Analyzing the impact of government subsidies and other socioeconomic factors on blue carbon sinks in the coastal regions

Xinhua He, Huihui Huang and Wenfa Hu

Ecological Economics, 2025, vol. 237, issue C

Abstract: The Earth is a blue planet covered with oceans and coasts, and marine plants and seashells in the coastal regions can absorb and store carbon dioxide from the atmosphere, called blue carbon sinks. We present a Stackelberg model with two regions producing carbon sinks to illustrate how government subsidies and other socioeconomic factors enhance blue carbon sinks in coastal areas. Evidence shows many economic factors have significantly influenced blue carbon sinks in recent years. Our results suggest that 1 % of the government subsidy level increases 0.24 million tons of blue carbon sinks in one of the Chinese coastal cities. Further heterogeneous analysis reveals that the government subsidy has an inverted U-shaped effect on blue carbon sinks and a moderate government subsidy can produce the highest output of blue carbon sinks. We also find that the selling prices of seashells and blue carbon promote the production of blue carbon sinks. The evidence is consistent with four hypotheses suggested by the Stackelberg model. Notably, the evidence reveals that seawater quality is not a significant factor in promoting carbon sinks because consumers are not sensitive to aquaculture seawater quality which we discussed in the Stackelberg model. Our findings support new policies on how to promote blue carbon sinks in the coastal regions.

Keywords: Blue carbon sink; Government subsidy; Coastal regions; Stackelberg model; Socioeconomic factors (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolec:v:237:y:2025:i:c:s0921800925002010

DOI: 10.1016/j.ecolecon.2025.108718

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