Abstract:

The mechanism of utilizing carbon trading to promote deep agricultural emission reductions is a topic of urgent discussion. This article reviews the theoretical foundations of utilizing carbon trading to promote agricultural emission reductions, summarizes relative international practices, experience and obstacles, and provides insights into the pathway for utilizing carbon trading to promote agricultural emission reductions in China. Utilizing carbon trading to promote deep emission reductions in agriculture is theoretically and economically feasible when the transaction costs are lower than the cost savings. However, it faces various obstacles such as high emission uncertainty, lack of technical standards, unstable emission reduction effects, as well as high costs for monitoring, reporting, and verification in practice. The inclusion of agriculture in voluntary carbon markets has made significant progress in innovative organizational methods, constructing risk-sharing mechanisms, and developing accounting standards, while there is currently no successful practice of including agriculture in mandatory carbon markets. To accumulate experience and reduce transaction costs, agriculture should prioritize voluntary carbon markets and gradually transition towards mandatory carbon markets. Agricultural projects verified by Chinese Certified Emission Reduction (CCER) market are an important practice for agriculture to participate in voluntary carbon markets. Only when the policies, methodologies, and operational mechanisms are mature can we expand the quantity and scale of CCER agricultural projects. However, due to the crucial role of agriculture in food security and national economic development, the initiative of including agriculture in mandatory carbon markets must be discussed with utmost caution.

Key words: Agriculture emission reductions, Carbon trading, Mandatory carbon market, Voluntary carbon market, International experience