Green Finance, Chemical Fertilizer Use and Carbon Emissions from Agricultural Production

Houjian Li,Lili Guo,Yuting Song,Shuang Zhao,Mengqian Tang

doi:10.3390/agriculture12030313

Abstract

This study aimed to understand green finance’s impact on fertilizer use and agricultural carbon emissions. We selected the macro panel data of 30 provinces (cities) in China from 2000 to 2019. The main research methods are standardized test framework (cross-sectional dependence, unit root and cointegration test), the latest causal test, impulse response, and variance decomposition analysis. Examined the long-term equilibrium relationship between green finance, fertilizer use, and agricultural carbon emissions. The results show: fertilizer consumption and agricultural carbon emissions have a positive correlation. However, green finance can significantly reduce agricultural carbon emissions. The causal test confirmed the bidirectional causal relationship between agricultural carbon emissions and fertilizer use. At the same time, verified one-way causality from green finance to both of them. Interpret the results of impulse response and variance decomposition analysis: among the changes in agricultural carbon emissions, chemical fertilizers contributed 2.45%, green finance contributed 4.34%. In addition, the contribution rate of green finance to chemical fertilizer changes reached 11.37%. Green finance will make a huge contribution to reducing fertilizer use and agricultural carbon emissions within a decade. The research conclusions provide an important scientific basis for China’s provinces (cities) to formulate carbon emission reduction policies. China has initially formed a policy system and market environment to support the development of green finance, in 2020, the “dual carbon” goal was formally proposed. In 2021, the national “14th Five-Year Plan” and the 2035 Vision Goals emphasized the importance of green finance. It plays an important supporting role in carbon emission reduction goals, and green finance has become an important pillar of national strategic goals.

Highlights

With increasing greenhouse gas emissions, global warming has become one of the greatest threats faced by countries all over the world, which has brought about melting glaciers, rising sea levels [1], increasing biological morbidity and mortality [2], and increasing frequency of extreme weather including high temperatures and floods [3]
This paper focuses on agricultural carbon emissions, showing that green orientation plays a significant role in agricultural investment and financing, which can significantly reduce agricultural carbon emissions
Through the panel data analysis of 30 provinces in China for 20 years (2000–2019), this study examined the role of green finance and fertilizer usage as determinants of agricultural carbon emissions

Summary

Introduction

With increasing greenhouse gas emissions, global warming has become one of the greatest threats faced by countries all over the world, which has brought about melting glaciers, rising sea levels [1], increasing biological morbidity and mortality [2], and increasing frequency of extreme weather including high temperatures and floods [3]. Reducing carbon emissions is a key step to improve the global climate. Nearly 200 contracting parties passed the “Paris Agreement” to actively respond to global climate change after 2020. According to the world energy statistics in the 70th edition of the Statistical Yearbook published by the British Petroleum Corporation, in 2020, China is the main carbon emitter in Asia or even the largest carbon emitter in the world, accounting for 30.7%, far exceeding other countries and regions, and China’s future carbon emissions will be crucial to global environmental governance. China has taken active actions, making a solemn commitment to achieve the “double carbon” goals of peak carbon dioxide emissions in 2030 and carbon neutrality in 2060, actively exploring ways to reduce carbon simultaneously

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Conclusion