Page 169 - Research on Financial Development Mechanism and Path of Forestry Carbon Sequestration in Developing Countries under Double Carbon Targets

Chapter IV Forestry Carbon Sequestration Financial Practice

tion and economic scale, development stage, energy utilization status, etc. Large CDM
project countries, such as China and India, are all large population countries with large
economic scale. They have entered the initial or mid-term stage of industrialization. In
recent years, their economic growth has been rapid, their energy use efficiency is rela-
tively low, and their energy consumption is mainly fossil energy. Therefore, the overall
potential of greenhouse gas emission reduction is large and there are many potential
CDM projects, which is suitable for large-scale development. In many other countries,
the economy is small and has not yet entered the stage of industrialization. There are
few industrial projects. Most of the energy use is based on traditional biomass energy
(fuelwood). The emission reductions generated by energy substitution are small, and
there are few projects suitable for CDM development. Secondly, the implementation
of CDM is closely related to the supporting policies and capacity-building of various
countries. Both renewable energy projects and energy efficiency projects require signif-
icant investment. However, the income of CDM is relatively limited, and it is difficult
to attract private investors to participate only by relying on the income of CDM, which
requires the host country to formulate relevant policies to promote it.
2.1.2 DNA profiles of major Asia-Pacific developing countries

1) The basic concept of 1.DNA
The United Nations Framework Convention on Climate Change (UNFCCC) de-
fines DNA as follows: designated national authority (DNA) refers to the agency ap-
pointed by the Parties to the Kyoto Protocol to authorize and approve CDM project
participation. The establishment of DNA is one of the requirements for the Parties to
the Kyoto Protocol to participate in CDM. DNA’s primary tasks are to assess poten-
tial CDM projects to determine whether they will assist the host country in achieving
its sustainable development goals and to provide participants with a letter of approval
(LoA) for CDM projects. Such a letter of approval must confirm that the project activ-
ity contributes to the sustainable development of the country. LoA will be submitted to
EB to support the registration of the project. As can be seen from the above definition,
the basic function of DNA is to “evaluate potential CDM projects to determine whether
they will assist the host country in achieving its sustainable development goals and pro-
vide participants with the LoA of the CDM project”. However, with the development
of CDM projects, the role of DNA as the sole approver is no longer suitable for the
continuous development of CDM projects, such as providing information and data for
each country to judge additionality and identify the baseline, and helping to determine

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