Abstract: Carbon insurance, as an important component of the green finance system, plays a core role in risk diversification, financial integration, and technological empowerment in achieving China's "dual carbon" goals. This article starts from the basic concept and core functions of carbon insurance, sorts out and analyzes its operation process and mechanism, draws on advanced development experience at home and abroad, and combines with the current development status of carbon insurance. It is found that the current development of carbon insurance faces multiple problems such as insufficient market momentum, technological bottlenecks, and low enterprise participation. Based on this, in order to further optimize the carbon insurance market, it is necessary to build a differentiated and integrated product system, create a data-driven intelligent risk control system, and improve a policy driven diversified collaborative mechanism, in order to provide theoretical support and practical reference for the healthy development of the carbon insurance market.