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Article

How to Incorporate Blue Carbon into the China Certified Emission Reductions Scheme: Legal and Policy Perspectives

by
Xin-Wei Li
1 and
Hong-Zhi Miao
2,*
1
School of Law, Dalian Maritime University, Dalian 116026, China
2
College of Transportation Engineering, Dalian Maritime University, Dalian 116026, China
*
Author to whom correspondence should be addressed.
Sustainability 2022, 14(17), 10567; https://doi.org/10.3390/su141710567
Submission received: 19 July 2022 / Revised: 15 August 2022 / Accepted: 22 August 2022 / Published: 24 August 2022
(This article belongs to the Special Issue Marine Conservation and Sustainability)
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Abstract

:
Blue carbon, the carbon sequestered in vegetated coastal ecosystems, is a potential and practical approach to combating climate change. Many countries have committed to integrating blue carbon into the climate change law and policy framework. As a significant carbon-emitting country, China has abundant blue carbon resources but suffers a significant loss of coastal habitats. Therefore, blue carbon should become a primary focus in China’s climate change law and policy. Given the successful experience in terrestrial biosequestration projects, the inclusion of blue carbon into China’s carbon trading market can be an essential move and is the primary purpose of this paper. The China Certified Emission Reductions (CCER) scheme is an effective supplementary mechanism to the national carbon trading market. To incorporate blue carbon into the CCER scheme, this article first analyzes the legislative framework underpinning the CCER scheme and indicates some critical factors, including methodology, project boundaries, legal rights, additionality, project period, and crediting period. Subsequently, the article discusses these critical factors in depth to identify legal issues that may emerge and provides several feasible solutions. (i) Dedicated methodologies need to be developed for blue carbon projects, which include a broader definition for carbon abatement activities. (ii) The new national marine functional zoning should delineate zones for the purpose of developing blue carbon projects. (iii) The current authorization system for the right to use sea areas could be used to secure a legal right to develop blue carbon projects. (iv) Additionality requirements should be appropriately adjusted. (v) Extended project periods and crediting periods would be needed. This article offers novel pathways for including blue carbon in China’s climate change law and policy framework, thus contributing to achieving its 2060 carbon neutrality goal.

1. Introduction

Climate change has and will increasingly have significant and harmful impacts on human and natural systems [1]. To combat climate change, the international community reached the United Nations Framework Convention on Climate Change [2] and its Kyoto Protocol [3]. Furthermore, the parties to this Convention adopted the Paris Agreement at the UN Climate Change Conference [4]. The Paris Agreement requires all parties to submit their Nationally Determined Contributions (NDCs) to achieve carbon neutrality in the second half of this century. Carbon neutrality refers to a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases (GHG) [4].
Agriculture, Forestry, and Other Land Uses (AFOLU) activities are critical to the success of carbon neutrality because they lead to both sources and sinks of CO2. Precisely, anthropogenic land use activities (e.g., management of croplands, forests, grasslands, and wetlands) can remove CO2 from the atmosphere. Meanwhile, plant respiration, decomposition, and combustion of dead plant biomass and soil organic matter release CO2 into the atmosphere [5]. According to the United Nations Intergovernmental Panel on Climate Change, from 2010 to 2019, managed and natural terrestrial ecosystems absorbed around one-third of CO2 emissions [1]. Therefore, AFOLU activities play an essential role in carbon biosequestration.
Biosequestration science and policy had focused primarily on terrestrial ecosystems. However, the vegetated habitats of the ocean are the most intense carbon sinks on the planet. Generally, mangroves, salt marshes, seagrass meadows, and other ocean’s vegetated habitats compromise only 0.05% biomass of the terrestrial plant, but their carbon storage capacity each year is comparable to that of the terrestrial plant [6]. The carbon stored in them is the equivalent of up to half of the emissions from the entire global transportation sector. The protection and restoration of these ecosystems can offset 3–7% of current fossil fuel emissions within 20 years [6]. These ecosystems form the earth’s blue carbon sink. Thus, blue carbon refers to the carbon stored and sequestered in mangroves, salt marshes, and seagrass meadows [7].
The valuable role of blue carbon in sequestering carbon has been verified by massive scientific research [7]. The blue carbon ecosystems can store a large amount of carbon in soils (sometimes up to several meters deep) and biomass above and below ground [8]. Specifically, salt marshes and mangroves can store more carbon per hectare than tropical forests [8,9]. Seagrass meadows are among the lushest and most productive ecosystems on the planet, which form significant components of the oceanic carbon budget [10]. Moreover, blue carbon ecosystems are incredibly long-lived compared to terrestrial ecosystems. The mangrove systems in the Belizean islands have sediment carbon deposits over 7000 years old [11]. Seagrass meadows at Portlligat Bay have sequestered carbon for the last 6000 years [12]. Meanwhile, tropical rainforests can only absorb CO2 for decades or centuries at best [13].
Blue carbon ecosystems are under significant threat from human impacts and climate change. It was estimated that approximately one-third of blue carbon ecosystems had been lost in a few decades, primarily due to anthropogenic activities, such as coastal development and pollution [9,14]. Specifically, mangroves and salt marshes have been damaged by aquaculture, deforestation, fisheries, diversion of freshwater, land reclamation, invasive species, trophic cascades, etc. [14,15,16,17]. Seagrasses are in decline mainly because of coastal constructions, aquaculture, anchoring, fishing, eutrophication, dredging, siltation, etc. [18,19,20,21]. In addition, the adverse effects of climate change, particularly sea-level rise and increased temperatures, are significant threats to blue carbon systems. Sea-level rise could erode and inundate mangroves and salt marshes [16,22] and reduce available light to support their photosynthesis [23]. Seagrass meadows are highly susceptible to the effects of warming seawater, causing a dramatic decline in shoot abundance [24].
Given the carbon sequestration values of blue carbon ecosystems and the significant threats they face, the international community is committed to integrating blue carbon ecosystems into climate change law and policy framework. Different efforts have been made, e.g., to encourage the inclusion of blue carbon in NDCs [25], develop a global blue carbon market [26], and raise new investments in projects that protect and restore blue carbon resources [27,28]. A recent report indicates that 27 countries, including China, have integrated blue carbon mitigation contributions into their NDCs, including ocean carbon storage and the conservation, replantation, or management of mangroves, salt marshes, seagrasses, or other marine ecosystems [29].
The inclusion of blue carbon into the climate change legal and policy framework is crucial for China for two purposes: to support the protection of blue carbon ecosystems and to better offset China’s terrestrial GHG emissions. To be specific, China has a 32,000 km coastline, including its islands. Along the coastline, blue carbon habitats (i.e., mangrove, seagrass, and salt marsh ecosystems) and seaweed farms cover more than 3000 km2 [30]. However, the threats and stresses on coastal ecosystems have increased due to population growth and rapid economic development. In only two decades, large amounts of coastal land, including mangroves and salt marshes, had been reclaimed or severely damaged. The reasons include enormous population demands for land, unawareness of coastal wetlands values, misguided reclamation policies, and lack of environmental laws and regulations [31]. China, which accounted for 27% of global GHG emissions [32], has adopted the Paris Agreement and pledged to reach the CO2 emissions peak before 2030 and achieve carbon neutrality before 2060 [33]. To this end, blue carbon should become a primary focus in China’s climate change law and policy. In addition, blue carbon would align with other national sustainable development strategies, such as improvement of marine environmental quality, marine ecological protection and restoration, “Beautiful Bay” construction, and enhancement of marine ecological and environmental governance capacity [34].
Blue carbon should be included in a viable carbon trading market, similarly to forest carbon [26]. On the one hand, a blue carbon market can substantially improve the capital value of blue carbon resources and attract private-sector investments into ecological restoration, ultimately yielding more socio-economic benefits [7]. On the other hand, increased investments in blue carbon projects through a blue carbon market could provide increased protection or restoration of blue carbon ecosystems, resulting in a “win-win” for both climate change regulation and coastal habitat conservation [35]. According to the current law and policy, the China Certified Emission Reductions (CCERs) scheme is an effective supplementary mechanism to the national carbon emissions trading system (ETS). CCERs refer to the GHG emissions reductions generated by projects such as renewable power generation, waste-to-energy projects, and forestry projects, which are quantified, certified, and registered [36]. The participants in the national ETS can use CCERs to offset a certain percentage of their China Emissions Allowances (CEA) deficits or trade the excess ones [37]. By April 2020, 1047 CCER projects were successfully registered, and 287 had their emission reductions approved for trading. The 1047 registered CCER projects are expected to generate 139.57 million metric tons of CO2 emission reductions per year, and the total CO2 emission reductions approved of the 287 projects reached about 52.83 million metric tons [38]. Furthermore, both the establishment of the 2060 carbon neutrality goal and the launch of the ETS have led to the release of CCER demand. In 2021, 169.68 million metric tons of carbon emissions allowances were traded under the CCER scheme, compromising almost 42% of the total 412.05 million metric tons traded in the ETS [39].
However, blue carbon has not been included in the CCER scheme. The inclusion of blue carbon into the CCER scheme will not require any substantial reconstruction of current climate change law and policy. The successful application of the CCER scheme to terrestrial biosequestration projects can provide a preliminary legal framework for the inclusion of blue carbon projects. Moreover, the Ministry of Ecology and Environment of China has announced that serious considerations will be made for incorporating blue carbon into CCERs to improve the GHG voluntary emissions reduction trading system [40]. Therefore, the time is ripe to analyze the inclusion of blue carbon in the CCER scheme.
This article mainly addresses the issue of how to incorporate blue carbon into the CCER scheme and is organized as follows. Section 1 introduces the background and clarifies critical concepts and issues such as carbon neutrality, blue carbon, and the CCER scheme to set the foundation for the discussions in the following sections. Section 2 provides an overview of the Chinese legislative framework underpinning the CCER scheme and indicates some key factors, including methodology, project boundaries, legal rights, additionality, project period, and crediting period. Section 3 analyzes these critical factors to find the legal issues that may emerge in applying them to blue carbon projects. Subsequently, these legal issues are considered in depth. To address them, some feasible solutions are also proposed. Section 4 concludes the article and puts forward specific suggestions for incorporating blue carbon into the CCER scheme: (i) dedicated methodologies need to be developed for blue carbon projects, which include a span of carbon abatement activities; (ii) the new national marine functional zoning should delineate zones for the purpose of developing blue carbon projects; (iii) the current authorization system for the right to use sea areas could be used to secure a legal right to develop blue carbon projects; (iv) additionality requirements should be appropriately adjusted; and (v) extended project periods and crediting periods would be needed.

2. Overview of the Legislative Framework Underpinning the CCER Scheme

This section will provide an overview of the legislative framework underpinning the CCER scheme and indicate several critical factors. China began to implement the CCER scheme in 2012. To guide its development, the National Development and Reform Commission (NDRC) published a set of Interim Measures [36] and Guidelines [41]. Recently, the Ministry of Ecology and Environment (MEE) promulgated a series of Trial Measures [42] in 2020, which provide a clear definition for CCERs and specify that CCERs form a significant supplementary part of the ETS. In addition, a high-level law in this area is also on the way, i.e., the Interim Regulations [37]. Moreover, the State Council announced that the Beijing Green Exchange would host the CCER national trading platform [43]. This certainly shows that the Chinese government holds a positive attitude towards CCERs and intends to give full play to its role. In this sense, this article will also contribute both to the creation of laws on the CCER scheme and the full realization of its strength (From 2017 to date, all CCER registrations are in suspension, but they are expected to relaunch, as suggested by laws and policies recently enacted.).
The legislative framework underpinning the CCER scheme mainly consists of the legal instruments mentioned above, and the specific information is shown in Table 1.
The CCER scheme can be divided into three basic procedures according to the legal instruments mentioned, as demonstrated in Figure 1: the approval of CCER projects, the registration of CCERs, and the offsetting and trading of CCERs. (i) The approval of CCER projects: A project owner can prepare design documents and apply to the NDRC for approval of a CCER project after having it validated by a third-party institution. The NDRC will approve and register the projects that meet the conditions. (ii) The registration of CCERs: Once the approved CCER project is implemented, the owner is responsible for monitoring the actual emissions reductions generated. Then the owner can apply to the NDRC for registration of the emissions reductions after they are certified by a third-party institution. If essential requirements of the NDRC are satisfied, these emissions reductions will be registered as CCERs. (iii) The offsetting and trading of CCERs: CCERs can be used to offset CEA deficits or traded within the registered trading institutions under ETS (or other mechanisms). After that, the used and traded CCERs will be canceled, and changes in CCERs are tracked by the National Register, noting that the legal instruments also provide for the validation and certification institutions. Specifically, an institution that intends to undertake CCER validation and certification shall apply to the NDRC for approval. The NDRC will approve those eligible institutions. In the process, as mentioned above, some critical factors must be present.
Methodology: According to the Interim Measures, a CCER project must select an applicable methodology approved by the NDRC (article 9). A methodology refers to the methodological guidelines used to determine the project baseline, demonstrate additionality (a detailed explanation will follow later), calculate emissions reductions, develop monitoring plans, etc. (article 10). They may be transformed from the existing CDM methodologies or be newly created (articles 10 and 11). In addition, the Guidelines also specify that the determination of the methodology shall be justified in the project design documents, and the validation institution will examine the applicability of the methodology during the validation process.
Project Boundaries: The Guidelines require that the design documents correctly define and justify the boundaries of an offset project, as well as the involved physical facilities, emissions sources, and GHGs. Furthermore, the validation institutions must determine whether the project boundaries are reasonable based on site observations and document reviews.
Legal rights: Once the project boundaries have been defined, the rights to the blue carbon sinks within the project boundaries shall be established. In other words, the project owner must have a legal right to the blue carbon ecosystems within the project boundaries and to the sequestered carbon, as well as to the values of other generated ecological services.
Additionality: Additionality is one of the most fundamental issues in the carbon offset scheme and a central consideration in developing CCER projects. Additionality means that the emissions reductions achieved by a CCER project need to be additional to what would have happened without the project being carried out. In other words, the emissions reductions would not have occurred without a CCER project due to various barriers under existing conditions. To determine additionality, the Guidelines require that each project be evaluated on a case-by-case basis and offer several tests that could be used. These tests include an investment test, a barriers test, and a common practice test.
Project Period and Crediting Period: The project owner or other participant must determine a start date, a project period, and a crediting period. The start date is defined as the date when a project activity starts to be implemented. The project period refers to the period from the start date to the date on which the implementation of the project activities ends. The crediting period is when the CCER project can generate additional GHG emission reductions. The crediting period varies based on particular types of projects. In general, the Guidelines provide two kinds of crediting periods depending on whether they are renewable or not.
In this section, the legislative framework underpinning the CCER was discussed, as well as several critical factors, including methodology, project boundaries, legal rights, additionality, project period, and crediting period. These factors are, in fact, quite common in many globally existing carbon offset systems [44]. The following section will analyze these critical factors in depth to find the legal issues in applying them to blue carbon projects and consider how to address these legal issues.

3. Inclusion of Blue Carbon into the CCER Scheme

In the context of the critical factors mentioned above in Section 2, this section will discuss the legal issues that may emerge in incorporating blue carbon into the CCER scheme and propose feasible solutions. Specifically, the proposed solutions are mainly based on the successful applications of the CCER scheme to terrestrial biosequestration projects. The reasons are that several methodologies have been developed for terrestrial biosequestration projects [45,46,47,48], and some forestry projects have been registered as CCER projects [49]. However, it would be prudent to reconsider the above key factors when applying them to blue carbon projects because fundamental and significant differences exist between terrestrial and marine ecosystems.

3.1. An Applicable Methodology

Currently, four methodologies have been developed for terrestrial biosequestration projects. To be specific, one methodology is for afforestation projects [45], one is for forest management [47], one is for bamboo afforestation [46], and one is for bamboo management [48]. However, these methodologies cannot apply to blue carbon projects. This is because projects under them must include qualified lands, i.e., lands that do not fall into the wetlands category. Moreover, the fundamental biophysical distinctions between the terrestrial and marine ecosystems suggest that offsetting frameworks developed for the terrestrial realm could not be successfully applied to the marine context [50]. Therefore, it would be more appropriate to develop different methodologies for blue carbon projects.
According to the methodologies above for terrestrial biosequestration projects, the carbon reduction activities mainly include new plantings. However, the activities that benefit blue carbon ecosystems focus more on restoration or rehabilitation. Restoration refers to the process of assisting in the recovery of degraded, damaged, or destroyed ecosystems [51]. Rehabilitation is the act of partially or entirely replacing the structural or functional features of a diminished or lost ecosystem [52]. Restoration and rehabilitation activities can be both active and passive. Active activities include implementing management techniques such as planting, transplanting, or constructing artificial habitats. Passive activities focus on removing the effects of environmental stressors (e.g., pollution or poor water quality) that prevent the natural recovery of the ecosystems [53].
Furthermore, active activities such as new plantings are not often successful due to a failure to correct the stressors before replanting [53,54,55]. In contrast, they can be restored from degradation through natural regeneration processes once relevant stressors have been removed by passive activities. For example, a mangrove restoration project on the west coast of Peninsular Malaysia involved the construction of a breakwater at the shoreline. Without any active restoration activities such as planting, this approach successfully provided suitable environmental conditions for the re-establishment and natural recovery of mangrove ecosystems [54]. Moreover, in some cases, these passive activities may also cost less than active replanting [53,55]. Therefore, a blue carbon project may not necessarily involve new plantings.
In summary, consideration should be given to developing different methodologies for blue carbon projects before incorporating them into the CCER scheme. To this end, the existing methodologies for terrestrial biosequestration projects can provide a helpful frame of reference. However, the methodologies for blue carbon projects should adopt a broader definition for carbon abatement activities, because a narrow definition, such as active planting of new plants, is only one of many means of contribution to blue carbon ecosystems. These methodologies will allow project owners to develop projects that are most likely to succeed at a minimal cost. It is worth noting that the Ministry of Natural Resources of China has just released a methodology related to accounting for the economic values of ocean carbon sinks in 2022 [56]. This document will facilitate the development of methodologies for blue carbon projects and shall constitute a significant preliminary step for integrating blue carbon into the CCER scheme.

3.2. A Defined Project Boundary

Defining project boundaries in the marine environment is not a simple task. To address this issue, marine spatial planning can be used to facilitate the determination of blue carbon project boundaries. Marine spatial planning is a relatively new discipline compared to terrestrial spatial planning, which has been conducted globally for a long time [57,58]. Like terrestrial spatial planning, marine spatial planning has emerged from the growing concern that the externalities of unregulated development can adversely affect these areas and impede their sustainable prosperity [59]. Marine spatial planning refers to the public process of analyzing and assigning the spatial and temporal distribution of current and future human activities in marine areas to achieve ecological, economic, and social goals that usually have been established through political processes [60]. Marine spatial planning can add certainty for ocean developers and users of marine resources [57].
One of the earliest examples of marine spatial planning in the world, known as marine functional zoning, is in China [61]. The marine functional zoning system was established in 2002, according to the Law on the Administration of Sea Areas [62]. Furthermore, the State Council approved the National Marine Functional Zoning (2011–2020) in 2012 [63]. The National Marine Functional Zoning (2011–2020) comprises eight primary categories of zones for the following purposes: agriculture and fishery, port and navigation, industry and urban use, mineral and energy, tourism and recreation, marine protection, special uses, and reservation. These eight primary zones are divided into 22 subzones, as shown in Table 2. According to the Law on the Administration of Sea Areas, the use of sea areas must be consistent with the marine functional zoning (article 4). In other words, before developing a blue carbon project that intends to use the sea, the project owner must determine the site following the marine functional zoning.
However, the current marine functional zoning has not delineated zones for the purpose of developing blue carbon projects. Applying the marine functional zoning to blue carbon projects will provide a precise reference area for project owners when defining the project boundaries and facilitate the development of CCER projects. The current national marine functional zoning expired in 2020, and the preparation of a new one is underway. The new national marine functional zoning should include blue carbon projects. This solution is feasible given the emphasis the Chinese government has put on ocean carbon sinks. It can also integrate the protection of blue carbon sinks into the overall framework of marine development and conservation [64]. Until August 2022, China had around 48,126 km2 marine protected areas, comprising 5.48% of its total marine and coastal areas [65]. This percentage still falls short of the target (i.e., 10% of the world’s marine and coastal areas) established by the Convention on Biological Diversity [66], to which China is a party. Therefore, more areas should be included in the marine protection zone for blue carbon. At the same time, other categories need a reduction in area, such as agriculture and fishery zones, industry and urban use zones, and tourism and recreation zones.

3.3. A Clearly Defined Legal Right

Clearly defined legal rights are critical to implementing incentive programs, especially in the coastal marine environment. This is because the complexities concerning tenure, rights designations, and authority in the coastal and marine realm become a direct challenge to introducing and implementing offset programs [67].
In this regard, the Chinese legislation has established an integrated authorization system for the right to use sea areas. According to the Law on the Administration of Sea Areas, the sea areas belong to the State, and the State Council exercises ownership over the sea areas on behalf of the State. Any entity or individual that intends to use the sea must obtain the right to use sea areas (article 3). In other words, the right to use sea areas within the project boundary must be lawfully obtained if an entity or individual plans to develop a CCER project for blue carbon. The Law on the Administration of Sea Areas offers two ways to obtain such a right: through administrative approval or through bidding or auction.
Administrative approval: Any entity or individual can apply to the competent maritime administrative authority for the right to use sea areas (article 16). The competent authority shall, based on the marine functional zoning, examine the application and submit it to the competent people’s government for approval (article 17). For particular types of projects, the application must be approved by the State Council (article 18). After the application is approved and registered, the competent authority shall issue a certificate to the applicant. The applicant will get the right to use sea areas on the date of receipt of this certificate (article 19).
Bidding or auction: The right to use sea areas can also be obtained through bidding or auction. To this end, the maritime administrative authorities must develop a bidding or auction program. This program will be submitted to the competent people’s government for approval and implementation. Once the bidding or auction process is completed, the successful bidder or buyer will receive a certificate, thus obtaining the right to use sea areas (article 20).
In addition, there are potential risks to the carbon stored in coastal vegetated habitats because the public may have access to the marine areas where the blue carbon project is implemented. To address such risks, one possible solution would be granting the project owner an exclusive right to blue carbon resources within the project boundary. In this respect, the right to use sea areas shall have an exclusive effect [68]. The Law on the Administration of Sea Areas protects the right to use sea areas and the right to obtain revenue, so they must not be infringed by any entity or individual (article 23). If hampered or disturbed, the right holder can request the maritime administrative authority to remove the impediment or file a suit to the people’s court and claim damages (article 44).
To sum up, the Law on the Administration of Sea Areas has set up an effective authorization system for the right to use sea areas, thus securing a clearly defined legal right to develop blue carbon projects over a period of time. However, for obtaining the right to use sea areas, the maritime functional zoning is a significant basis for administrative approval. For those projects that are not in accordance with the maritime functional zoning, the competent marine authorities will turn down the application for the right to use sea areas. As mentioned above, the current maritime functional zoning does not include blue carbon projects. Accordingly, the project owner cannot obtain the right to use sea areas when developing a blue carbon project. This would lead to legal issues when establishing rights to the blue carbon sinks within the project boundary, thus hindering the implementation of blue carbon projects.

3.4. Additionality Requirements

It can be pretty complicated to determine additionality in biosequestration projects. Specifically, a restoration project may be additional, but a protection project will face challenges. In the protection case, additionality depends on assumptions about future socioeconomic incentives and environmental policies [69]. The Guidelines provide specific rules for the determination of additionality. In the case of afforestation and reforestation projects [45], for example, four major phases can be required to demonstrate their additionality, as shown in Figure 2.
Selection of baseline scenarios: The first step in this phase is to identify realistic and reliable scenarios that are likely to occur within the project boundary if the proposed CCER project has not been implemented. These scenarios are called baseline ones. From the baseline scenarios, those that do not violate existing laws, regulations, mandatory requirements, and national or local technical standards are selected. The proposed project is not additional if no or only one scenario is selected. In contrast, if more than one scenario is selected, the proposed project proceeds to the barrier test.
Barrier test: This test looks at potential barriers to implementing the selected baseline scenarios. In this context, barriers are defined as those that prevent at least one scenario from being implemented, including institutional barriers, technological barriers, ecological barriers, social barriers, etc. The baseline scenarios that are not affected by any of these barriers are retained. In contrast, those that cannot be implemented due to one barrier or more are eliminated.
If only one scenario is retained, two results may occur: If the scenario retained is the proposed project, there is no additionality, or if the scenario retained is not the proposed project, a common practice test will be performed.
If multiple scenarios are retained, it may produce two results: If the proposed project is included in these scenarios, an investment test is required, or if the proposed project is not included, the project directly proceeds to the common practice test.
Investment test: This test determines which of the selected scenarios is the most economically attractive, i.e., has the highest net revenue. Several methods can be used, such as cost analysis, comparative investment analysis, and baseline analysis. If the scenario with the highest net revenue is the proposed project, the project is not additional. In contrast, a common practice test will be performed.
Common practice test: Common practice refers to activities similar to the proposed project. These activities are commonly implemented in the region where the offset site is located or under similar socio-economic and ecological conditions. This test conducts a comparative analysis of the proposed project and the common practice, thus evaluating whether there is a fundamental difference between them. If the proposed activity is not fundamentally different from common practice, the project is not additional. In this contrast, the project is additional.
A blue carbon active restoration project, such as a mangrove afforestation and reforestation project, could pass all these tests just like a terrestrial afforestation and reforestation project. However, as mentioned in the above paragraphs concerning methodology, it is challenging to implement active activities in the marine environment. The more appropriate activities in the marine realm are passive, i.e., human activities that allow the natural regeneration of marine ecosystems. These passive activities, such as eliminating threats or stressors, can also achieve additionality. For example, it has been recommended that actions to reduce the risk of forest fires shall be included in the framework for Reducing Emissions from Deforestation and Degradation (REDD+) [70]. This recommendation is based on the fact that forest fires could undermine carbon permanence and destroy the potential for sustainable forest management and reforestation and regeneration activities, as well as threaten the additional benefits that REDD+ can bring. In this case, demonstrating additionality is not difficult because smoke can be easily observed when fires occur. Besides, post-fire regeneration and burn scars on trees make it possible to detect burned forests over many years [70]. However, it would be more difficult to justify that the regeneration of blue carbon ecosystems results from passive activities such as upstream conservation or improvements in downstream water quality. Therefore, the methodology for blue carbon projects should consider this challenge of proving causality and adjust the additionality requirement appropriately. A possible way is to allow the project to be considered additional if the project owner can demonstrate any regeneration of blue carbon ecosystems.

3.5. Alternative Project Period and Crediting Period

The emission reductions produced by CCER projects will vary depending on factors such as technological advances, industry structure, energy composition, policies, and laws. This could bring uncertainty and risk to CCER project investments and emissions reduction benefits. For this reason, the Guidelines offer two types of crediting periods: a fixed crediting period and a renewable crediting period.
Fixed crediting period: The start date and duration of the crediting period can only be determined once. It cannot be renewed or extended once the project registration has been completed. In this case, the crediting period for a proposed CCER project can be no longer than 10 years.
Renewable crediting period: The first crediting period may be no longer than seven years. However, it can be extended twice (i.e., for a maximum of 21 years). The start date and duration of the first crediting period shall be determined before the registration of the project.
In addition, alternative crediting periods can be specified according to project types. For example, different methodologies for forestry projects apply distinct crediting periods, with the shortest being 20 years [45,46,47,48]. The differences are mainly reflected in the most prolonged crediting period, which is 60 years for afforestation projects and forest management projects [45,47], 30 years for bamboo afforestation projects [46], and 40 years for bamboo forest management projects [48].
It has been recognized that terrestrial biosequestration projects may take longer to achieve carbon reductions compared to other types of projects. However, biosequestration projects in the marine sector could take even longer than terrestrial projects to fully realize their carbon sequestration potential. Complete recovery of marine and coastal ecosystems can take decades to centuries, contingent on the extent of disturbance and the nature of the ecosystem [53]. Soil carbon accumulation rates in created mangroves after 20 years are only close to the global average for natural mangrove wetlands [71]. Seagrass restoration projects have a very substantial carbon sequestration potential after 50 years of planting, but carbon sequestration rates over short time scales (less than 10 years) can be very disappointing [72]. For salt marsh restoration projects, the restored sites would take about 100 years to accumulate the amount of carbon stored in natural places [73].
In summary, while providing a general crediting period for CCER projects, alternative crediting periods can be specified based on project types, as in the case of forestry carbon projects. It would be helpful to consider alternative crediting periods in blue carbon projects because emissions reductions may not occur within the usual time scales. Therefore, more extended project periods and crediting periods are needed. Of course, this issue shall also be considered from the perspectives of project feasibility and investment. Project developers may prefer to invest in terrestrial carbon sequestration projects rather than blue carbon projects that would take longer to generate returns. The government should also offer ways to overcome this potential prejudice against blue carbon projects.

3.6. Summary of Considerations for Integrating Blue Carbon into the CCER Scheme

The analysis in Section 3 has shown that blue carbon projects can be integrated into the CCER scheme, but several critical issues must first be considered. In summary, these issues are:
(i)
Dedicated methodologies must be developed for blue carbon projects. The methodologies should adopt a broader definition for carbon abatement activities to include passive restoration and rehabilitation activities. This is because these passive activities will allow project owners to develop projects that are most likely to succeed at a minimal cost.
(ii)
The new national marine functional zoning should delineate zones for the purpose of developing blue carbon projects. By doing so, a helpful reference area will be provided for project owners in defining the project boundaries. The protection of blue carbon sinks should be integrated into the overall framework of marine development and conservation.
(iii)
The current authorization system for the right to use sea areas could be used to provide legal certainty and protection of the project owner’s legal rights to the blue carbon resources within the project boundaries. Exclusivity is also an important issue to consider.
(iv)
The additionality requirement should be given special consideration in blue carbon methodologies. It may be challenging to demonstrate that the regeneration of blue carbon ecosystems results from the project activities. In this case, the additionality requirements should be appropriately adjusted to allow the project to be considered additional if any regenerations occur after the implementation of the project.
(v)
Extended project periods and crediting periods would be needed for blue carbon projects, because emissions reductions may not occur within the usual time scales. The government should also use some incentive mechanisms to encourage investment in these projects, since they may take longer to generate returns.

4. Conclusions

Both the valuable role of blue carbon in sequestering carbon and the announcement of the 2060 carbon neutrality goal suggest that the time is ripe for integrating blue carbon into China’s climate change law and policy framework. Currently, the CCER scheme forms a significant supplementary part of the current climate change framework in China. However, blue carbon has not been included in it. To address this issue, this article first considers whether blue carbon could be incorporated into the CCER scheme. Based on the analysis of the legislative framework underpinning the CCER scheme, the integration of blue carbon into the CCER scheme will not require any substantial reconstruction of the existing legislative framework. Moreover, the successful application of the CCER scheme to terrestrial biosequestration projects suggests that it can also be applied to biosequestration projects in the marine context. However, some critical factors of the CCER scheme need to be reconsidered due to fundamental and significant differences between terrestrial and marine ecosystems. Subsequently, this article analyzes these critical factors in depth to find the legal issues in applying them to blue carbon projects. To address these legal issues, some feasible solutions have been proposed with reference to terrestrial biosequestration projects.
Specifically, the proposed solutions mainly involve five aspects, as shown below. (i) Dedicated methodologies need to be developed for blue carbon projects, which include a broader definition for carbon abatement activities. (ii) The new national marine functional zoning should delineate zones for the purpose of developing blue carbon projects. (iii) The current authorization system for the right to use sea areas could be used to secure a legal right to develop blue carbon projects. (iv) Additionality requirements should be appropriately adjusted. (v) Extended project periods and crediting periods would be needed. The above solutions will offer novel pathways for the inclusion of blue carbon into China’s climate change law and policy framework, thus contributing to achieving its 2060 carbon neutrality goal.

Author Contributions

X.-W.L.: writing—original draft preparation and revision; H.-Z.M.: writing—revising and editing. All authors have read and agreed to the published version of the manuscript.

Funding

Social Science Funding of Liaoning Province (L21CSH002); Funding of Liaoning Province for Young Talents in Philosophy and Social Sciences (20221s1qnrcwtkt-10).

Institutional Review Board Statement

Not applicable.

Informed Consent Statement

Not applicable.

Data Availability Statement

Not applicable.

Conflicts of Interest

The authors declare no conflict of interest.

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Sustainability 14 10567 g001 550
Figure 1. Basic procedures of the CCER scheme.
Figure 1. Basic procedures of the CCER scheme.
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Figure 2. The process of determining additionality in CCER forestry projects.
Figure 2. The process of determining additionality in CCER forestry projects.
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Table
Table 1. Summary of relevant legal instruments concerning the CCER scheme.
Table 1. Summary of relevant legal instruments concerning the CCER scheme.
Document TitleAbbreviationHierarchyIssuing Authority Effective DateStatus
Interim Regulations on the Management of Carbon Emissions Trading (Draft for Comment) Interim RegulationsAdministrative RegulationState Council-Not yet approved
Measures for the Administration of Carbon Emissions Trading (for Trial Implementation)Trial MeasuresDepartmental RulesMEE2021Effective
Interim Measures for the Administration of Voluntary Greenhouse Gas Emission Reduction TransactionsInterim MeasuresDepartmental RulesNDRC2012Effective
Guidelines on Validation and Verification of GHG Voluntary Emission Reduction ProjectsGuidelinesDepartmental RulesNDRC2012Effective
Table
Table 2. The classification system of the National Marine Functional Zoning (2011–2020).
Table 2. The classification system of the National Marine Functional Zoning (2011–2020).
ZonesSubzones
CodeNameCodeName
1Agriculture and Fishery1.1Land Reclamation for Agriculture
1.2Aquaculture
1.3Fish Enhancement
1.4Catch Fishery
1.5Conservation of Key Fishery Species
1.6Fishery Infrastructure
2Port and Navigation2.1Port
2.2Navigation Channel
2.3Anchorage
3Industry and Urban Use3.1Industry Use
3.2Urban Use
4Mineral and Energy4.1Oil and Gas
4.2Solid Mineral
4.3Salt Flat
4.4Renewable Energy
5Tourism and Recreation5.1Tourism
5.2Recreation
6Marine Protection6.1Marine Nature Reserve
6.2Marine Special Protection
7Special Uses7.1Military
7.2Other Special Uses
8Reservation8.1Reservation
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Li, X.-W.; Miao, H.-Z. How to Incorporate Blue Carbon into the China Certified Emission Reductions Scheme: Legal and Policy Perspectives. Sustainability 2022, 14, 10567. https://doi.org/10.3390/su141710567

AMA Style

Li X-W, Miao H-Z. How to Incorporate Blue Carbon into the China Certified Emission Reductions Scheme: Legal and Policy Perspectives. Sustainability. 2022; 14(17):10567. https://doi.org/10.3390/su141710567

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Li, Xin-Wei, and Hong-Zhi Miao. 2022. "How to Incorporate Blue Carbon into the China Certified Emission Reductions Scheme: Legal and Policy Perspectives" Sustainability 14, no. 17: 10567. https://doi.org/10.3390/su141710567

APA Style

Li, X. -W., & Miao, H. -Z. (2022). How to Incorporate Blue Carbon into the China Certified Emission Reductions Scheme: Legal and Policy Perspectives. Sustainability, 14(17), 10567. https://doi.org/10.3390/su141710567

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