is considerably higher than that of digital forward integration, primarily due to the high carbon intensity associated with digital downstream integration. This gap between the two types of carbon intensity is particularly pronounced in certain non-OECD economies and has significantly widened over time in most economies. (3) During the study period, the relationship wherein the carbon intensity of digital upstream integration is lower than that of digital self-integration has reversed in economies such as China, ASEAN, South Korea, Mexico, and Israel. In most economies, except India and Turkey, the carbon intensity of digital downstream integration is higher than that of digital midstream integration, although the gap is narrowing. (4) In the power and manufacturing sectors, forward integration with the digital sector leads to a higher production-based carbon intensity compared to non-digital self-integration. Digital midstream integration contributes to reducing the consumption-based carbon intensity in non-digital sectors, particularly in agriculture, mining, high-carbon-intensity manufacturing, and transportation. These findings have significant policy implications for both global and national economies striving to achieve low-carbon development through diverse modes of digital integration.