China's forest carbon sinks and mitigation potential from carbon sequestration trading perspective

Abstract

To achieve carbon peaking and neutrality goals, China is establishing a national unified carbon emission trading market, especially including forest carbon sequestration market. This study assesses the potential of China’s forest carbon sinks and mitigation potential. We use the Global Forest Products Model to simulate the dynamic changes in China's forest resources from 2018 to 2060, under different carbon sequestration prices scenarios. The projection results indicate that China's forest carbon sinks will be 1.26 Pg (peta-grams) in 2021–2030 and 6.78 Pg in 2021–2060, giving an offset ratio of 4.9–7.0 % and 13.2–18.2 % of China's projected carbon emission in the same period, respectively. Therefore, China's forest carbon sinks will play an important role in carbon peaking and neutrality goals. Meanwhile, forest carbon trading has the potential to increase China's forest carbon sequestration, although the impact may not be immediately apparent. The additional increase in forest carbon sinks from carbon sequestration trading scenarios will not exceed 1.6 % of China’s total carbon emissions between 2021 and 2030. At the current carbon trading price in China ($6.84/t), the increase in forest carbon sinks resulting from forest carbon trading will give an offset ratio of approximately 1 % of total carbon emissions from 2021 to 2060. When the carbon price rises, this offset ratio is 2.3 % to 3.1 % ($25/t), 4.1 % to 5.6 % ($54/t). China should therefore hasten the integration of forest carbon sinks into the national carbon emission unified market and boost the carbon trading price by policy design and market adjustment, or government directly compensate for the forest carbon sequestration function. For forest carbon sinks to play their role in reducing the carbon neutral cost of society, China should raise the amount of forest carbon sink CCERs (Chinese Certified Emission Reductions) used to offset carbon emission allowances in key emission units.