[Editor's Note]

Money is turning green. This is not a metaphor. When a Chinese private enterprise erects wind turbines on the Gobi Desert in Kazakhstan, when a bond connects the capital of three continents at the same time, when an accident car unexpectedly triggers a butterfly effect in the financial ecosystem—green finance has long quietly reshaped our daily world.

But most people don't know it yet.

This series delves into five cutting-edge areas: green credit, green bonds, green funds, green insurance, and green leasing. It uses real cases to dissect the underlying logic of China's green finance—what kind of exploration and breakthroughs lie behind those "first orders", "first transactions" and "first batches"? How do those seemingly tedious financial structures truly transform a river basin, an industry, and an enterprise on the verge of collapse?

Seen individually, these stories are individual cases of financial innovation; taken together, they signal that a new capital logic is taking shape.

Pricing the Earth's "breath" is the ambition of Pingtan General Insurance. Their approach is to provide a new solution for converting lucid waters and lush mountains into invaluable assets through an innovative path of "insurance + technology + finance". Thus, new answer sheets are being written one by one:

In Diaoluo Mountain, Hainan, a tropical rainforest once swallowed by alien plants has been reborn, and the resulting carbon sink benefits have been injected into the ecological restoration fund pool; in Changhai County, Dalian, the shellfish farming industry has become a key pillar of "blue carbon sinks"; in Gaoyou City, Jiangsu, wetland parks have also become an innovative place for the insurance model of "carbon sequestration value loss + restoration cost compensation".

From a single forest to the vast ocean and then to the tranquil wetland, Pingtan An Insurance is constantly innovating financial tools to value China's vast ecosystem and provide solid risk protection for its sustainable development.

What is "Carbon Sink

In the Diaoluo Mountain area of Hainan Tropical Rainforest National Park, an alien plant called Merremia gemella once wrapped around this precious rainforest like a huge "green noose". Wherever it went, trees withered and vitality declined sharply. It not only damaged biodiversity, but also seriously weakened the carbon sequestration capacity of forests, a huge "carbon pool".

However, an ecological restoration initiative not only cut through the vines but also activated a brand-new model of value conversion. As this revitalized rainforest began to absorb carbon dioxide more efficiently through ecological restoration, an ecological function that was once invisible and intangible—"carbon sink"—started to be accurately quantified and labeled with a price tag. Behind this is the innovative approach of "insurance + technology + finance" adopted by Ping An Property & Casualty Insurance Company of China, Ltd. (hereinafter referred to as "Ping An Property & Casualty"), which provides a new solution for converting lucid waters and lush mountains into "invaluable assets.

Since the proposal of the "dual carbon" goals, Pingtan Property & Casualty Insurance has built a three-dimensional ecological protection network covering forests, grasslands, oceans and wetlands. At present, Pingtan Property & Casualty Insurance has launched a number of pioneering ecological carbon sink insurance projects in 18 provinces across the country, providing risk protection of over 80 million RMB for 4.465 million mu of forest land in total.

The concept of "carbon sink" is unfamiliar to many people. What exactly is a "carbon sink"? To understand this concept, it might be helpful to start with "carbon pool".

The so-called "carbon pool" refers to the storage reservoir of carbon, which means the various parts of the Earth's system that store carbon during the carbon cycle. A large amount of carbon is stored in carbon pools such as the atmosphere, land, and oceans, and carbon continuously circulates and transforms among these carbon pools through various forms such as solids, liquids, and gases.

Carbon sink" is defined relative to the atmosphere. Mountains, rivers, forests, farmlands, lakes, grasslands and deserts form an interconnected and mutually influential ecosystem, a community of life, all of which have the function of carbon sequestration. Simply put, a "carbon sink" refers to the processes, activities and mechanisms that absorb, store or remove carbon dioxide from the atmosphere.

What exactly is the significance of "carbon sinks"?

Since the mid-18th century, marked by the First Industrial Revolution, human society has gradually transitioned from an agrarian era to an industrial one. This was not only a turning point in human history but also a turning point in the history of Earth's environment. The large-scale combustion of fossil fuels led to massive emissions of greenhouse gases and began to alter Earth's climate system in ways that were not understood at that time.

Rising sea levels, frequent extreme weather events, loss of biodiversity... Over the past 200 years, the threats and challenges facing the Earth's environment have become increasingly severe, and when tracing the root cause, none can escape the small "carbon" element.

We will strive to peak carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060" is a solemn commitment made by China to the international community. In this extensive and profound economic and social transformation, the two paths of "low carbon" and "carbon sequestration" have been highly expected.

Among them, "low carbon" is more about addressing the "carbon" in the future, that is, by reducing or controlling carbon emissions to avoid releasing carbon into the atmospheric carbon pool. But to deal with the carbon that has already been emitted, it is necessary to store and fix it through various "containers", and this process, activity or mechanism of "carbon sequestration" is "carbon sink".

Cut Vines for Carbon

When it comes to "carbon sink", forests are undoubtedly the key word.

As trees begin to grow, carbon dioxide in the atmosphere is absorbed by them through photosynthesis, and after being converted into solid carbohydrates, it is stored in various places such as trunks, branches, leaves and roots.

As the main body of terrestrial ecosystems, forests possess a powerful carbon sink function and role. According to the report The State of the World's Forests 2018 released by the Food and Agriculture Organization of the United Nations, global forests absorb approximately 8.8 billion tons of carbon dioxide every year. By 2021, the total carbon storage of forest vegetation in China had reached 9.2 billion tons. Forest carbon sink has become an important path to achieve the "dual carbon" goals, and it is also one of the most economical, safe and effective means for carbon sequestration and sink enhancement at present.

Every forest is a carbon pool, but not all carbon pools are the same in size.

Hainan's tropical rainforests are the most concentrated, most diverse in type, best preserved and largest in contiguous area "continental island-type" tropical rainforests in China, and an important part of the world's tropical rainforests.

Hainan Tropical Rainforest National Park is one of the first 5 national parks established in China, with a total area of 4,269 square kilometers. The Diaoluo Mountain area, located in the southeastern part of Hainan Island, is one of the 7 areas of Hainan Tropical Rainforest National Park. It spans 4 counties and cities, namely Lingshui, Qionzhong, Baoting and Wanning, covering a total area of 447 square kilometers, with a forest coverage rate of 96.26%, and boasts a stable tropical rainforest ecosystem.

However, within the Diaoluo Mountain area, the tropical rainforests once suffered severely from the rampant infestation of Merremia boisiana. This invasive alien plant has an extremely strong reproductive capacity; where it spreads, trees wither and die, biodiversity declines sharply, and it resembles a "green desert", seriously weakening the carbon sequestration capacity of the forests.

Faced with this situation, the Diaoloushan Branch of the Hainan Tropical Rainforest National Park Administration has carried out operations and management work such as the removal and control of Mikania micrantha, covering a total area of 10,000 mu for the project.

With ecological restoration, the carbon sequestration function of forests is activated. How to turn the invisible and intangible carbon sinks into tangible and valuable assets, and more effectively transform lucid waters and lush mountains into "invaluable wealth" has become the next issue to be explored.

In July 2024, the WeChat mini-program "Hainan Forestry Carbon Supermarket" was officially launched. The "Diaolosan Mountain Mikania micrantha Restoration Project" and the "Lingaol Mangrove Carbon Sink Benefit-for-Farmers Project" were launched as the first batch of products, priced at 100 RMB per ton of carbon sequestration capacity.

According to the carbon sequestration methodology for the tropical rainforest Mikania micrantha eradication project compiled by the Hainan Academy of Forestry Sciences, during the initial monitoring period (December 2020 to December 2023), the "Diaoloshan Mikania micrantha Restoration Project" generated approximately 14,700 tons of tradable carbon sequestration, with over 3,500 tons of carbon sequestration sold on the first day of the mini-program's launch; the entire crediting period is set at 20 years, and it is expected to achieve a total carbon dioxide emission reduction of 109,000 tons, with a potential carbon sequestration value exceeding 10 million RMB.

Innovative Safeguards

A tropical rainforest once engulfed by invasive plants regains new life through ecological restoration, and the carbon sequestration benefits generated are injected into the ecological restoration fund pool, further helping more trees escape the suffocating threat of the "green noose".

As a commodity characterized by "quantifiability, tradability, value additivity and sustainability", when forestry carbon sinks enter the trading market, they not only open up the channel for transforming the ecological value of forest resources into economic benefits, but also promote the gradual formation of an interest-oriented mechanism where protectors benefit, users pay and destroyers compensate, thus exploring a sustainable protection model of "restoration-monitoring-trading-reinvestment" for ecologically fragile areas.

However, forests can serve as both carbon sinks and carbon sources. As a living system, forest carbon sinks carry the risk of carbon reversal. The death and decomposition of forests, forest fires, man-made deforestation and irrational logging, as well as the utilization and consumption processes of forest biomass products, may all release the carbon stored in forests back into the atmosphere, resulting in carbon sink losses and direct economic losses for carbon sink owners.

From an insurance perspective, traditional forest insurance only covers property losses of the insured forest trees and cannot cover the intangible economic value of carbon sinks. Therefore, establishing a sound forest carbon sink insurance mechanism is of great practical significance.

2023, under the guidance of the Hainan Provincial Forestry Bureau, we conducted communications and discussions with the Hainan Academy of Forestry Sciences and the Diaoluoshan Branch of the Hainan Tropical Rainforest National Park Administration, and tentarly developed insurance clauses specifically tailored for tropical rainforest carbon sink projects," said Yang Geng, Sales Director of the Rural Insurance Business Department of Pingtan Property & Casualty Insurance Haikou Central Branch.

On July 10, 2024, the first national tropical forest carbon sink index insurance designed by Pingtan An Property & Casualty Insurance Company Limited, namely the "Forest Carbon Sink Index Insurance", was officially launched in Hainan.

This insurance takes the variation of carbon sinks as the basis for compensation and indemnification. On the basis of traditional forestry insurance, it uses carbon sink index insurance to provide more comprehensive protection for the forest economy, assists in the rescue of forestry carbon sink resources, the removal of carbon sources and the cultivation of forest resources after disasters, and strengthens ecological protection and restoration.

The innovation of carbon sink insurance lies in setting up two-way protection in line with customer needs. It not only provides forest property insurance but also focuses on forest carbon sink capacity, offering double protection of "accident insurance + health insurance" for forests.

On the one hand, the scope of insurance coverage has been upgraded from a single "coverage of disaster losses" to "coverage of the economic value of carbon sinks".

When the carbon sink capacity of tropical rainforests declines due to natural disasters or human factors, the difference between the carbon sink target value agreed in the insurance contract and the actual value will trigger compensation," Yang Geng said. It is clearly stipulated in the insurance clauses that the compensation funds must be used for the ecological restoration of tropical rainforests, such as reforestation and vegetation restoration, forming a closed loop of "loss - restoration - recovery".

On the other hand, when the actual carbon sink value is higher than the agreed target value, corresponding cost compensation will be given for the excess part to encourage more enterprises to participate in the forest protection cause with willingness and guarantee.

Precise Carbon Measurement

Then how to determine the carbon sequestration quantity of the insured subject?

We have adopted the Carbon Sink Methodology for the Tropical Rainforest Mikania micrantha Removal Project from the Hainan Academy of Forestry Sciences, and verified it with the carbon sink data of recent years, which is more accurate than traditional carbon sink measurement methods," Yang Geng said.

Based on the methodology, a scientific carbon sink metrology system clarifies core elements such as project boundaries, baseline scenarios, and additionality demonstration, ensuring the monitorability, reportability, and verifiability of carbon sink volume. According to calculations, the agreed carbon sink target for the 10,000 mu of tropical rainforest underwritten by Pingtan Insurance Hainan Branch is 1,800 tons, with the agreed growth rate of carbon sink target at 3.15%.

We have clarified the overall account, and we still need to work out the detailed figures.

As a living system, the forest carbon pool is affected by multiple factors. To scientifically increase the forest carbon pool and enhance the forest carbon sink capacity, in addition to expanding the forest area as much as possible, it is also necessary to consider the impacts of natural environments such as climate change, improve the management level of human activities, and accurately improve the forest quality.

In this regard, Pingtan Insurance relies on satellite remote sensing + AI (Artificial Intelligence) algorithms to achieve accurate measurement of carbon sink volume and full-process dynamic monitoring. It regularly feeds back forest growth to customers, puts forward scientific management suggestions, and issues early warnings in case of disasters, helping customers increase the growth level of carbon sink values.

The carbon sink measurement method we adopt uses satellite remote sensing technology for monitoring, inversion and calculation. It calculates the annual forest carbon sink absorption in accordance with the calculation methods and factors defined as 'change in forest biomass carbon stock' in the Methodology for Carbon Sink Afforestation Projects and Methodology for Forest Management Carbon Sink Projects issued by the National Development and Reform Commission," Yang Geng introduced.

To conduct the design of carbon sink insurance products in a fair manner, Ping An Property & Casualty Insurance Company of China, Ltd. Hainan Branch commissioned Aerosun Xinzhi Detu (Beijing) Technology Co., Ltd. (hereinafter referred to as "Aerosun Xinzhi Detu") to conduct carbon sink calculations on the Diaoluo Mountain forest in Lingshui Li Autonomous County by combining historical satellite remote sensing data, which served as the raw data support for the design of forest carbon sink insurance.

Yang Geng presented a remote sensing report from Aerospace Xinhua Zhitu — during the monitoring period from December 2023 to December 2024, the total carbon sequestration of 568,500 mu of forest land in Diaoluo Mountain reached 182,352 tons, and the total carbon sequestration capacity increased from 4,651.07 (gC/m²) at the beginning to 5,132.21 (gC/m²) at the end.

Among them, the carbon sink peaks occurred from July to September 2024, with the total carbon sinks for the three months being 27,325.91 tons, 29,524.11 tons and 26,804.03 tons respectively, corresponding to the annual average carbon sinks of 72.10 (gC/m²), 77.90 (gC/m²) and 70.72 (gC/m²) respectively.

Satellite remote sensing combined with AI algorithms not only plays an important role in promoting the development of carbon sequestration in tropical rainforests, but also provides strong support for the exploration of "ecological asset monetization" in the Greater Khingan Mountains.

On July 3, 2025, the country's first cold-temperate carbon sink index insurance was successfully launched at Tuqiang Forestry Bureau in Daxing'anling, Heilongjiang Province.

Aiming at the characteristics of complex ecosystems and high risk control difficulty in cold temperate forest areas, this project deeply integrates satellite remote sensing and meteorological big data technologies to build an intelligent loss assessment model, building a full-cycle risk guarantee network for China's important ecological barrier in the north. The success of this model provides a valuable "cold temperate sample" for the financialization and transformation of ecological assets.

From Green to Blue

Forests are carbon sinks, and so are oceans, wetlands and other ecosystems. Through continuous exploration, Ping An Property & Casualty has extended carbon sink insurance from protecting a single forest to safeguarding the entire ecological circle.

Changhai County, Dalian City, Liaoning Province, is located in the Bohai Bay and boasts unique marine resources. Since the establishment of the first shellfish farming demonstration base in 1993, the shellfish farming industry in Changhai County has gradually grown and expanded, becoming an important economic pillar of the local area. According to statistics, the county's shellfish farming area reaches 25,000 mu, with an annual output of about 50,000 tons of shellfish and an output value of over 1 billion RMB.

In December 2022, Pingtan Insurance launched the country's first marine carbon sink index insurance in Changhai County, insuring 13.3 mu of kelp and shellfish algae locally with a total insured amount of 400,000 RMB.

After raising seaweed and shellfish for so many years, we never knew these things could produce carbon sinks," local aquaculture companies and individual farmers sighed when they first encountered the concept of marine carbon sinks.

Data shows that the ocean is the largest active carbon pool on Earth, 20 times that of the terrestrial carbon pool and 50 times that of the atmospheric carbon pool, with a marine carbon sequestration cycle that can last for thousands of years. At the same time, the mariculture ecosystem of filter-feeding shellfish has a strong carbon sink function. As the world's largest producer of marine shellfish and algae mariculture, China's output accounts for about 84% of the world's marine shellfish mariculture production.

However, due to the volatile marine climate, there has always been a lack of scientifically effective risk management and mitigation measures. Once marine disasters such as typhoons, abnormal sea surface temperatures, and red tides occur, they often cause large-scale damage to seagrass beds, and there is no effective guarantee for carbon sequestration effects.

After the marine carbon sink insurance is implemented, the carbon sequestration produced by algae, shellfish and other organisms can all be regarded as carbon sinks. When specific changes occur in the marine environment, causing damage to local kelp, shellfish and algae organisms and weakening the carbon sinks, the marine carbon sink insurance will provide corresponding compensation. This is not only an innovative measure for insurance to promote green development, but also a new breakthrough by Ping An Property & Casualty in the boundary of green protection, expanding insurance protection from "green carbon" to "blue carbon".

Wetlands are hailed as the "Kidneys of the Earth". Together with oceans and forests, they are known as the three major ecosystems on Earth. Their total carbon storage accounts for 35% of the terrestrial ecosystem, making them an important part of the carbon sink system.

Gaoyou City is located in the central part of Jiangsu Province, on the western edge of the Lixia River, covering an area of 1,963 square kilometers, including 1,175 square kilometers of land and 788 square kilometers of water area. It is rich in wetland resources. Here, too, lie the footprints of Ping An Property & Casualty's green exploration.

Step into the East Lake Provincial Wetland Park in the Economic Development Zone of Gaoyou City, Jiangsu Province, where you can enjoy the wetland scenery, experience the wild ecological charm, watch wild ducks being released, and feel the intimate harmony between humans and nature at close range.

Under the guidance of Yangzhou Regulatory Branch of the National Administration of Financial Regulation, Gaoyou Forestry Bureau and Ping An Property & Casualty Insurance Gaoyou Branch jointly promoted the launch of the country's first wetland carbon sink remote sensing index comprehensive insurance covering "carbon sequestration value loss + restoration cost compensation" in Gaoyou, providing risk protection of over 13.7 million RMB for 7,215 mu of wetland in East Lake Provincial Wetland Park of Gaoyou Economic and Technopark.

We mainly conduct remote sensing estimation of wetland vegetation carbon reserves. By adopting multiple advanced technologies such as satellite remote sensing, LiDAR mapping, and biophysical and chemical modeling, we analyze data such as vegetation coverage and vegetation indices to conduct high-precision measurement and comprehensive assessment of wetland vegetation carbon sinks," said Zhou Jing, person in charge of Ping An Property & Casual Insurance Gaoyou Branch.

It is reported that this insurance takes the economic value of carbon sequestration and the costs of restoration and maintenance of wetlands as the basis for compensation. If the carbon sink capacity of the insured wetland is reduced due to damage caused by natural disasters, accidents or other factors, compensation will be provided to the insured according to the degree of carbon sink loss and the investment in wetland restoration and maintenance costs.

The target growth rate of carbon sink values is mainly based on the regional carbon sink growth trend data of the past 10 years, and a dynamic adjustment mechanism is agreed upon after multi-dimensional evaluation. The measurement of the economic value of wetland carbon sinks will refer to the carbon trading market price to form a floating benchmark. The insurance amount is set with ecological restoration costs as the core consideration, and it is incorporated into the carbon sink value evaluation system to form a composite security model." Zhou Jing said.

For compensation, the specific compensation amount is calculated by multiplying the decline range of carbon sink by the insurance amount," Zhou Jing said. The greater the decline range of carbon sink, the more serious the damage to wetlands caused by natural disasters, accidents and other factors, and the higher the corresponding compensation amount. This will help rescue wetland carbon sink resources, clean up carbon sources, cultivate forest resources, and strengthen ecological protection and restoration after disasters.

From a forest to a vast ocean, and then to a tranquil wetland, Ping An Property & Casualty is constantly innovating financial instruments to assign value to China's vast ecosystem and provide solid risk protection for its sustainable development.

 

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