Page 193 - 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

4.4 Promoting Forestry’s Integration into the Carbon Market
in a Steady and Orderly Way

The first is to determine the order in which forestry will be incorporated into the
carbon market. For example, New Zealand first introduced forestry into the carbon
emission trading system in 2008, and then gradually introduced all sectors such as con-
ventional energy, transportation fuel, industrial gas, waste resource treatment, and agri-
culture and animal husbandry into the carbon emission trading system. The contribution
of forestry carbon sinks to New Zealand’s emission reduction reached 25%-30%. The
second is the gradual transition of pricing from regulation to market. For example, in or-
der to prevent competition for emission reduction and carbon sink projects in New Zea-
land, the carbon trading unit is uniformly defined as a “New Zealand unit” and the price
of each “New Zealand unit” is fixed at S $25 during the transition period, which will
be gradually released after the transition period. Australia stipulates that a fixed carbon
price (A $23/t) will be implemented in 2012-2015, with a transition to a flexible price
in 2015-2018 and a floating price in 2018; California has set the auction price at a mini-
mum of $10 a tonne (2012) and will increase by 5% a year thereafter (plus inflation).

4.5 build a diversified forestry carbon sink financing mecha-
nism

International experience shows that financial, tax, financial and other supporting pol-
icies play an important role in the financing of forestry carbon sequestration projects.
First, the fiscal and taxation policies are strongly supported. For example, in Ja-
pan’s forestry subsidy policy, subsidies are given on the basis of the cost of forestation,
40% of the standard subsidy is given to land of general nature, and 68% of the standard
subsidy is given to poorer land and water sources. The central government and the lo-
cal government shall compensate the public welfare forest for ecological benefits in a
ratio of 2:1. In addition, Japan also takes care of other aspects, such as tax relief, tax
base composition, tax extension, etc. The United States not only established afforesta-
tion subsidy fund and afforestation trust fund for public forests, but also implemented
tax relief policy; Subsidies to private insurance institutions handling forestry insurance
business. Mexico’s consumption transfer payments and government budget are largely
used for forestry carbon sequestration projects. South Korea Subsidies Reporting Fees

179