ANALYSING THE IMPACT OF GREEN CREDIT ON AGRICULTURAL CARBON EMISSION REDUCTION AND PRODUCTION EFFICIENCY IN CHINA: A SYNERGY ANALYSIS

Abstract

The study investigates the role of green financing, regulatory frameworks, and agricultural efficiency in reducing carbon emissions and promoting sustainability. It explores these critical factors to identify optimal strategies for reducing agricultural emissions and achieving environmental sustainability. Climate, technological advancements, and labour force participation are also analysed to assess their impact on agricultural sustainability. Specifically, the research examines how green credit, production efficiency, and environmental regulations have influenced agricultural carbon emissions in China from 2010 to 2023. The analysis seeks to understand the interplay between green financing, regulatory measures, and production efficiency in fostering sustainable agriculture. The study employs dynamic panel data and regression models, including Random Effects, Fixed Effects, and the Generalised Method of Moments (GMM), to evaluate the impact of these independent variables on agricultural carbon emissions. Data from Chinese provinces over the period 2010–2023 were used to examine green loan allocations, production efficiency, and environmental policies. The GMM model effectively addressed issues of endogeneity and inter-variable relationships. The results of the Hausman, Sargan, and Serial Correlation tests validated the robustness of the study. Findings reveal that stringent environmental regulations, coupled with green credit, significantly reduce agricultural carbon emissions. Additionally, regions with higher production efficiency exhibit lower carbon emissions. The study recommends financial support, regulatory enforcement, and improvements in production efficiency to mitigate agricultural emissions. A unified policy and financial framework are advocated to enhance sustainability. The findings suggest that governments and private organisations should provide green financing and implement stringent environmental standards to curb agricultural carbon emissions effectively.