Exploring the role of digital inclusive finance in agricultural carbon emissions reduction in China: Insights from a two-way fixed-effects model

Abstract

Digital inclusive finance can help to achieve agricultural carbon reduction through effective resource allocation, financial innovation, and digital networks. This study empirically tested the role of digital inclusive finance in agricultural carbon emissions reduction using a two-way fixed-effects model that was based on panel data of 30 provinces from 2011 to 2019 in China. The data and statistics showed that China's total agricultural carbon emissions were still growing and had not yet reached their peak. This empirical study found that digital inclusive finance had a significant effect on the reduction in agricultural carbon emissions. Specifically, for every one-level increase in the digital financial inclusion development (DFII) level, the province's total agricultural carbon emissions (TACC), agricultural greenhouse gas carbon emissions (ACGC), and agricultural carbon source carbon emissions (ACSC) decreased by 0.31, 0.38, and 0.25%, respectively, but there was no significant decrease in agricultural energy use carbon emissions (ACEC)1. Furthermore, the first- and second-order lagged terms of digital inclusive finance still had significant agricultural carbon reduction effects, reducing TACC by 0.30 and 0.29%, respectively. To better utilize the agricultural carbon emissions reduction effect of digital inclusive finance, we should further support the development of digital inclusive finance; promote education on, and the breadth and depth of digital inclusive finance; encourage cooperation between digital inclusive finance and low-carbon enterprises to reduce the financing constraints of agricultural low-carbon enterprises; and stimulate the R&D and sales of low-carbon technologies.