Rice production management practices in India, aimed at increasing crop productivity, have attracted policy concerns as to how the associated high environmental costs, especially greenhouse gas (GHG) emissions, can be efficiently mitigated. Among others, optimal resource usage and combinations that can ensure sustained production levels and effectively mitigate GHG emissions in rice production at a reduced environmental cost have not been explored. So, this investigation was carried out to assess emission reduction potential from the perspective of environmental and production economics. A Cross-sectional panel data obtained from cost of cultivation surveys by government of India was used for the study. The stochastic nonparametric envelopment of data approach (StoNED) through the framework of convex nonparametric least square regression approach was used to estimate the marginal abatement potential, input readjustment potential and the environmental technical efficiency of paddy production systems in Karnataka state, India. The results of the study on environmental efficiency assessment showed that the production processes of paddy farming were inefficient. This was explained by inefficiencies in farm management and scale operational defects; and inadequate adoption of farm level technology. Variability in production efficiency, energy productivity and sustainability across production systems and farm size were observed. The study further revealed that farmers could adjust and reduce existing input utilization mix by 7% and could enhance economic output by 5%. It is recommended that energy conservation measures through optimum resource combination and technological application be prioritized. Future technological development and adoption should factor environmental costs management practices into productivity enhancement strategies.