Abstract: Achieving carbon peak and carbon neutrality goals is a broad and profound reform. As a new form of economy, the digital economy should play an important role in achieving the "dual carbon" goals. To promote the development of China's digital economy and explore the carbon reduction effect of the digital economy, this article uses the entropy weight method to measure the level of digital economy in 30 provinces of China from 2010 to 2021, and constructs an econometric model to empirically test the carbon reduction effect and analyze its influence mechanism. Research has found that the digital economy has a significant carbon reduction effect; Mechanism research has found that the digital economy mainly promotes carbon reduction through the development of scientific and technological innovation level and industrial structure upgrading; Heterogeneity analysis indicates that geographical differences and differences in digital economic endowments are important factors affecting the carbon reduction effect of the digital economy. Based on this, policy recommendations are proposed from three aspects: narrowing the gap in the development level of the digital economy, opening up channels for technological innovation and industrial structure, and strengthening carbon reduction constraints, providing empirical support and theoretical basis for China's digital economy development and carbon reduction, and promoting the achievement of the "dual carbon" goal.