Market-based instruments such as agricultural carbon credit programs are being encouraged as a way of mitigating climate change, and at the same time, encouraging farm-level sustainability. The review paper consolidates the literature presented throughout the world in agricultural carbon credit initiatives by analysing the expansion of research, theoretical and methodological frameworks, and determining factors that define the participation, result and limitations of the farmers. The systematic literature review was conducted in line with PRISMA, using the Scopus and WoS databases. A multi-stage screening method was used to select seventy-nine peer-reviewed articles published between 2005 and 2025. The Theory-Context-Characteristics-Methodology (TCCM) framework and the Antecedents-Decision-Outcomes (ADO) framework were used together with bibliometric analysis to assess the trends in research, drivers of participation and system-level outcomes. The existing literature is dominated by behavioural and economic theories as compared to institutional and systems-based views that are relatively undeveloped. The involvement of the farmers depends on a mixture of the economic incentives, the institutional trust, policy stability, transaction costs, and social and informational factors and not necessarily on the carbon prices themselves. Even though carbon credit initiatives can create supportive economic, social and environmental impacts, these impacts are extremely contextual and unevenly distributed, hence, skewed against smallholder farmers. Carbon credits can promote climate mitigation in agricultural contexts when entrenched in consistent policy systems and reliable institutional structures. • Since 2020, the research on agricultural carbon credits has increased rapidly. • The further involvement is conditional upon the trust and the policy stability and the cost of the transactions. • Existing studies on carbon credit are dominated by behavioural and economic theories. • Carbon credits have unequal advantages that occur on a local scale. • Inclusive and credible carbon markets require designs at the system level.
J et al. (Mon,) studied this question.