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

Lili Guo, Shuang Zhao, Yuting Song, Mengqian Tang and Houjian Li
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Lili Guo: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Shuang Zhao: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Yuting Song: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Mengqian Tang: College of Economics, Sichuan Agricultural University, Chengdu 611130, China
Houjian Li: College of Economics, Sichuan Agricultural University, Chengdu 611130, China

Agriculture, 2022, vol. 12, issue 3, 1-18

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.

Keywords: green finance; chemical fertilizer use; carbon emissions; agricultural production; carbon neutrality (search for similar items in EconPapers)
JEL-codes: Q1 Q10 Q11 Q12 Q13 Q14 Q15 Q16 Q17 Q18 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (24)

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