Conference Agenda

Crop residue burning significantly contributes to air pollution in low- and middle-income countries (LMICs). Instead of burning, farmers can sell their crop residues in the biogas market—an underexplored avenue that could reduce crop residue burning while generating income. However, farmers need compression technology to manage and sell their residues, which most smallholder farmers cannot afford. Therefore, this study tests a novel market-based alternative to crop residue burning by connecting smallholder farmers to the biogas market for their crop residues. I involve 1,024 farmers in a field experiment with two arms: a control arm and a treatment arm. Using high-resolution satellite imagery, I find that the intervention reduces crop residue burning by 32%. The effects are concentrated among farmers who faced high financial constraints, but not among those who faced information constraints at baseline. Crop residue burning also decreases among neighbors, indicating that green technology generates significant spillover effects within villages. The results indicate that the intervention is a highly cost-effective policy for mitigating negative externalities in agriculture. The benefits, measured in terms of CO2 emissions averted, are approximately 54 times greater than the program cost.