Towards a cleaner post-production agro-system with agricultural innovation: theoretical and empirical evidence on a global scale

Abstract

Despite the agricultural post-production phase accounting for a substantial portion of the global agricultural emissions, empirical inquiry into its decarbonization remains sparse. This study addresses this critical research gap by examining the green transition of post-production processes, specifically evaluating the role of agricultural R&D expenditure as a catalyst for environmental remediation. Initially, this research develops a theoretical model grounded in the transitional stage where the rational, profit-maximizing producers choose the optimal combination between “brown” (carbon-intensive) and “green” (low-carbon) inputs with the presence of agricultural innovation. Two regimes are identified: the scale-up regime (where innovation is complementary to carbon-intensive inputs, making the inputs complements), and the substitution regime (where innovation complements low-carbon  inputs, allowing green resources to substitute carbon-intensive ones). Consequently, in the scale-up regime, agricultural R&D spending will increase the use of carbon-intensive, resulting in an uprise of emissions. In contrast, in the substitution regime, agricultural R&D introduces sustainability-inducing effects. With the global data covering 89 countries from 1990 – 2021, the empirical analysis has confirmed the theoretical model developed and revealed that the scale-up regime is dominating the global economy as agricultural R&D spending actually leads to a rise in both CO₂ and CH₄ emissions resulted from the post-production activities. Hence, with both theoretical and empirical findings, this study fundamentally challenges the conventional view that efficiency can lead to sustainability. Instead, without appropriate management, the Jevon Paradox will prevail, where innovation induces production expansion and worsen the environment.