Page 117 - 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

3.5 Supervision and compliance of forestry carbon sink fi-
nance

3.5.1 Establishment of a regulatory framework

The establishment of regulatory framework is crucial to the healthy development of
forestry carbon sink finance. First, the regulatory framework should clearly specify the
definition and scope of carbon sink financial products, as well as the relevant regulato-
ry bodies and responsibilities. Secondly, the regulatory framework needs to establish
a transparent and efficient market access mechanism to ensure that only eligible mar-
ket participants can enter the carbon sink financial market. In addition, the regulatory
framework should also clarify the operating rules and institutional arrangements of the
carbon sink financial market, including market trading mechanisms, information disclo-
sure rules, etc., in order to safeguard the fairness, fairness and transparency of the mar-
ket. At the same time, the regulatory framework should also strengthen the supervision
of the carbon sink financial market and the risk prevention mechanism. To establish a
sound supervision and management system, including regular review and monitoring
of the behavior of market participants, timely detection and resolution of problems and
risks in the market. In addition, a sound risk prevention mechanism should be estab-
lished, including a risk management system and a risk sharing mechanism, to ensure
the stable operation of the market and the controllability of risks.

3.5.2 Importance of Compliance
The importance of compliance in forestry carbon sink finance should not be under-
estimated. With the development of the carbon market and the international communi-
ty’s increasing attention to the issue of climate change, the compliance requirements
for relevant financial activities are becoming more and more stringent. Compliance
is not only compliance with laws and regulations, but also compliance with industry
standards and ethics. In the field of forestry carbon sequestration finance, compliance
means ensuring that activities comply with relevant laws and regulations formulated by
the government, as well as international carbon market rules and industry best practic-
es. Only by ensuring compliance can financial institutions and enterprises achieve sus-
tainable development in this field, and at the same time provide investors and the public
with confidence and protection.

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