Agricultural investment under climate policy uncertainty: evidence from China

This study investigates the dynamic, bidirectional relationship between climate policy uncertainty (CPU) and agricultural investment (AGRI) in China. Employing a bootstrap rolling-window Granger causality test on monthly data from January 2012 to December 2024, we find a significant and time-varying interaction between the two variables. The impact of CPU on agricultural investment is predominantly negative, particularly during periods of policy ambiguity or unclear implementation. Conversely, this negative effect can be mitigated or even reversed when strong government support for agricultural modernization provides a stable and predictable environment. Conversely, agricultural investment also influences climate policy uncertainty, with the effects varying over time. The study underscores the complex, time-dependent interactions between climate policies and agricultural investments, highlighting the importance of transparent, stable climate policies to foster agricultural development and resilience.