Crossing the river by feeling the stones: Leveraging livelihood capital and cooperation to boost farmers’ engagement in carbon markets

Lexuan Ma, He Yang and Tan Li

Energy Policy, 2025, vol. 198, issue C

Abstract: Effective environmental protection demands innovative incentive mechanisms and robust governance of complex systems. Carbon sink trading emerges as a promising solution to mitigate global climate change while enhancing rural incomes. However, farmers' participation in such initiatives remains suboptimal, partly due to the limited integration of socio-demographic factors into traditional economic analyses. This study introduces the Knowledge-Attitude-Practice (KAP) framework into the domain of farmer behavior research. By extending the KAP framework to include livelihood capital, this research examines farmers' willingness to participate in carbon sink trading across Xuancheng, Sanming, and Huzhou cities. Structured interviews with 657 farmers were analyzed using partial least squares structural equation modeling (PLS-SEM) to assess the influence of livelihood capital—human, social, natural, financial, and physical—on farmers' knowledge, attitudes, and willingness to participate in carbon sink trading. Additionally, partial least squares multiple-group analysis (PLS-MGA) was employed to evaluate the regulatory role of cooperative membership in these relationships. The findings demonstrate that livelihood capital significantly shapes farmers’ knowledge and attitudes toward forestry carbon sink projects, which in turn positively influence their willingness to participate. Village characteristics, age, and political engagement also emerge as critical determinants. Notably, cooperative membership amplifies the positive impacts of livelihood capital and carbon sink awareness on participation. The study underscores the need for policies that enhance livelihood capital, raise awareness of carbon sink trading, and foster cooperative development, thereby advancing sustainable environmental conservation and optimizing forest land value.

Keywords: Livelihood capital; Carbon trading; Willingness to participate; Partial least squares structural equation model (PLS-SEM) (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:198:y:2025:i:c:s0301421524004944

DOI: 10.1016/j.enpol.2024.114474

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