Marginal abatement cost of agricultural carbon emissions in China: 1993-2015

Purpose - The purpose of this paper is to estimate shadow prices of agricultural carbon emissions produced by agricultural inputs, rice paddy and burning crop residue, and to explore the impact of cropping pattern on marginal abatement cost (MAC). Design/methodology/approach - The shadow price of agricultural carbon emissions is estimated by applying directional distance function and non-parametric methods. Findings - The estimated shadow price of agricultural carbon emissions ranges from 6.78 to 557.83 yuan/ton, and the average value is 62.50 yuan/ton (or $10.18/ton). The MAC value varies in different provinces and years. The regional difference of MAC shows a decreasing trend during the investigation period. Cropping pattern shows a significant negative impact on agricultural MAC. A 1 percent decrease of rice proportion leads to a 0.31 percent increase in MAC value. This implies that the higher the proportion of rice is, the lower the economic cost to reduce agricultural carbon emissions would be. Practical implications - It is feasible to draw up appropriate mechanisms for the allocation of emission reduction responsibilities according to conditions in various regions, with emphasis on the local cropping patterns. There is a trade-off between reducing carbon emission and increasing crop yields. Originality/value - This study calculates agricultural MAC by using the shadow price approach, taking agricultural carbon emissions as undesired environmental output. The study also provides a reference emission right price and provides guidance to make use of cropping structure adjustment and optimization for exploring the emission reduction strategy.