Does green finance matter for agricultural carbon abatement? Fresh insight from China.

Abstract

Green finance constitutes a fundamental financial institutional arrangement aimed at achieving the dual-carbon objective during China's agricultural transition toward low-carbon, which aligns with the pragmatic necessity for reducing agricultural carbon emissions. For this purpose, this study investigates the impact of green finance on agricultural carbon reduction and its underlying mechanism by analyzing panel data from 30 regions using a two-way fixed effects model. Results indicate that green finance significantly promotes agricultural carbon reduction. The promotion effect of green finance on agricultural carbon reduction demonstrates an uneven spatial distribution, declining from eastern to western to central regions. Notably, non-Yangtze River Economic Belt provinces exhibit more pronounced effects compared to the Yangtze River Economic Belt region. Industrial structure upgrading and green innovation serve as crucial pathways for green finance to augment agricultural carbon reduction. Our finding reveals policymakers should implement differentiated green finance implementation strategies to accelerate the restructuring of the agricultural industry and encourage the introduction and use of innovative low-carbon technologies.