Research on Option Pricing Strategies for Forestry Carbon Sinks Based on Black-Scholes Modeling-Take Sanming City as an Example

School of Economics and Management, Beijing Forestry University, Beijing, 10000, China

^* Corresponding author: ym2121@bjfu.edu.cn

Abstract

Sanming City, Fujian Province, is known as the green capital of China. This paper focuses on the local forestry carbon sink projects in Sanming City and analyzes their carbon trading prices based on the real option pricing theory and the Black-Scholes model and concludes that the value of the forestry carbon sink projects in Sanming City has been underestimated. This paper seizes the undervalued situation and puts forward certain suggestions for working on projects to develop forestry carbon sink in Sanming, such as increasing the well-being of residents by utilizing forestry carbon sink projects, increasing the number of trading entities in the carbon market, and perfecting the carbon trading market, etc. It also points out that the rationalization of forestry carbon sink products should be carried out reasonably. At the same time, it also points out the significance of reasonable pricing of forestry carbon sink products for the local carbon trading market, which leads to the significance of the rational development of forestry carbon sinks for China’s green development.