How does digital transformation affect the emissions of environmental pollutants? From the perspective of nonlinear nexuses

Digital transformation (DT) has become pervasive in all aspects of our society, forcing businesses, industries, governments, and individuals to discover new ways and modes of operating. The connections among DT, economic growth, and ecological systems are complex and multifaceted, and they are particularly influenced by market dynamics and spatial elements. Considering spatial dependence, this study analyzed the nexuses between DT and major environmental pollutants in China at the prefecture (i.e., city) level. Using spatial Durbin models, the empirical findings indicate that DT exerts a significant nonlinear impact on various environmental pollutants; moreover, inverted U-shaped patterns of the spatial spillover effect were observed at the nexus between DT and \({\text{CO}}_{2}\). Furthermore, we examined three valid channels (i.e., technological progress, industrial structural upgrading, and green finance) that form a transmission mechanism between DT and environmental pollutants. In addition, a heterogeneity analysis revealed that DT imposes a relatively stronger impact on \({\text{CO}}_{2}\), carbon intensity, and \({\text{PM}}_{{2.5}}\) in developed regions, suggesting that the impact of DT on environmental pollution is sensitive according to regional development status. The empirical evidence presented in this article can guide policy directions for different governments worldwide that are experiencing rapid industrial transitions and technological expansion.