A Study On The Measurement And Influencing Factors Of Forestry Carbon Sink Price Deviation In China

In September 2020,China announced its commitment to achieving carbon peaking by 2030 and carbon neutrality by 2060.Forestry carbon sink represents a crucial component of China’s carbon neutralization,and plays an important role in facilitating the implementation of carbon peak and carbon neutralization strategies.However,the pricing of China’s forestry carbon sink has historically been characterized by low trading price and volume,along with a tendency towards price deviation.Given that price is a fundamental mechanism through which market forces regulate resource allocation,any significant deviation or underestimation of forestry carbon sink prices may hinder afforestation efforts,negatively impacting both the income of forest farmers and the supply of forestry carbon sink.Therefore,it is imperative to explore ways of restoring forestry carbon sink price to reasonable levels,thereby enabling it to contribute optimally towards resource allocation.Achieving this goal is not only beneficial to promoting the development of China’s carbon sink market and the afforestation industry,but it also represents a critical step towards realizing China’s carbon neutrality objective.This thesis focused on China’s forestry carbon sink pricing,adopting a research approach that involves sorting out the phenomenon of price deviation,measuring the degree of deviation,conducting empirical analysis of the factors influencing deviation,optimizing the analysis of deviation,and presenting policy suggestions for addressing deviation.The primary area of focus in this study are as follows:Firstly,the contribution of China’s forestry carbon sink was measured and the price of forestry carbon sink is compared domestically and internationally.This thesis utilized data from China’s national reserve forest project and employs forestry carbon sink methodology to fit the annual forest carbon sink accumulation function,calculating the total amount of afforestation carbon sink in China and comparing its contribution to carbon neutrality in China.In addition,the thsis compared China’s forestry carbon sinks with international forestry carbon sinks,domestic and foreign carbon quotas,CCER,and other carbon products,examining trading price,trading volume,and trading activity,among other factors.This thesis concluded by summarizing existing problems related to forestry carbon sink trading in China.Secondly,this thesis measured the deviation degree of forestry carbon sink price in China.Using the afforestation cost method and afforestation carbon sink methodology,this thesis constructed the cost model of China’s forestry carbon sink supply based on the forest land net present value model and land opportunity cost model,and measured the cost of forestry carbon sink supply based on data from China’s reserve forest project.Additionally,this thesis measured the marginal cost of carbon dioxide emission reduction using the directional distance function and shadow price model based on input-output data from listed thermal power companies in China.This thesis constructed the equilibrium price model of China’s forestry carbon sink using Rubinstein’s bargaining game model to measure the equilibrium price of China’s forestry carbon sink.The deviation degree of forestry carbon sink price in China was measured by the ratio of forestry carbon sink equilibrium price to forestry carbon sink trading price over the years,and the thesis predicted the deviation period of forestry carbon sinks in China by fitting the price trend curve.Then,the thesis conducted an empirical analysis on the influencing factors of Chinese forestry carbon sink price deviation.Using a panel regression model and panel data from six provinces and cities in China where pilot carbon markets were located during 2014-2021,the thesis conducted an empirical test on the influencing factors of forestry carbon sink price deviation.The thesis tested the robustness of the regression model by replacing variables,supplementing variables,and replacing models,as well as analyzed the heterogeneity of the model from the perspectives of regional heterogeneity and product heterogeneity.The deviation of forestry carbon sink price was discussed and analyzed from the perspective of carbon market policy impact.Finally,this thesis optimized the price deviation of Chinese forestry carbon sink considering various factors such as demand,supply,market trading mechanism and macro-economy.A new trading price curve for forestry carbon sink was simulated using the double logarithm function and adjusting significant variables.The resulting curve was then compared with the fitted trading price curve to evaluate its effectiveness in optimizing prices.The conclusions of this thesis are as follows:First,the gap between China’s forestry carbon sequestration and international forestry carbon sequestration and other carbon products at home and abroad in terms of trading price,trading volume and trading activity during 2014-2021 is compared,indicating that there is a certain price deviation.The research shows that by 2030 and2060,China’s carbon dioxide emissions will be about 10.5 billion tons and 1.9 billion tons respectively,and the newly added carbon sinks of national forest will be 366million tons and 889 million tons,respectively,contributing 3.49%and 46.79%to China’s"carbon neutrality".Secondly,the average supply cost of China’s forestry carbon sinks is 140.64yuan/ton,while the average marginal CO₂emission reduction cost of China’s thermal power generation enterprises is 3646 yuan/ton.The average equilibrium price of China’s forestry carbon sinks is 141.31 yuan/ton.From 2014 to 2021,the average deviation degree of China’s forestry carbon sink price follows an inverted"V"shaped structure,with values of 7.77,8.85,19.13,28.85,31.04,26.42,7.80 and 5.34,indicating that with the implementation of carbon neutrality strategy and the gradual construction as well as improvement of carbon sink market,the deviation degree of carbon sink price in the six pilot carbon markets in China gradually converge to a certain range.Thirdly,through the analysis of the factors influencing the deviation of forestry carbon sink price in China,it is found that the total carbon emission,carbon quota trading price,carbon quota trading activity,carbon sink trading activity,regional thermal power generation share has a significant negative relationship with the deviation of forestry carbon sink price.The price of domestic wood and the cumulative days of annual carbon sequestration transaction had a significant positive relationship with the deviation of forestry carbon sequestration price.According to the test results of regional heterogeneity,the central and western regions of China have greater influence on the deviation of forestry carbon sink price than the eastern regions.According to the results of product heterogeneity test,the inclusion of forest carbon sequestration products in separate accounting transactions is more conducive to reducing price deviation than that in the regions without separate accounting transactions.Fourthly,through optimization analysis of China’s forestry carbon sink price deviation,it is known that adjusting the demand combination variables market trading mechanism combination variables,and demand and market trading mechanism combination variables can make the new forestry carbon sink price intersect with the equilibrium price about 7 years,3 years,and 8 years earlier than the fitted price,respectively.Adjusting the supply variables can make the new forestry carbon sink price intersect with the equilibrium price about 3 years later.Adjusting macroeconomic variables may make the new forestry carbon sink trading price curve more deviated from the equilibrium price.Based on the above research,this thesis proposes policy suggestions from three aspects:improving China’s forestry carbon sink supply policies,demand policies,and carbon sink trading rules.Firstly,it is necessary to increase financial support to reduce the production cost of afforestation enterprises,encourage the development of forestry carbon sink financial derivatives,and reduce the transaction costs of carbon sinks via improving the methodology of carbon sinks.Secondly,it is helpful to vigorously support emission control enterprises to carry out energy-saving and carbon reduction technology transformation,and timely expandthe inclusion of other industries in the national carbon market for trading;moderately reduce the amount of carbon quotas issuance.Thirdly,it is meaningful to increase the carbon offset ratio of CCER and forestry carbon sink projects;timely separate forestry carbon sinks from CCER projects;innovate and establish pricing mechanism for forestry carbon sink;establish a Chinese or global voluntary emission reduction trading market;encourage more social entities to voluntarily purchase forestry carbon sinks;actively cooperate with the global carbon market on carbon offset mechanisms.The innovation of this thesis is mainly reflected in four aspects:it enriches and improves China’s forestry carbon sink equilibrium price model and China’s forestry carbon sink pricing mechanism,and innovatively carries out empirical analysis of China’s forestry carbon sink price deviation factors and simulation analysis of forestry carbon sink price deviation optimization.