The cost-effectiveness of agricultural greenhouse gas reduction under diverse carbon policies in China

Abstract

PurposeMitigating agricultural greenhouse gas (GHG) emissions is an essential part of China's effort to achieve net-zero emissions. This study assesses the cost-effectiveness of China's agricultural GHG reduction under diverse carbon policies.Design/methodology/approachThe study employs a parametric non-radial distance function approach and estimates the technical abatement potential and marginal abatement cost (MAC) of GHG in China's agricultural sector for the 2008–2017 period.FindingsAgriculture is expected to make a great contribution to China's net-zero emissions progress. This study empirically analyses the cost-effectiveness of China's agricultural GHG reduction under diverse carbon policies. A parametric non-radial distance function approach is used to derive technical abatement potential and MAC of GHG for the 2008–2017 period. The results indicate that no significant improvement had been achieved in terms of agricultural GHG reduction in China during 2008–2017. The country's agricultural sector could reduce 20–40% GHG emissions with a mean value of 31%. In general, western provinces have larger reduction potential than eastern ones. The average MAC for the whole country is 4,656 yuan/ton CO2e during 2008–2017. For most western provinces, their MAC values are considerably higher than those for most eastern provinces. Compared with previous sectoral estimates of GHG mitigation cost, this study’s estimates indicate that reducing agricultural GHG emissions in some provinces is likely to be cost-effective. The Chinese government should consider expanding its national carbon market to cover agricultural sector.Practical implicationsThe Chinese government should consider expanding its national carbon market to cover agricultural sector.Originality/valueExisting studies in the field mostly ignore input constraints, which is inconsistent with carbon mitigation policy practice, especially in the agricultural sector. This study’s approach integrates both input and output constraints reflecting differing policy practice.