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Forest conservation is a key dimension for protecting biodiversity and mitigating climate change. However, for indigenous communities whose livelihoods and knowledge systems are deeply intertwined with forest landscapes, conservation initiatives can also generate new forms of environmental injustice. This paper examines the interaction between forest conservation and indigenous environmental justice in Taiwan. Under a settler-colonial land regime, indigenous peoples in Taiwan have historically been confined to mountainous forest regions, while their traditional territories have been reclassified through state-defined indigenous reserve lands and forest governance frameworks. Recently, forest carbon sink initiatives have emerged as an alternative governance approach. These programs are framed as being “co-developed and co-managed with indigenous communities,” seeking to integrate indigenous livelihoods into climate governance through carbon sequestration and ecosystem services. While such initiatives open new possibilities for coexistence, they also generated unintended consequences. The indigenous traditional ecological knowledge was replaced by scientific carbon methodologies, their land use was financialized as a carbon-generating asset without cultural meanings, and the indigenous temporalities was transformed toward audit cycles of measurable performance. Drawing on environmental justice perspectives, this paper argues that indigenous carbon sink initiatives in Taiwan hold significant potential for climate mitigation and biodiversity conservation only if they are grounded in substantive indigenous participation and indigenous ecological knowledge. Rather than imposing universalized carbon accounting frameworks onto forest landscapes, climate governance must be connected to just transition and transitional justice, addressing the legacies of settler colonialism and strengthening indigenous sovereignty in climate action.