Agricultural carbon financial innovation provides a new path to promote the development of low-carbon agriculture, which is of great significance in realizing the goals of sustainable agricultural development and carbon emission reduction. This study explores the impact mechanism of agricultural carbon financial innovation on agricultural carbon emission reduction. Based on the ternary cycle theory, a panel data model is constructed, and the data of 90 prefecture-level cities in five major agricultural provinces in China from 2014 to 2024 are selected for empirical analysis. The results show that agricultural carbon financial innovation has a significant inhibitory effect on agricultural carbon emissions, with a regression coefficient of -0.177 and significant at 1% confidence level. Agricultural carbon financial innovation promotes agricultural carbon emission reduction through the three paths of small cycle of farmers, medium cycle of industry and large cycle of society, in which the regression coefficient of small cycle of farmers is 0.003, which is significant at 5% statistical level; the regression coefficients of medium cycle of industry and large cycle of society are 0.068 and 0.042 respectively, which are both significant at 10% statistical level. In addition, the level of urbanization development plays a significant moderating role in the agricultural carbon emission reduction effect of agricultural carbon financial innovation, with an interaction term coefficient of -0.633 and significant at the 1% level. Regional heterogeneity analysis found that the coefficient of the effect of agricultural carbon financial innovation on carbon emissions in the western region is -1.0836, with the strongest inhibitory effect. The findings of the study have important policy implications for improving the agricultural carbon financial system and promoting the green and low-carbon transformation of agriculture.
