Examination of Green Productivity in China’s Mining Industry: An In-Depth Exploration of the Role and Impact of Digital Economy

By inergency On Jan 6, 2024

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1. Introduction

Amidst a profound transformation spanning key global sectors including economics, technology, culture, security, and politics, a new wave of technological revolution and industrial transformation is providing unprecedented development opportunities for nations around the globe. The Sustainable Development Goals (SDGs) set by the United Nations foreground the importance of harnessing such transformations to achieve a more inclusive, sustainable, and resilient future [1]. Within this transformative landscape, the digital economy has surfaced as a pivotal driver for global economic advancement, aligning with multiple SDGs by fostering innovation, ensuring equitable access to technological benefits [2], and promoting sustainable industrialization [3]. It enhances energy efficiency, contributes to Affordable and Clean Energy (SDG 7), promotes inclusive economic growth and job creation in line with Decent Work and Economic Growth (SDG 8), fosters sustainable industrialization and innovation, which is central to Industry, Innovation, and Infrastructure (SDG 9), and supports Climate Action (SDG 13) through technologies vital for climate change mitigation. According to a 2022 white paper by the China Academy of Information and Communications Technology [4], the digital economy of 47 major global economies attained a remarkable $38.1 trillion in 2021, marking a year-over-year surge of $5.1 trillion (Figure 1). These statistics not only chart the ascendant course of the digital economy but also emphasize its deep-seated influence in domains such as semiconductors, artificial intelligence, digital infrastructure, and e-commerce and blockchain technology. Considering these developments, it is crucial to evaluate how the integration of digital economy strategies can further propel the realization of the SDGs and ensure a sustainable future for all.

The Chinese mining industry is facing challenges in sustainable development due to the dual expansion of supply demand and emissions. Data from the Annual Report 2022 for Carbon Dioxide Emission Accounts of Global Emerging Economies [5], for the year 2022 reveal that China’s carbon emissions reached as high as 11 billion tons, accounting for 28.87% of global emissions. Industrial emissions, including those from mining, totaled 4.2 billion tons, comprising 38.18% of the country’s overall emissions. These figures bring to light the mining industry’s significant environmental responsibilities. Conversely, according to a report by the International Energy Agency [6], global energy demand is expected to grow annually by approximately 0.8% by 2030, primarily fueled by renewable and clean energy sources. This transition is likely to substantially increase the demand for essential mineral resources such as rare earth elements, lithium, and cobalt.

Therefore, it is particularly crucial to delve into how the digital economy can become a key driver in steering the mining industry towards a more green and efficient development path. Green Total Factor Productivity (GTFP), serving as a comprehensive tool for evaluating and promoting sustainable development, not only encapsulates the levels of resource efficiency and environmental protection, but also provides a framework for assessing technological innovation and ongoing transformation. Although digital technologies have been extensively researched and applied in tertiary industries such as services and finance, their specific roles and potential in the mining sector remain largely unexplored. Meanwhile, existing research on GTFP seldom considers technological heterogeneity, making it an area that warrants focused attention.

This study aims to explore several key questions: First, what is the impact of the digital economy on GTFP in China’s mining industry under technological heterogeneity? Second, how, and through which specific mechanisms, is the impact of the digital economy on green productivity in China’s mining industry achieved? Finally, does this impact show significant regional or industrial differences, or is there a spatial spillover effect? Answering these questions will help deepen our understanding of the relationship between the digital economy and sustainable development and provide valuable insights and guidance for policymakers and industry stakeholders.

This study has the following marginal contributions. First, we use the meta-frontier Malmquist–Luenberger (MML) index to measure the GTFP of China’s mining industry under technological heterogeneity. Secondly, to deeply explore the multi-dimensional impact of the digital economy on the heterogeneity GTFP of China’s mining industry, we further decomposed it into technology progress index (TECH), technology efficiency change (EFCH), pure technology catch-up (PTCU) and potential technology relative change (PTRC). Finally, we also use the intermediary effect and the spatial spillover effect model to systematically explain how the digital economy concretely affects these key factors.

The remaining sections of this paper are arranged as follows: Section 2 briefly reviews the literature related to the DE and GTFP in the mining industry. Section 3 delves into a detailed mechanism analysis. Section 4 provides the methods and data used in the study. Section 5 presents all the empirical findings. Finally, Section 6 concludes and offers policy recommendations.

6. Conclusions and Policy Implications

This study utilizes panel data from 30 provinces, municipalities, and autonomous regions in China, spanning from 2008 to 2021, to estimate the GTFP under technological heterogeneity in the mining sector through the MML index model. To delve further into the impact of the DE on mining GTFP, we also employed the spatial Durbin model and mediation effect models for empirical verification. The study yields the following conclusions: (1) The findings validate a positive influence of the DE on GTFP, which is statistically significant at the 1% level. While the DE contributes positively to technological progress and pure technical catch-up, its role in enhancing technical efficiency and reducing the potential technological gap remains inconclusive. Control variables such as environmental regulations and government intervention also have varying degrees of influence on GTFP and its components. (2) The study uncovers the mediating role of industrial structure upgrading in the relationship between the DE and GTFP. Specifically, the DE exerts a constrictive effect on industrial structure, which may yield negative repercussions for GTFP in the short term. Through component analysis, we further ascertain that the DE positively influences technological progress and pure technical catch-up. (3) Beyond the direct positive impact of the DE on local mining GTFP, our research identifies a significant spatial spillover effect. This implies that the benefits of the DE extend beyond elevating local mining productivity to affecting adjacent regions, thereby exhibiting its inter-regional diffusion and influence.

Based on the above conclusions, this paper derives the following policy implications.

(1): Promote and apply deep technological innovation. By providing research and development funding, tax incentives, and fostering public–private sector cooperation, real technological innovation, and breakthroughs are stimulated. Implementing technology demonstration projects, promoting industry best practices, and offering financial incentives support businesses in adopting and applying these innovative technologies.
(2): Industry transformation for environmental efficiency. Governmental strategies should focus on the connection between DE, GTFP, and industrial structural change. Publicly announced goals should emphasize green operations, low carbon emissions, and value addition. Financial incentives can guide polluting industries towards eco-friendliness. Environmental management should span the entire industrial process, ensuring genuine eco-friendly transformations. These measures will harmonize economic growth with environmental responsibilities, further promoting sustainable GTFP.
(3): Cross-regional collaboration for sustainable mining. Given the DE’s impact on mining efficiency and its regional spillovers, a strategy promoting regional mining sustainability is vital. Establishing Centers for Digital Innovation in Mining can foster knowledge sharing and tech transfers. A cross-regional environmental regulatory body should ensure unified eco-standards and oversight. Financial incentives, like awards, can motivate companies to focus on regional environmental impacts. These recommendations push for leveraging DE’s potential to amplify regional sustainability in mining, aligning individual mining progress with wider regional green objectives.

Considering the findings from our study, particularly the observed inverted U-shaped relationship between the DE and GTFP, future research directions should focus on deepening the understanding of this complex relationship. It is essential to explore the causes behind the dominant negative effects that emerged, especially in the context of the U-shaped curve we identified. Further investigation could benefit from employing heterogeneous panel estimators, which would allow for a more nuanced examination of the thresholds within this relationship. Specifically, utilizing panel thresholds could provide valuable insights into the varying impacts of DE on GTFP across different regions or sectors.

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