Pilot carbon sink trading yields profit, eco benefits in rural China

XIAMEN, Jan. 26 (Xinhua) -- There was considerable excitement among the locals when Junying Village of the city of Xiamen, east China's Fujian Province, raked in over 14,000 yuan (about 2,000 U.S. dollars) in exchange for the two-year carbon sink production of its tea gardens.

"It is an astounding fact beyond our imagination that our tea gardens can also make money by selling their 'fresh air,'" said Gao Quanwei, Party chief of the village.

The 66-year-old village cadre admits that at first it was tough for him to explain to villagers exactly what the unfamiliar and novel concept of "carbon sink" meant. "Though the profit produced by selling 'air' is not that huge, this pioneering practice does allow rural residents to think out of the box and open up a new development path for the traditional agriculture sector."

On May 5, 2022, the municipal property rights exchange center of Xiamen put China's first agricultural carbon sink trading platform into operation and issued the country's first pair of agricultural carbon offset tickets to two villages in Tong'an District -- one to Junying Village and the other to the neighboring Baijiaoci Village.

Xiamen-headquartered Yinlu Group, a leading food company in China's canning and beverage industry, bought the agricultural carbon sink generated by the two villages, which meant buying extra carbon emission quotas to achieve ultimate carbon neutrality.

Agricultural carbon sink is related to the process or mechanism of reducing greenhouse gas emissions through absorbing carbon dioxide in the atmosphere with the help of agricultural cultivation, vegetation restoration and other measures.

As its name implies, an agricultural carbon ticket refers to a type of voucher through which third-party agencies can monitor and evaluate the crops owned by the ticket holder and compile a report based on these monitoring and evaluation efforts. The ticket reflects the report and is used to confirm the total amount of carbon sink generated by the agriculture sector within a designated area.

Junying Village alone boasts more than 6,500 mu (about 433 hectares) of tea gardens. Of these, the 5,715 mu of tea gardens located within the village have been approved by the official carbon sink certification system.

Based on the total annual carbon dioxide consumption capacity of the tea gardens, their carbon sinks in 2020 and 2021 hit nearly 2,500 tonnes. After evaluation, the municipal property rights exchange center finally traded the carbon sinks at the price of 6 yuan per tonne.

Junying Village will use these funds for the short-term management and maintenance of tea garden equipment. Another 1,000 tonnes of the village's agricultural carbon sink will be transferred to the center at the price of 15 yuan per tonne, which means a total ecological income of 15,000 yuan for local villagers.

Li Peigong, a professor from Shanghai Lixin University of Accounting and Finance, hailed the success of these transactions involving the carbon sinks of tea gardens of Xiamen and said they are indicative of the new economic potentials of China's rural revitalization.

It proves that "green is the new gold," or in other words -- ecological benefits can be made tangible for locals economically through agricultural carbon sink trading, Li explained.

In addition, by encouraging farmers to increase local carbon sink levels to secure a better ecosystem, not only their income is boosted and common prosperity promoted, but the climate resilience of the local agricultural systems is also strengthened, which further helps reduce environmental pollution, the professor added.

Junying and Baijiaoci, which both belong to Lianhua Town in Tong'an District of Xiamen, together form "the mountainous area of Xiamen Special Economic Zone." Each has an average elevation of about 1,000 meters and both have been developing tea planting as their backbone industry over the years, while these villages have also become popular destinations for eco-tourism lovers, especially urbanites.

Huang Xi, deputy general manager of Xiamen Property Rights Exchange Center, said Lianhua Town was chosen to play the role of the center's agricultural carbon sink pilot zone thanks to its abundant tea garden resources.

The center also plans to tap into its green finance service platform to continuously expand the application scenarios of green finance in rural areas, Huang added.