All Issue

2026 Vol.68, Issue 5 Preview Page
Effects of Policy Packages on Farmer Participation and Incremental Cost-Benefit Analysis for Methane Mitigation in Paddy Fields: Carbon Credit and Direct Payment Scenarios

논 메탄 감축정책 조합의 참여확대 효과와 증분 비용·편익 분석: 탄소크레딧과 직불금 시나리오를 중심으로

Woo-Han Ryua
,
Seul-gi Leeb
,
Jae-Nam Leec
,
Chae-Young Leed†
류 우한a
,
이 슬기b
,
이 재남c
,
이 채영d†
aDirector, Agricultural Infrastructure Planning Office, Korea Rural Community Corporation (KRC)
bResearch, Rural Research Institute, Korea Rural Community Corporation (KRC)
cResearch, Rural Research Institute, Korea Rural Community Corporation (KRC)
dProfessor, Department of Civil Engineering, The University of Suwon
† Corresponding author Tel.: +82-31-220-2470, Fax: +82-31-220-2470 E-mail: chaeyoung@suwon.ac.kr
30 September 2026. pp. 99-110
PDF XML Citation
Abstract

This study evaluates how carbon credits and direct payments may expand farmer participation in alternate wetting and drying (AWD) and assesses their incremental costs and benefits relative to the existing adoption level. The baseline scenario (S1) sets the national paddy area at 700,000 ha and applies the official 2019 AWD adoption rate of 40.3%. To separate policy-induced participation from the physical mitigation effect of AWD, the same methane reduction rate of 43.23% is applied to all scenarios. S2 applies price-dependent farmer responses from a U.S. Midwest survey, while S3 uses minimum acceptance rates reconstructed from Korean rice farmers’ stated direct-payment preferences. S4 sequentially combines the two responses to avoid double-counting participation. Incremental benefits are calculated only for reductions exceeding S1 and are valued using the Korean social cost of carbon of KRW 45,548 per tCO2eq. Government costs include carbon-credit purchases, direct payments, administration, monitoring, aggregation, and verification. S2 yields benefit-cost ratios of 1.44–1.45, with the active case achieving an additional reduction of 168,631 tCO2eq/yr and a net benefit of KRW 2.374 billion. S3 is cost-effective only at KRW 50,000/ha. S4 achieves the largest additional reduction of 460,395 tCO2eq/yr, but its benefit-cost ratios remain at 0.38–0.75 under full overlapping support. Sensitivity analysis shows that economic feasibility is strongly affected by carbon valuation. The results suggest that carbon credits are a relatively scalable performance-based incentive, while direct payments should be targeted to transition costs, production risks, and areas below the 2030 AWD target.

Keywords
Paddy methane
methane mitigation
alternate wetting and drying (AWD)
carbon credit
direct payment
incremental cost-benefit analysis
References
1

Greenhouse Gas Inventory and Research Center of Korea (GIR), 2024. 2023 National greenhouse gas inventory report of Korea. Cheongju, Korea (in Korean).

2

Interagency Working Group on Social Cost of Greenhouse Gases (IWG), 2021. Technical support document: Social cost of carbon, methane, and nitrous oxide: Interim estimates under executive order 13990, 5. Washington, D.C.: United States Government.

3

Intergovernmental Panel on Climate Change (IPCC), 2022. Climate change 2022: Mitigation of climate change. contribution of working group III to the sixth assessment report of the Intergovernmental Panel on Climate Change, 793-794. Cambridge, UK and New York, NY: Cambridge University Press. doi:10.1017/9781009157926.

10.1017/9781009157926
4

Jeong, H. K., H. S. Kwak, and J. H. Han, 2025. Agricultural policy preferences for promoting low-carbon agricultural technologies in crop cultivation. Journal of Climate Change Research 16(5-1): 859-872. doi:10.15531/KSCCR.2025.16.5.859.

10.15531/KSCCR.2025.16.5.859
5

Korea Exchange (KRX), 2026. Emissions Trading Market Information Platform: KAU25 market price inquiry. https://ets.krx.co.kr/contents/ETS/03/03010000/ETS03010000.jsp. Accessed 31 Aug. 2026 (in Korean).

6

Li, L., Z. Huang, Y. Mu, S. Song, Y. Zhang, Y. Tao, and L. Nie, 2024. Alternate wetting and drying maintains rice yield and reduces global warming potential: A global meta-analysis. Field Crops Research 318: 109603. doi:10.1016/j.fcr.2024.109603.

10.1016/j.fcr.2024.109603
7

Ministry of Agriculture, Food and Rural Affairs (MAFRA), 2021. 2050 Carbon neutrality strategy for the agriculture and food sector, 20. Sejong, Korea (in Korean).

8

Ministry of Agriculture, Food and Rural Affairs (MAFRA), 2023. Supporting emissions trading for carbon-reducing farms to proactively respond to the climate crisis. MAFRA 2023 official press release. https://www.mafra.go.kr/bbs/home/792/567616/artclView.do. Accessed 31 Aug. 2026 (in Korean).

9

Ministry of Agriculture, Food and Rural Affairs (MAFRA), 2025. Applications open for low-carbon agricultural activities in the second half of 2025, with an expected additional reduction of 50,000 tCO2eq. MAFRA 2025 official press release. https://www.mafra.go.kr/bbs/home/792/574856/artclView.do. Accessed 31 Aug. 2026 (in Korean).

10

Ministry of Agriculture, Food and Rural Affairs (MAFRA), 2026. 2026 Budget and fund management plan: Project description materials. MAFRA 2026 Budget and Fund Management Plan materials. https://www.mafra.go.kr/bbs/home/780/576564/artclView.do. Accessed 31 Aug. 2026 (in Korean).

11

Ministry of Climate, Energy and Environment (MCEE), 2025. 2035 NDC and fourth emissions trading allocation plan finalized at cabinet meeting. https://mcee.go.kr/eng/web/board/read.do?boardId=1820110&boardMasterId=522&menuId=461. Accessed 31 Aug. 2026.

12

U.S. Environmental Protection Agency (EPA), 2023. Report on the social cost of greenhouse gases: Estimates incorporating recent scientific advances, 4. Docket ID No. EPA-HQ-OAR-2021-0317. Washington, D.C.

13

Wang, T., H. Jin, D. Clay, H. L. Sieverding, and S. Cheye, 2024. Carbon supply elasticity and determinants of farmer carbon farming decisions. Applied Economic Perspectives and Policy 46(3): 1190-1213. doi:10.1002/aepp.13442.

10.1002/aepp.13442
14

Yi, D., and S. Lee. 2024. Estimating the social cost of carbon through benefit transfer techniques. Korean Energy Economic Review 23(1): 149-175. doi:10.22794/keer.2024.23.1.007.

10.22794/keer.2024.23.1.007
Information
  • Publisher :The Korean Society of Agricultural Engineers
  • Publisher(Ko) :한국농공학회
  • Journal Title :Journal of Korean Society of Agricultural Engineers
  • Journal Title(Ko) :한국농공학회논문집
  • Volume : 68
  • No :5
  • Pages :99-110
  • Received Date : 2026-05-30
  • Revised Date : 2026-08-07
  • Accepted Date : 2026-08-14
  • DOI :https://doi.org/10.5389/KSAE.2026.68.5.099
Journal Informaiton Journal of Korean Society of Agricultural Engineers Journal of Korean Society of Agricultural Engineers
  • NRF
  • KOFST
  • crossref crossmark
  • crossref cited-by
  • crossref funder-registry
  • crosscheck
  • orcid
  • open access
Journal Informaiton Journal Informaiton - close