High in the remote mountains of western Fujian Province, Changkou—part of Sanming Prefectural City—became the first village to launch a new forestry carbon ticket system in May 2021. Changkou farmers have long received little benefit in managing forests because of fragmented forest land, high investment risks, and limited ownership rights. To solve those problems, the Sanming Forestry Bureau issued tickets to forestry farmers, granting them the right to receive stocks on their plots of forests by cooperating with farms in a certain period. Meanwhile, the carbon tickets grant farmers the right to earn carbon emission credits for their land and trees.

This forestry carbon ticket system was born from the 2008 Programme for Deepening Reform of the Collective Rights System jointly issued by the Chinese Communist Party and the State Council. The ticket system promotes more productive forestry by stabilizing forest rights and giving farmers more financial support and flexibility in managing their land.  

With the carbon ticket system, forest carbon sink stocks now have monetary value that corporate investors who are looking to offset their emissions can buy. Some local governments have become key liaisons helping farmers connect with the businesses seeking carbon credits. This inflow of investment helps farmers cover the extra costs of sustainable forestry management. If widely promoted, the forestry rights reform can be a golden carbon ticket to help decarbonize China. 

Rebooting Forestry Rights 

China has been experimenting with top-down collective forest reform since the 1980s, with every revision seeking a balance between effective forest protection and benefits for forestry farmers. These reforms catalyzed local government innovations like the Sanming Forestry Bureau’s forest ticket system. This nature-based solution has been described by villagers as “selling good air for money,” as it mitigates carbon emissions and promotes local growth.

Example of a forest carbon ticket issued by Sanming’s Forestry Bureau

The realization of this forestry carbon ticket is inseparable from broader property rights reform in China. To simplify forest rights registration, Sanming updated rules around collective ownership of forest land, contracting, and operational rights—collectively known as the ‘three rights.’ These reforms replaced the original property registration system that only allowed registering one type of right for a piece of forest land. This comprehensive certification process grants farmers broader rights for forest land, making it easier for them to secure forestry production.

Getting Cash for Carbon

The results of this carbon ticket system have been profound in increasing forest coverage for carbon sinks in Sanming. In 2021, Chankou village converted 213 hectares (ha) of protected forested land to sequester 12,723 tons of carbon emissions. The village sold forest tickets worth more than 140,000 yuan ($19,600) to companies like Shanghai Huizhou Construction Group Co. Each villager in turn received dividends worth 150 yuan ($22). With their new cherished “carbon-for-cash” tickets, some families have used carbon tickets as dowry for weddings.

As of 2022, 80% of the villagers in Changkou have been employed in forestry protection and annual per capita income rose to 30,000 yuan ($4200) — 15 times more than annual per capita income in 1997. Sanming’s Jiangle County has developed 21 forestry carbon ticket projects, with 6,000 ha of forest land sequestering an estimated 334,000 tons of carbon sinks, increasing the total village income by approximately 630,000 yuan ($88,200) per year. 

Currently, Sanming carbon sinks have completed nearly 30 million yuan ($4.2 million) in carbon ticket transactions. The successful experiences with forest carbon tickets in Fujian have encouraged other provinces to launch similar programs, including Guizhou, Shaanxi, and Anhui provinces. 

Deepening Protection and Biodiversity of Forests

The Chinese government’s new priorities for forests is to diversify strategies for improving forest land productivity and biodiversity. Although the new forest ticket program has stabilized property rights for the farmers and encouraged forestry development, more work lies ahead. Carbon stock calculations are still only based on standing tree stock, ignoring other aspects of forest ecosystem services like biodiversity. A rich biodiverse forest can sequester more carbon and generate other sources of income for communities. Future reforms of the forestry carbon tickets and other measures to improve forest health will eventually need to capture the full scope of forests’ ecosystem benefits. 

As groundbreaking as it is, the forest carbon ticket system lacks a national standard, complicating its implementation across regions. However, the growing government pressure to achieve carbon neutrality by 2060 is galvanizing many pilots on forest carbon credit. These pilots combined with the relaunched China Certified Emissions Reductions scheme will accelerate forest sequestration and decarbonization in China.