Is digital economy an answer to energy trilemma eradication? The case of China.

Digital economy plays an irreplaceable role in achieving energy development, and may also have a profound impact on energy supply and consumption. Based on a panel dataset of 30 provinces in China for the period 2006 to 2019, we assess the impact of digital economy on energy trilemma. This study also detects the asymmetric nexus between digital economy and energy trilemma, and investigates the direct and indirect effects of digital economy on energy trilemma. The main findings are as follows. (1) Digital economy shows a significant inhibitory effect on energy trilemma, which means energy trilemma can be effectively eradicated by promoting the development of digital economy. (2) Digital economy has a more prominent inhibitory effect on energy trilemma when the latter is at lower quantiles, and the marginal impact of digital economy on the energy trilemma decreases as the level of energy trilemma increases. (3) Digital economy exerts a significant and negative impact on energy insecurity, inequity, and unsustainability, which are three pillars of the energy trilemma. (4) Digital economy contributes to the eradication of energy trilemma by inhibiting traditional energy consumption and simultaneously encouraging technology innovation, which are two mediators in the nexus between digital economy and energy trilemma. Following the above findings, this study presents a series of policy recommendations for accelerating the development of digital economy and restricting energy trilemma.