A Simulation Study of How Chinese Farmer Cooperatives Can Drive Effective Low-Carbon Production Systems Through a Carbon Transaction Incentive

Abstract

This article aims to investigate the mechanisms of farmer professional cooperative (FPC) operations and to understand their role in promoting low-carbon production among small-scale farmers in China. Agricultural carbon emissions account for 17% of the total carbon emission in China; therefore, reducing agricultural carbon emissions is important for China to achieve carbon neutrality. Small-scale farmers face many obstacles in achieving the low-carbon transition of agriculture, which therefore makes them a priority target for the implementation of low-carbon production systems in China. Participating in FPCs is an effective support mechanism for them to conduct low-carbon production. In this paper, a system dynamics model is used to simulate the methods of how FPCs assist small-scale farmers to adopt low-carbon production practices within the framework of China’s carbon trading system, through the year 2030. After attending the carbon transaction system, the agricultural carbon emissions are anticipated to decline by 10.21%, and FPCs’ net income could increase by 11.85%. In a scenario where the price of their agricultural products increases, the reduction of carbon emissions and the increase of FPCs’ net income will be beneficial. Under the operation of FPCs, the greatest profits will be generated from trading, and these will be distributed to small-scale farmers, thereby creating a positive feedback loop between carbon transactions and FPC operations. This article seeks determine the potential outcomes that can serve as a basis for informed decision-making within relevant policy-making agencies regarding agricultural carbon transactions by simulating the potential benefits to both small-scale farmers and FPCs from the integration of a carbon trading system