Estimating marginal abatement cost for methane emission from agriculture: empirical evidence for paddy cultivation in India Shreya Some  (  ayerhs7891@gmail.com ) Asian Institute of Technology https://orcid.org/0000-0002-7254-9970 Joyashree Roy  Asian Institute of Technology Arpita Ghose  Jadavpur University Pawan Kumar Sharma  Sher-e-Kashmir University of Agricultural Sciences and Technology of Jammu Research Article Keywords: Flooded paddy cultivation, carbon price, mitigation potential, mitigation cost, Farming practices, Agricultural land use Posted Date: January 18th, 2023 DOI: https://doi.org/10.21203/rs.3.rs-2450650/v1 License:   This work is licensed under a Creative Commons Attribution 4.0 International License.   Read Full License Additional Declarations: The authors declare that they have no known competing nancial interests or personal relationships that could have appeared to inuence the work reported in this paper. Acknowledgements: The rst author acknowledges the nancial assistance received during the years 2016-2020 under Junior and Senior Research Fellowship (JRF and SRF) from University Grants Commission (UGC) of India. The authors acknowledge the infrastructural support provided by Department of Economics- Jadavpur University-India, Centre for South and South-east Asia Multidisciplinary Applied Research Network on Transforming Societies of Global South (SMARTS)- School of Environment Research and Development-Asian Institute of TechnologyThailand, and data support provided by Krishi Vikas Kendra Kathua- Sher-e-Kashmir University of Agricultural Sciences & Technology of Jammu (J &K)-India to carry out this research work. Estimating marginal abatement cost for methane emission from agriculture: empirical evidence for paddy cultivation in India Abstract Implementing mitigation options through adoption of alternative practices entail cost. Methane emission from paddy/rice cultivation accounts for approximately one-fifth of India’s total methane emission. It occurs mainly due to flooded paddy cultivation practices which accounts for 30% of land under paddy cultivation in India. Several practices are available for reducing methane emission from paddy cultivation in India. The literature shows the highest mitigation potential is offered by irrigated multiple aeration method (IR_MA or AWD), 52.8-61.4% compared to baseline practice irrigated continuously flooded. Direct seeded rice (DSR) offers 30-50% reduction compared to the baseline transplanted rice. In this paper, we apply econometric model to estimate the cost of adopting mitigation options using marginal abatement cost (MAC) approach. Findings clearly show initial reductions in emission can be achieved with relatively lower marginal cost. However, consistent with theoretical literature MAC increases at an increasing rate with additional unit of emission reduction. We also find that MAC varies with the scale of operation viz, size of land cultivated under the baseline practice. Higher the scale of operation higher is the MAC. Also, given the scale of operation, MAC varies with the concentration of emission i.e., emission from a given amount of land. Higher the concentration of emission, higher is the MAC. Estimates show if MACs are used to evaluate emission tax level, similar to carbon price, then it will inflict a high additional cost burden of 5-350% of their current cost of production on the farmers unless compensated through policy mechanism. Keywords: Flooded paddy cultivation; carbon price; mitigation potential, mitigation cost, Farming practices, Agricultural land use 1. Introduction Agricultural, Forestry and Other Land Use (AFOLU) sector is the largest contributor of methane emission and accounts for 44% of the total global anthropogenic methane emission, of which 89% is from agriculture (IPCC, 2019). Expansion of paddy (rice) cultivation and livestock (ruminants) rearing are major contributors to this agricultural methane emission (IPCC, 2019; 2022a). Methane, a short-lived greenhouse gas (11.8 years) having high global warming potential (GWP) contributes 18% in global net anthropogenic (human- induced) greenhouse gas (GHG) emissions (IPCC, 2022a; b). Methane emission has grown by 129% during