How Can China Maximize Carbon Storage in Its Forests Without Massively Expanding Forested Areas?

China is seeking to enhance the role of its forests in combating climate change by increasing their capacity to absorb carbon dioxide. A recent study reveals that subsidies for carbon storage in forests exist as the most effective and realistic tool to achieve this. Contrary to popular belief, it is not necessary to significantly expand forested areas to achieve meaningful results. Most of the gains would instead come from better management of existing forests, by extending harvesting cycles and increasing tree density.

Researchers compared three approaches: a standalone tax on carbon emissions related to forestry, a standalone subsidy for stored carbon, and a mixed system combining both. The results show that the mixed system yields the best results in terms of additional carbon storage, but its advantage over a subsidy-only policy remains modest, between 1 and 9%. Considering administrative costs and the challenges of implementing a tax, the subsidy-only approach appears to be the most pragmatic and cost-effective solution.

Another key finding is that the effectiveness of these policies heavily depends on the price of carbon. A price that is too high, between 200 and 300 yuan per ton of CO₂, proves less effective than a lower price set at 100 yuan per ton. At this level, costs are controlled, and carbon storage gains are nearly as high as with higher prices. This is because incentives to change forest management practices are stronger at certain thresholds than at others.

The study also highlights an unexpected risk: a standalone carbon tax could reduce forest area. By taxing emissions related to tree harvesting, this measure decreases the profitability of forests and encourages the conversion of wooded land to other uses, thereby canceling out the expected climate benefits. In contrast, a subsidy encourages landowners to preserve and better manage their forests without requiring heavy administrative investments.

Finally, improving carbon storage in China will primarily involve intensifying the management of existing forests rather than expanding forested areas. Land constraints and policies protecting agricultural land limit the possibilities for large-scale afforestation. By extending rotation periods and increasing stand density, Chinese forests could store much more carbon, even without expanding. These findings provide concrete avenues for guiding public policies toward solutions that are both effective and feasible.

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DOI: https://doi.org/10.1007/s10342-026-01891-9

Title: Carbon tax/subsidy and the potential for forest carbon sinks in China

Journal: European Journal of Forest Research

Publisher: Springer Science and Business Media LLC

Authors: Han Zhang; G. Cornelis van Kooten; Chao Yue; Hongqiang Yang; Peter Smith