Deliberate open burning of crop residues emits greenhouse gases and toxic pollutants into the atmosphere. This study investigates the environmental impacts (global warming potential, GWP) and economic impacts (net cash flow) of nine agricultural residue management schemes, including open burning, fertilizer production, and biochar production for corn residue, rice straw, and sugarcane leaves. The environmental assessment shows that, except the open burning schemes, fossil fuel consumption is the main contributor of the GWP impact. The fertilizer and biochar schemes reduce the GWP impact including black carbon by 1.88–1.96 and 2.46–3.22 times compared to open burning. The biochar schemes have the lowest GWP (− 1833.19 to − 1473.21 kg CO₂-eq/ton). The economic assessment outcomes reveal that the biochar schemes have the highest net cash flow (222.72—889.31 US$₂₀₂₂/ton or 1258.15–13409.16 US$₂₀₂₂/ha). The expenditures of open burning are practically zero, while the biochar schemes are the most costly to operate. The most preferable agricultural residue management type is the biochar production, given the lowest GWP impact and the highest net cash flow. To discourage open burning, the government should tailor the government assistance programs to the needs of the farmers and make the financial assistance more accessible.