Geo‑Environmental Benefits and Burdens of Supply‑Chain Digitalization: A Spatial Policy Experiment

Digital transformation of supply chains offers a promising avenue for urban emission control; however, its environmental efficacy and spatial justice implications remain unclear. Utilizing China’s Supply Chain Innovation and Application Pilot Policy as a quasi‑natural experiment, we compile a city–year panel by merging high-resolution emissions inventories with official socioeconomic covariates across 279 prefecture-level cities (2005–2021). Using a spatial difference-in-differences design augmented with spatial autoregressive error and lag terms, we found that supply-chain digitalization lowers local emissions by 9.7%. However, spillover diagnostics reveal a “pollution displacement” pattern: emissions in neighboring jurisdictions rise by 4.4%, consistent with cross-border leakage. Mechanistically, supply-chain digitalization co-reduces pollution and carbon by catalyzing green technological innovation, strengthening government support for innovation, and improving energy efficiency through data-driven coordination along the supply chain. Heterogeneity emerges: medium‐sized and non‑industrial cities gain most, while megacities and entrenched industrial hubs see modest benefits. Our findings show that while digital supply-chain innovations can markedly advance urban sustainability, they must be paired with integrated regional instruments-such as linked city-level emissions trading schemes, shared digital monitoring–reporting–verification infrastructure, and cross-jurisdiction industrial-siting compacts-to curb displacement and other environmental externalities.