Page 115 - Research on Financial Development Mechanism and Path of Forestry Carbon Sequestration in Developing Countries under Double Carbon Targets

Chapter 2 Forestry Carbon Sequestration and Carbon Finance

European Union Emissions Trading System (EUETS), which covers a wide range of
industries, including energy, industry and aviation. Participants are required to obtain
sufficient emission quotas to cover their emissions, or to purchase additional quotas if
there is a surplus available for trading. This market mechanism encourages enterprises
to reduce emissions by setting carbon prices, and provides economic impetus for the
development of low-carbon technologies and renewable energy.
2) US carbon market
In the global scope, the establishment of forestry carbon sink financial market has
become one of the important issues in the field of environmental protection. Many
countries have realized that through forestry protection and sustainable management,
a large amount of carbon dioxide can be effectively absorbed and stored to combat
climate change. This understanding has spawned a global carbon market and provided
a platform for carbon trading between countries. Against this background, the United
States, as a key player in the global economy and environmental protection, has attract-
ed much attention for its carbon market development. The development of the carbon
market in the United States can be traced back to the continuous improvement of en-
vironmental protection legislation by the government in recent years and the growing
concern of the society for sustainable development. The country has promoted the pros-
perity of the carbon market by formulating a series of incentive policies to encourage
enterprises and individuals to adopt sustainable business and lifestyle. In addition, the
United States is also committed to providing more opportunities for the carbon market
through forestry projects, especially forest carbon sink projects. In the global pattern of
forestry carbon sequestration financial market, the US carbon market is gradually de-
veloping into a leader, setting a model for sustainable development for other countries.

3.4.2 Successful derivatives trading cases
1) Successful experience in futures market
The futures market plays a crucial role in the trading of forestry carbon sink de-
rivatives. In the successful forestry carbon sequestration derivatives trading case, the
experience of the futures market is one of the factors that cannot be ignored. First, the
futures market provides investors with an effective tool to counter the risk of fluctu-
ations in carbon emissions. Through futures contracts, participants can lock in future
carbon prices, thus avoiding the negative impact of market uncertainty on their portfo-
lios. In addition, the successful experience of the futures market is also reflected in the
fact that it provides a wider opportunity to participate in the forest carbon sequestration

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