Page 183 - 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

tems, and incorporated it into the overall layout of national ecological civilization con-
struction and the overall economic and social development. At the present time when
the global climate governance pattern is evolving, the forest carbon sink trading market
in China has certain potential in the process of promoting the green “Belt and Road”.

3.2.1 the changing trend of institutional environment: from the international
market to the domestic market

The change in global climate governance pattern has pushed the practice focus of
forestry carbon sequestration trading in China from international to domestic. After
the expiration of the first commitment period of the Kyoto Protocol, the international
consensus on global climate governance based on “developed countries-developing
countries” has gradually weakened, and the international community has increasingly
entrusted developing countries with the responsibility of emission reduction. With the
“double carbon” target proposed by China and the establishment of a national carbon
market, the practice focus of forestry carbon sequestration trading in China is also fac-
ing a shift from international to domestic, with the institutional environment changing
from an international emission reduction trading mechanism dominated by international
cooperation projects to a domestic emission reduction trading system under the overall
planning of the national carbon market. The number of forestry carbon sink projects
will usher in a new round of growth after experiencing the downturn of CDM projects.
However, it should be noted that as the construction of the carbon emission trading
market in China is still in its initial stage, the quota allocation and industry emission
limitation standards for the emission limitation industry are still being explored and
adjusted, leaving an unstable space for the voluntary emission reduction trading mar-
ket. The CCER project in China was started in 2012 and suspended in 2017. During
the five-year operation period, there was a general oversupply of forest carbon sink
transactions and the price of forest carbon sink was low. Taking Fujian Province as an
example, Fujian Province started three types of forestry carbon sequestration projects
in 2016: carbon sequestration afforestation, forest management carbon sequestration
and bamboo forest management carbon sequestration. As of August 2019, a total of
seven forestry carbon sequestration projects in Fujian Province have been issued by the
competent authorities, covering an area of 30,666.67 hectares with a carbon sequestra-
tion volume of 1.18 million tons. However, in comparison, a total of 28 forestry carbon
sequestration projects have been submitted in Fujian Province, of which about 3 mil-
lion tons have not been issued. Since the opening of the market at the end of 2016, the

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