How can the digital transformation affect the net-zero transition?

Transitioning from fossil fuels to a net-zero economy is a major policy challenge at the core of the green transition. At the same time, advances in digital technologies such as artificial intelligence (AI) are rapidly changing production processes for goods and services across different sectors in the economy. This paper provides a conceptual framework to better understand how this digital transformation could influence the net-zero transition. By considering the digital transformation as linked to the emergence and diffusion of a general-purpose technology, it identifies the various channels through which this technological shift could affect the key elements of the net-zero transition, including energy efficiency and the carbon intensity of energy consumption.