Transitioning to low-carbon agriculture: the non-linear role of digital inclusive finance in China’s agricultural carbon emissions

Abstract

Promoting low-carbon agricultural development is essential for achieving carbon neutrality and peak carbon emission goals. The emergence of digital inclusive finance has opened a new pathway to reduce agricultural carbon emissions. This study uses data from various provinces in China from 2011 to 2021 to explore the impact of digital inclusive finance on agricultural carbon emissions and its mechanism of action. The results show that during the study period, agricultural carbon emissions first increased and then decreased, with the emission gap between the eastern and western regions narrowing, while the gap between the southern and northern regions widened. Digital inclusive finance has an inverted “U-shaped” nonlinear impact on agricultural carbon emissions, with the depth of use and the degree of digitization being key factors. Agricultural carbon emissions only begin to be effectively suppressed when the scale of digital inclusive finance exceeds the peak value. Additionally, the development of agricultural green cooperatives weakens the emission reduction effect of digital inclusive finance, indicating a decoupling between their developments, while the accumulation of human capital enhances its emission reduction effect. Based on this, the government is advised to continue promoting low-carbon strategies and the development of digital inclusivity in rural areas. Financial institutions should develop financial products suitable for agricultural green cooperatives, and agricultural green cooperatives should also provide timely feedback and communication to achieve coordinated development between the two. Furthermore, education and training for farmers should be strengthened to encourage them to learn and adopt new technologies.