China has been implementing one of the world's largest ecological rehabilitation projects, the Natural Forest Protection Program (NFPP), to improve its fragile and precarious environmental conditions. This paper measures the socioeconomic impacts of the NFPP using input–output (I–O) models. We find that the NFPP will expand the annual output of the forest sectors by 5.8 billion Yuan and the whole economy by 8.9 billion Yuan by 2010. Employment will increase by 0.84 million in the forest sectors and by 0.93 million in the whole economy. Associated with the enormous expansion of forest protection and management are huge contributions to mitigating water runoff, soil erosion, flooding, and biodiversity loss. The investments and adjustments are thus worthwhile, if the program is properly implemented. The challenges are to transform loggers into tree planters and forest managers and to ensure that the financial and institutional commitments by the local and national governments will be materialized.

The question of funding necessary climate actions, including those in the forest sector, to drastically reduce greenhouse gas (GHG) emissions and global warming, is important to both national governments and international agencies. The objective of this paper is to address this question by reviewing and synthesizing the economic principles associated with reducing GHG emissions, the pricing mechanisms used to achieve that goal, and the diverse practices of climate finance. Included in the carbon pricing mechanisms and practices are carbon tax, compliance and voluntary emission trading, internal pricing, and funding via issuing bonds or mobilizing public budgetary resources. Then, it proceeds to describe the roles that public and private organizations can play and have played in supporting emission reduction and removal, which serves as a vital backdrop for examining current states and relative costs of forest sector initiatives. Overall, as reported by the World Bank, only about 23% of global GHG emissions are subject to any explicit price, and 75% of the emissions that are subject to a price are charged less than $10 per tCO₂e. Market-based forest finance and international support for reducing emissions from deforestation and forest degradation have accounted for a small fraction of the total spent on climate mitigation and adaptation. Further, the more recent developments in carbon pricing and funding remain slow and disappointing. Without the right scale of green finance at the right time, however, it will be difficult to achieve the needed energy and economic transformation.