Socio-economic and energy-environmental impacts of technological change on China's agricultural development under the carbon neutrality strategy

Abstract

Promoting agricultural modernisation through technological change is an important strategy for China. China's carbon neutrality strategy is leading to systemic socio-economic changes that could exacerbate the uncertainty of agricultural development. Therefore, applying a computable general equilibrium (CGE) model, this study characterises the agricultural sector in detail, introducing endogenous technological change proxied by research and development (R&D) to assess the impact of different technological change scenarios on agricultural development under the carbon neutrality target. The results show that allocating carbon revenue for R&D inputs can mitigate the significant negative impact of achieving carbon neutrality on knowledge capital and production in agricultural sectors. Overall, using carbon revenue only for R&D input in crop sectors has the optimal effect on increasing the agricultural sectors' knowledge capital, improving crop production and profit, reducing crop external dependence and promoting the synergistic reduction of carbon and pollutant emissions. However, this scenario has the largest negative impact on macro-economics and household welfare. In contrast, allocating carbon revenue to promote technological change in broader non-energy sectors or both crops and non-energy sectors can effectively mitigate negative socio-economic impacts, but the positive impact on agricultural development is minimal. These findings provide practical insights for the rational use of carbon revenue to expand agricultural R&D investment and ensure balanced agricultural and economic development under the carbon neutrality target.