Abstract
Addressing the carbon co-benefits of policy tools requires simultaneous improvements in both the quantity and quality of carbon abatement to achieve long-term sustainability and equity. Driven by digital technologies and bolstered by green capital, the combination of the digital economy and green finance (DEGF) establishes an effective mechanism for attaining sustainable development goals. Treating the coordinated implementation of the National Big Data Comprehensive Pilot Zones (NBDCPZ) and Green Finance Reform and Innovation Pilot Zones (GFRIPZ) policies in China as a quasi-natural experiment, we identify the carbon co-benefits of DEGF using the Synthetic Control Method with penalized regression technique. Empirical findings show that DEGF significantly promotes simultaneous improvements in both the quantity and quality of carbon mitigation. These findings are robust across various validation tests, including time-placebo test, alternative model specification, and double machine learning algorithms. According to mechanisms analysis, improving green technological innovation and human capital level are the main channels that DEGF produces carbon co-benefits. The study provides China and other emerging economies seeking to promote sustainable development through digital-green integration with policy-relevant implications.