Enhancing ocean carbon sinks through market mechanism in China: a policy perspective

Purpose As the largest carbon reservoir on Earth, the ocean plays a vital role in addressing climate change. Market mechanisms can enhance the effectiveness of ocean carbon sinks and leverage the ocean’s potential in climate governance. To ensure a stable and effective transition of marine carbon sinks from ecological resources into ecological capital within a market framework, robust policy and legislative support is essential. This paper aims at illustrating China’s practice in enhancing ocean carbon sinks through market mechanisms from the perspective of policy, especially how to establish such market mechanisms with the guidance of policy, while proposing suggestions for future optimization and summarizing inspirations from China’s practices. Design/methodology/approach This paper uses normative, empirical and comparative analysis methods to evaluate the effectiveness of policies China has formulated for establishing market mechanisms of ocean carbon sinks. It conducts a comprehensive review of national and local normative documents, matching them with Chinese empirical examples and pilot projects and then concludes achievements and challenges of China’s policy, together with inspirations from China’s practice. Findings China has initially established a multilevel regulatory system guided by its dual carbon goals, encompassing accounting methods and standards of ocean carbon sink, ocean carbon sink trading mechanisms and protection and restoration of marine carbon ecosystems. These policies have contributed to the diversification of products and value realization mechanisms of ocean carbon sinks. However, several challenges remain, including ambiguous property rights over ocean carbon sinks, inconsistent accounting standards, unsound trading norms and the lack of market-oriented pricing mechanism. To enhance regulatory effectiveness, China should further advance the top-level design of ocean carbon sink management, improve the monitoring, reporting and verification (MRV) system and integrate ocean carbon sinks into the China Certified Voluntary Emission Reduction (CCER) trading system to refine pricing mechanisms. Originality/value This paper provides the first systematic review of China’s both national and local policies related to market mechanisms of ocean carbon sinks. These policies can be classified into three main areas: accounting methods and standards of ocean carbon sink, trading of ocean carbon sink and protection and restoration of marine carbon ecosystems. It also identifies key characteristics of China’s approach, particularly the coordination between central and local governments under the dual carbon goals, which provides inspiration for global application of market mechanisms to enhance ocean carbon sinks.