Page 175 - 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

Financial support. 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 significant investment. However, the revenue of
CDM is relatively limited, relying solely on the revenue of CERs, which is difficult to
attract private investors to participate in, and requires the host country to formulate rel-
evant policies to promote it.

Section 3 Practice of Forestry Carbon Sequestration
Finance in China

Forestry carbon sink refers to the process of absorbing carbon dioxide in the atmo-
sphere and fixing it in vegetation and soil through afforestation, forest management and
protection activities, so as to reduce the concentration of carbon dioxide in the atmo-
sphere. Forestry carbon sequestration trading is an emission reduction trading mecha-
nism that uses forestry carbon sinks to offset greenhouse gas emissions. The forms of
forestry carbon sequestration projects traded mainly include afforestation, vegetation
restoration, sustainable forest management, and avoidance of deforestation and forest
degradation. With China’s proposal to achieve the goals of peak carbon dioxide emis-
sions by 2030 and carbon neutrality by 2060 (hereinafter referred to as the “two-carbon”
goal), China’s policies and actions to address climate change have been incorporated
into the overall layout of ecological civilization construction and the overall deci-
sion-making of economic and social development. As an important way to increase
the carbon sink capacity and realize the economic value of forest ecosystems, forest
carbon sink transactions will also play an increasingly important role in the process of
achieving the “double carbon” goal. The practice of forestry carbon sequestration trad-
ing originates from the climate cooperation mechanism between developed and devel-
oping countries. The Kyoto Protocol adopted by the Third Conference of the Parties to
the United Nations Framework Convention on Climate Change (hereinafter referred to
as “UNFCCC”) in 1997 clearly stipulates that developed countries should assume the
legal obligation to reduce greenhouse gas emissions. The Clean Development Mecha-
nism (CDM) was also introduced as a cooperative mechanism for emission reduction
between developed and developing countries. Since then, the practice of international
forestry carbon sequestration trading has begun.
With the deepening of international climate cooperation, the mechanisms of for-

161