Page 89 - Research on Financial Development Mechanism and Path of Forestry Carbon Sequestration in Developing Countries under Double Carbon Targets

Chapter 2 Forestry Carbon Sequestration and Carbon Finance

the help of market forces, which is conducive to achieving a virtuous circle of the car-
bon market itself. In addition, it is necessary to strengthen the low-carbon publicity of
financial institutions. The development of forestry carbon sequestration projects cannot
be separated from a large amount of financial support. Although forestry carbon seques-
tration has positive externalities, its risk level is also high. The government is required
to publicize the importance and urgency of developing green financial business and
provide appropriate policy and economic support.

2.3.2 to encourage financial innovation in the field of forestry carbon sinks
The importance of financial market support for forestry carbon sequestration proj-
ects is self-evident. Foreign financial institutions have high participation in the carbon
market. On the contrary, the financial institutions in our country have not carried out
much green financial business, mainly in the form of providing credit, and neither
the scale of credit nor the number of financial institutions willing to provide loans are
enough. In addition, only the power generation industry is currently included in the
mandatory emission reduction system, which makes it difficult to carry out internal
financing in the supply chain. Therefore, it is necessary to learn from the development
experience of developed countries, encourage financial innovation in the field of for-
estry carbon sequestration, explore feasible innovative financial instruments, enrich the
financing forms of forestry carbon sequestration, and provide a strong impetus for the
development of carbon sequestration market.
1) Carbon credit mortgage loan
The lack of suitable pledge for forestry carbon sequestration projects is the main
reason why financial institutions such as banks are not willing to support forestry car-
bon sequestration projects. The owners of forestry carbon sinks with good reputation
can be explored to apply for loans from the banks with their stable carbon revenue
rights as pledge, so that the banks can obtain reliable pledge, and the enthusiasm of
providing loans to the owners of forestry carbon sinks will naturally increase. However,
due to the uncertainty of carbon revenue, banks should pay attention to the risk control
when carrying out carbon credit mortgage loan business, control the loan amount and
loan term, and regularly appoint professionals to monitor the implementation of forest-
ry carbon sequestration projects.
2) Issue of forestry carbon sequestration bonds
The issuance of bonds for financing has the advantages of low financing cost, wide
financing target and large financing scale. It is suitable for the characteristics of long

75