The Institutional Challenges of Payment for Ecosystem Service Program in China: A Review of the Effectiveness and Implementation of Sloping Land Conversion Program

Payments for ecosystem services programs: A global review of contributions towards sustainability

Payments for ecosystem services programs (PESPs) are increasingly being adopted globally to enhance sustainability outcomes. There are also hundreds of studies yearly on various aspects of PESPs, but research on their contributions to sustainability of communities and the ecosystems they depend upon at the global scale are rare. Our global review explores twelve key characteristics of PESPs at three different phases (inputs - implementation - outputs and outcomes) and their relationship types of these characteristics to sustainability outcomes. To do so, we review 376 peer-review journal articles on PESPs, and test three hypotheses related to these relationships. Our findings confirm that the relationships between each of these characteristics and sustainability outcomes are bidirectional and/or multidirectional to some extent and can be positive, negative or both, depending on specific cases and research methods used to study these relationships. The findings also disclose that separating one characteristic as the primary causal factor in any relationship or outcome is not easy as relevant characteristics are linked in a complex network. Thereby, determining key characteristics of PESPs that drive relationships for the sake of sustainability is important. Through analyzing relationships between PESP characteristics, this study offers a series of suggestions to further aid the contributions of PESPs' contributions to sustainability in the future.

Payments for Watershed Ecosystem Services in the Eyes of the Public, China

Recent decades have witnessed an increased development of schemes for payment for watershed ecosystem services (PWES). However, the public is usually excluded from PWES systems. Reliable and empirical research on PWES from the public perspective is scarce. Aiming to understand public perceptions, attitudes, participation, and responses to PWES, this paper investigated local residents living in the Yongding River watershed area through a face-to-face questionnaire survey. The results showed that the public had limited knowledge of PWES. The public was keen to be involved in PWES decision-making, but the current level of public participation was very low. Regarding willingness to pay (WTP) and willingness to accept (WTA), nearly 55% of the respondents supported paying the upstream residents for protecting the environment if they were beneficiaries in the downstream areas, while 85% of the respondents agreed to accept compensation if they were contributors to environmental improvement in the upstream areas. Although some of the respondents’ daily lives were affected by the watershed environment, they were reluctant to pay, reflecting a sign of “free-riding”. The regression analysis showed that public concerns, values, knowledge of PWES and the watershed environment, and demographic factors determined the WTP and WTA. The results of the contingent valuation method and opportunity costs method showed that the annual payment for headwater conservation areas (Huailai and Yanqing) ranged from CNY 245 to 718 million (USD 36 to 106 million). This study contributes to our limited knowledge and understanding of public sentiment and makes recommendations for improving public receptivity to PWES.

Eco-compensation in China: achievement, experience, and improvement

Payments for ecosystem services (PES) provide innovative solutions for global environmental governance. China, the largest developing country, always faces severe ecological and environmental problems. China created an eco-compensation mechanism that combines the PES mechanism with the government's standardized management, which has achieved remarkable results. Government-led, social participation, and market-oriented operation are its main characteristics. More importantly, the mechanism helps China achieve its anti-poverty goals. Part of its experiences has been transformed into formal institutions, i.e., farmland fallow and rotation policies. However, some problems have also plagued further development, such as the lack of environmental property rights, the single source of funds, and the shortage of standardized ecological value assessment technology. We suggest that it is necessary to improve the stability of China's eco-compensation mechanism. The achievement of China's eco-compensation mechanism provides helpful guidance for other developing countries. For example, it is enhancing the role of government administrative power and the flexibility of the system through the policy "sandbox," i.e., the policy pilot, encouraging the participation of multi-stakeholder groups, and so on. Last but most important, the policy and institutions must be closely integrated with the nation's state for it to be sustainable.

Win-win-win pathway for ecological restoration by balancing hydrological, ecological, and agricultural dimensions: Contrasting lessons from highly eroded agroforestry

Ecological restoration projects (ERP) can effectively reverse ecosystem degradation. However, some ERPs have failed to restore ecosystems under environmental constraints, and they were unable to achieve the desired ecological and economic benefits. To achieve a win-win-win target that balances the hydrological, ecological, and agricultural dimensions, we introduced the contrasting lessons from hotspots of ecosystem restoration in the arid Loess Plateau (LP) and the humid Karst Plateau (KP) in China, and discussed a novel strategy for coordinating ecosystem restoration, water and food security, and residents' livelihoods. The biophysical models and related statistical records showed that aggressive ERPs and soil and water conservation projects (SWCPs) significantly promoted vegetation restoration and reduced soil erosion and sediment yield in both areas. However, excessive afforestation in the arid LP exhausted water resources and threatened ecosystem sustainability. The accelerated replacement of cropland since 1999 in the LP aggravated cropland shortage which led to carbon sequestration and grain productivity declines in the initial years. However, the construction of terrace and check-dam fields and improvements in the conditions of agricultural production reconciled the cropland shortage and stabilized food security. The positive involvement of stakeholders in ERPs effectively minimized land degradation through economic development and the improved livelihoods of local residents. Therefore, based on the evidence from the KP and LP, the proposed win-win-win strategy is potentially applicable in other global regions that suffer from land degradation. This strategy can achieve considerable success if the planners have a good understanding of local environmental conditions as well as the social and economic needs of residents affected by ERPs.

Life cycle thinking-based eco-compensation for gold ingot production: a case study in China

Unearthing mineral resources has brought about serious impacts on the natural ecosystem. Eco-compensation of mineral resources has been proposed; however, the lack of a systematic method for evaluating eco-compensation criteria has limited its implementation and progress. Life cycle thinking is proposed for evaluating eco-compensation criteria because it provides a holistic view for stakeholders through all the stages of production. In this study, the economic loss caused by resource exhaustion and environmental externalities is both studied to evaluate the eco-compensation criteria by integrating life cycle assessment, emergy accounting, and equivalent factor of ecosystem services. Gold production is used as an application for the explanation of this integrated framework. Results show that the life cycle eco-compensation of gold ingot per gram is 4.87 $, including both the economic loss of the gold itself (2.00 $) and the loss in terms of environmental externalities damage (2.87 $). Environmental costs include damage to ecosystem services because of land occupation (75.68%), damage to human health (12.28%), and the costs associated with climate change (12.04%). The results of this study can enrich the theory and future researches of eco-compensation criteria. Finally, suggestions and helpful insights are provided for policy-makers to enhance decision-making regarding eco-compensation criteria.

Institutional Design and Performance of Markets for Watershed Ecosystem Services: A Systematic Literature Review

Markets for watershed ecosystem services have been developed as a tool in integrated water resources management. The development of vast markets for watershed ecosystem services has raised attention for the performance of these markets, their institutional design, and how their institutional design influences market performance. The main research questions guiding this systematic literature review are: Which types of markets can be distinguished; how is market performance operationalized; which institutional design characteristics are distinguished in the literature; and which of these characteristics are crucial to understanding performance? A systematic review of 224 journal articles from Web of Science leads to several main findings regarding these questions. Market performance is usually equated with effectiveness in the reviewed articles. Discussions in these articles include whether the market contributes to the preservation of ecosystem services, what the distributional impacts are, and what the participation rate is. The reviewed articles have illustrated specific institutional design features as well. The key features include the security of property rights, role of governments, bundling of ecosystem services (ES), and role of trust. In those articles addressing the relationship between institutional design and performance, the relevance of monitoring and enforcement, clearly defined property rights, and geographical market scope have been pointed out.

Long-Term Impact of China’s Returning Farmland to Forest Program on Rural Economic Development

The Returning Farmland to Forest Program (RFFP) is widely known as one of China’s largest and most successful payment schemes for ecosystem service projects for the achievement of both environmental and economic sustainability. By sponsoring afforestation activities and compensating farmers for converting cropland to forest, the project was designed to achieve multiple goals. Ecologically, the program aims to expand forest cover and to reduce flood and soil erosion. Economically, it aims to alleviate poverty and improve rural livelihoods. Although the official metrics indicate successful program outcomes in the short term, researchers have reported mixed and controversial results for long-term outcomes. We combined the difference-in-difference (DID) with instrumental variables (IVs) regression to examine the long-term effects of China’s RFFP on local economic development. We found that (1) the RFFP has had a remarkably positive impact on local economic growth in the primary sector, but considerably limits the growth of enterprises above a designated size by 16.8%; (2) the RFFP is unable to promote the development of the secondary industry because it cannot effectively promote the transfer of rural laborers to the secondary industry sector; and (3) in addition to increasing the general budgetary expenditure of local finance by 7.50%, this program has significantly reduced local fiscal revenue by 35.50%. We suggest that eco-compensation should consider the performance of the RFFP in its evaluation criteria.

Socio-ecological changes on the Loess Plateau of China after Grain to Green Program

Payment for Ecosystem Services (PES) is now widely accepted as a policy tool for advancing both ecological and social progress. The Chinese government's Grain to Green Program (GTGP) is the world's largest PES program. It was initiated nearly 20 years ago to reverse previous environmental degradation. However, it is difficult to achieve both conservation and economic "win-win" gains, and care is needed in monitoring environmental and socioeconomic outcomes. Here we choose the Loess Plateau (LP), the area where GTGP was implemented most intensively, to study the social-ecological changes after GTGP and determine whether these changes are related to GTGP. The results show that LP has achieved "win-win" gains of restoring environment and promoting socioeconomic development: normalized difference vegetation index (NDVI) time series show a significant greening trend, and soil retention and carbon sequestration services have improved from 2000 to 2015. Simultaneously, grain output from the LP has increased by 56.7%. We also analyzed the effects of afforestation on changes of socio-ecological factors, and find that the changes of NDVI, soil erosion, and carbon sequestration mainly reflect the degree of afforestation rather than climate change, while the correlations between changes of socioeconomic factors and degree of afforestation are insignificant. We conclude that, despite some adverse outcomes such as water yield reduction, GTGP in LP has achieved considerable overall success in environmental factors. However, comprehensive and quantitative evaluation of the social impacts of GTGP is needed, as the impacts are clouded by multiple socioeconomic factors.