China Economic Review, Volume 65, February 2021,
Mitigating global warming is the responsibility of all countries. Moreso, the role of forests in sequestrating carbon is very crucial. Most environmental organizations are active in protecting the environment according to their objectives. This paper investigates the relationship between institutional freedom and forest carbon sinks by using a panel threshold model with 139 countries to verify the U-shaped relationship between forest carbon sinks and economic development. The U-shaped curve between forest carbon sinks and economic development is the same as the environmental Kuznets curve. The impact of institutional freedom on forest carbon sinks under different economic development thresholds is analyzed. Institutional freedom harms forest carbon sinks when the country experiences lower economic growth. Further analysis shows that when economic development is high, there are positive effects, and the beneficial effects of institutional freedom on the forest carbon sink gradually enhance as the threshold value increases. The article clarifies the relationship between institutional freedom and forest carbon sinks and also provides implications for making forest management strategies and climate mitigation policies.