The emerging digital economy can achieve low-carbon development at a lower cost, and it is an important engine for integrating carbon neutrality and economic development goals. This paper uses the matching data of the listed companies and the prefecture-level cities from 2011 to 2020 to discuss the mechanism and the effect of digitalization on the cost of carbon emission reduction and the changes brought about by urban low-carbon total factor productivity. The results show that the impact of digitalization on urban low-carbon total factor productivity through carbon emission reduction costs shows the characteristics of "first suppression, then promotion". The mechanism study found that the impact of digitalization on carbon emission reduction costs was nonlinear due to the combined effects of energy demand structure, factor technology efficiency and green technology innovation: in the early stage of digitalization, the surge in energy demand and the decline in factor technology efficiency offset the positive effects of green technology innovation, and the carbon emission reduction cost increased. In the middle and late stages of digitalization, with the optimization of energy demand structure and the improvement of factor technology efficiency, the cost of carbon emission reduction decreases. The heterogeneity analysis shows that compared with state-owned and high-energyconsuming enterprises, the digital transformation of non-state-owned enterprises and low-energy-consuming enterprises reduces the cost of carbon emission reduction earlier and improves the low-carbon total factor productivity of cities. Cities with low resource dependence, developed economy, large scale, and high coupling and coordination between digitalization and green technology innovation have a stronger inhibitory effect on the cost of carbon emission reduction, and the low-carbon total factor productivity of cities has been greatly improved.

digitization  /  carbon reduction costs  /  urban low-carbon