Carbon finance refers to various financial institutional arrangements and financial transactions aimed at reducing greenhouse gas emissions, mainly including trading and investment of carbon emission rights and their derivatives, investment and financing of low-carbon project development and other related financial intermediary activities. In fact, carbon emissions are regarded as a valuable commodity, and both spot and futures can be bought and sold.

The rise of "carbon finance" stems from the change of international climate policy and involves two important international conventions-the United Nations Framework Convention on Climate Change and the Kyoto Protocol.