The country’s first mangrove carbon sink auction is scheduled to take place in Shenzhen on Tuesday, with a starting price of 183 yuan (US$25.51) per metric ton.
The proceeds from the auction will be channeled into the city’s treasury to bolster mangrove conservation and restoration initiatives, Shenzhen Evening News reported.
Wei Fulei, deputy director of the China Development Institute’s New Energy and Low Carbon Research Center, highlighted the significance of mangrove carbon sinks. “Mangroves absorb carbon dioxide, creating blue-carbon sinks, which possess significant environmental value following third-party authentication,” Wei was quoted as telling the News.
Typically, a green carbon sink refers to carbon stored by terrestrial plants through photosynthesis, while a blue carbon sink refers to carbon captured by coastal and marine ecosystems, according to Wei.
Currently, blue carbon trading predominantly revolves around three ecosystems endorsed by the Intergovernmental Panel on Climate Change: mangroves, seagrass meadows, and salt marshes.
Wei anticipates that blue carbon will likely become a major player in carbon emissions trading. “Blue carbon is an up-and-coming commodity,” Wei said. “Although mangrove carbon sinks are relatively scarce, oceanic carbon is widely available.”
The initial price set for the Shenzhen mangrove carbon sink auction is nearly 2.45 times higher than the closing comprehensive price in the national carbon market Sept. 18, raising queries among industry insiders regarding its rationale.
Wei clarified that the concept of a mangrove conservation carbon sink is distinct from carbon offsets directly traded in the market. Market-traded carbon offsets represent binding commitments for companies to fulfill their carbon emission quotas. Any emissions that exceed a company’s quota must be accounted for through market transactions, making it obligatory.
In contrast, the mangrove conservation carbon sink auction belongs to the voluntary carbon market and is not obligatory. Enterprises participating in this auction are primarily motivated by a sense of social responsibility.
Li Nuyun, secretary of the China Green Carbon Foundation, asserted that the appropriateness of the auction’s starting price should not be questioned because the carbon sinks primarily reflect the voluntary carbon reduction efforts of the purchasers instead of obligatory carbon reductions. “They serve different purposes, and naturally, their prices differ,” Li said.
Both Wei and Li are optimistic about the future of blue carbon trading because they believe that it signifies a new chapter in Shenzhen’s carbon market.