Page 177 - 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

estimation. In contrast, there is less discussion on the practical experience of forestry
carbon sequestration trading and the evolution process of its institutional environment
in China from the international market to the domestic market in the past 20 years. As
the largest developing country in the world, China is playing an increasingly important
role in influencing and promoting the global climate governance process and reform
agenda. Under the background of global climate governance transition, the forestry car-
bon sequestration trade in China is currently in the transition stage of the policy envi-
ronment: on the one hand, the change of global climate governance pattern has pushed
the practice field of forestry carbon sequestration trade in China from international to
domestic; On the other hand, the construction of ecological civilization in China is un-
dergoing historic and overall changes. The development and trading of forestry carbon
sinks ushered in a new round of favorable policy window.

3.1 Development Process of Forestry Carbon Sequestration
Transaction in China

The development process of forestry carbon sequestration trading in China is, to
a certain extent, a microcosm of the evolution of China’s role in global climate gover-
nance. In the first decade of the 21st century, as the largest developing country in the
world, China actively participated in the international carbon emissions trading mecha-
nism under the UNFCCC, namely, as the host country of carbon sinks “sold” to devel-
oped countries, and implemented a number of CDM forestry carbon sink trading proj-
ects. However, with the end of the first commitment period (2008-2012) of the Kyoto
Protocol, especially after the conclusion of the Paris Agreement in 2015, the global
climate governance pattern has changed, and the international community has redefined
the emission reduction responsibilities of developing countries, so that the Kyoto Proto-
col has weakened the international climate cooperation mechanism based on the dichot-
omy of “developed countries and developing countries”. Instead, emerging economies
such as China began to propose their own “national independent contribution (NDC)”
in response to global climate change under the “common but differentiated” initiative,
and established carbon emission trading mechanisms at the regional and national levels.

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