Page 84 - Research on Financial Development Mechanism and Path of Forestry Carbon Sequestration in Developing Countries under Double Carbon Targets

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

for many years before the regulated market. It is urgent to establish and perfect the rele-
vant legal system to guarantee the healthy development of forestry carbon sequestration
trading, so that every link of the trading can have legal guidance, and proceed smoothly
under the constraint of standardization, to improve the trading efficiency of forestry car-
bon sequestration market, and to realize the long-term development of forest industry.

Section 2 Forestry Carbon Sequestration Financing

Service Market

2.1 China’s forestry carbon sequestration financing develop-
ment status

Forestry carbon sequestration financing is a branch of carbon finance, which refers
to the process in which forest operators, in order to ensure the smooth development of
forest management activities and other economic activities, integrate funds from capi-
tal suppliers with investment intention or emission reduction demand through relevant
financing channels, so as to meet their capital requirements. Under the background of
global emphasis on carbon emission reduction and sharing obligations, giving full play
to the resource allocation function of financial markets can promote the development of
forestry and enhance the feasibility of the implementation of forestry carbon sequestra-
tion projects. As a natural attribute of forest products, forestry carbon sink determines
its external characteristics, that is, it can be obtained free of charge as a public product.
However, the implementation of the United Nations Framework Convention on Climate
Change and the entry into force of the Kyoto Protocol have made the intangible service
of forest carbon dioxide absorption, an ecological function, tangible, and put forward
for the first time that the carbon dioxide emission right should be regarded as a tradable
commodity, giving the forest carbon sequestration transaction value. In addition, with
the development of carbon sequestration measurement, project methodology and other
related technologies, carbon credits generated from forestry carbon sinks can be mea-
sured more accurately, laying a foundation for forestry carbon sequestration trading and
financing.
With the gradual establishment and improvement of trading system and trading
mechanism, China’s huge forestry carbon sequestration potential will definitely have a
significant impact on the current and future international carbon sequestration market.

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