Insurance and land-use permanence in natural rubber: Implications for land transitions and carbon dynamics from Hainan, China

This study evaluates how China's price-index insurance policy affects natural rubber land transitions in Hainan Province. We utilize satellite imagery to classify natural rubber land based on its unique phenological characteristics, specifically the leaf-off and refoliation signals. We then conduct a village-level analysis using a 2018–2021 panel of 719 villages to study the impact of insurance coverage on these land transitions. To establish causality, an instrumental variable (IV) strategy is introduced. Our results indicate that a 1% rise in the insured share causes a 0.055–0.237% increase in next-year rubber acreage. At the grower level, higher premiums and rubber prices reduce insurance take-up, whereas subsidies increase participation. Policy simulations show that a 1% increase in total subsidy expenditure raises insured acreage by approximately 0.29%, translating into a 0.016–0.069% increase in rubber acreage. The estimated carbon benefits exceed fiscal costs when valued using the social cost of carbon, although not at prevailing domestic carbon-market prices. Future climate projections further indicate the need for dynamic subsidy adjustments to sustain insurance participation under increasing climate risk.