Policy Brief on Digitalization and Green Transformation in China’s Energy Sector

A recent policy brief by Dr. Asif Razzaq, Senior Research Specialist at the CAREC Institute, examines how digitalization can help energy companies in China transition to greener practices. The study, based on data from 2008 to 2022 of A-share listed energy companies, finds that technologies like big data, AI, and smart grids improve efficiency, transparency, and innovation, which are key to promoting sustainability. The research shows that digitalization reduces short-term thinking in management, raises executives’ awareness of environmental issues, increases media attention, and helps companies overcome financial barriers.

The findings indicate that non-state-owned, renewable energy, and growth-stage companies benefit the most from digital transformation, while state-owned and fossil fuel companies show less improvement. Dr. Razzaq suggests that policies should focus on strengthening digital infrastructure, expanding access to green finance, and addressing short-term decision-making. He also calls for training executives in digital skills and green governance to drive further sustainability.

Although the study focuses on China, the brief notes that similar challenges may exist in regions with a digital divide, such as Central Asia, where digitalization could also help drive the transition to greener energy.

This policy brief is extracted from a research paper published in the Journal of Environmental Management (Elsevier). https://www.sciencedirect.com/science/article/abs/pii/S0301479725030233