Abstract
Amidst the escalating challenge of global climate change, it is imperative to further explore whether digital trade, as an emerging element in the global development landscape, can reduce carbon emissions and achieve sustainable development. This study draws upon panel data encompassing 30 provinces and municipalities in China spanning the years 2013 to 2021. By establishing an index system to gauge regional digital trade development levels, the article examines the impact mechanism and spillover effects of digital trade on carbon reduction from both the supply (enterprises) and demand (residents) perspectives. The research results show that: (1) Digital trade can effectively promote regional carbon reduction, with a more pronounced effect in China's central and western regions and lower carbon emissions regions. (2) Digital trade can incentivize green innovation by enterprises and improve residents' consumption behavior, thereby reducing carbon emissions. (3) Digital trade has spillover effect on carbon emissions, and this "neighborhood effect" is greater than the "local effect". Digital trade provides strong support for carbon reduction and sustainable development and also provides a strategic direction for government policy formulation.