Impacts of Environmental Pollution and Digital Economy on the New Energy Industry

Abstract

This study explores the impacts of environmental pollution and the digital economy on the new energy industry with panel data on 30 Chinese provinces from 2005 to 2020. Mean group regression was performed, and fully modified OLS and dynamic OLS were conducted to check the robustness of the results. The authors reached two conclusions: (1) environmental pollution exerts significant negative impacts on the new energy industry. For every 1% increase in environmental pollution, the level of development of the new energy industry drops by 0.1658%. In other words, environmental pollution levels down the new energy industry. (2) The digital economy produces significant positive impacts on the new energy industry. For every 1% increase in the digital economy, the level of development of the new energy industry rises by 0.4262%. That is, the digital economy levels up the new energy industry. Our policy recommendations place equal stress on both the prevention and the control of environmental pollution, strengthening digital infrastructure, enhancing the government’s digital governance and service capabilities, protecting consumer rights, and replacing conventional energy with new energy.