MICHAEL BENNETT FOREST TRENDS Research Fellow, Peking University Visiting Scholar, EfD Research Fellow. Markets for Ecosystem Services in China: Inventory of PES/MES Activities, Initiatives and Programs in China, Interim Report
Presentation <ul><li>BACKGROUND </li></ul><ul><li>PES/MES INVENTORY RESEARH FRAMEWORK </li></ul><ul><li>SELECTED FINDINGS </li></ul><ul><li>PRELIMINARY INSIGHTS AND NEXT STEPS </li></ul>
Background Soil and Water Conservation Law (1991) Stipulates that farmers can contract marginal, barren & degraded land in watersheds and have ownership rights over what is produced, with the obligation to prevent soil erosion. Green Food Label, Environmental Label The Green Food Label indicates that food is produced with low pesticide and chemical fertilizer use. The Environmental Label indicates that non-food products are produced in line with national environmental and social development goals. PES/MES in China has been ongoing since the early 1990s…
1997 Yellow River dry-up, 1998 Yangtze River Floods led to… Sloping Land Conversion Program Initiated in 1999, pays farmers to retire & plant trees/grasses on marginal cropland. Has enrolled 9 million ha of cropland, spent over RMB 130 billion so far. Currently encompasses 25 provinces, 2279 counties, and over 32 million rural households. Forest Ecosystem Compensation Fund Farmers and communities paid to conserve key “public benefit” standing forest area. Initiated in 2001, has spent over RMB 13.34 billion (RMB 3.34 billion in 2007 alone), currently covers over 105.2 million ha of forest area across 30 provinces. ...which have generated significant activity and momentum at both central and local levels… Background
11 th 5-year plan (2006-2010) Calls for policymakers to develop “ecocompensation” pilots and to quicken the pace of development of “ecocompensation mechanisms.” Background … and has also been the backdrop to the development of “Ecocompensation Mechanisms”… <ul><li>Ministry of Environmental Protection: </li></ul><ul><li>Is calling for establishment of ecocompensation pilots in four key areas: </li></ul><ul><li>Nature Reserves </li></ul><ul><li>Key Ecological Function Areas </li></ul><ul><li>Mineral Development Areas </li></ul><ul><li>Watersheds </li></ul>
Background Pan Yue, Deputy Director of the Ministry of Environmental Protection: “ [ Ecocompensation policy is ] not only an environmental and economic, but also a political and strategic need. Ecocompensation policy that focuses primarily on instruments that transfer implementation and financial costs between developed and developing regions, between urban and rural areas, between rich and poor, between lower and upper watershed areas, between those benefiting from the environment and those suffering from environmental degradation, and between high-polluting high-energy industries and ‘green’ industries, needs to be improved.” (12 th Green China Forum, 2007).
<ul><li>Search on Google: </li></ul><ul><li>Chinese Phrase “Ecocompensation Mechanism” ( Shengtai buchang jizhi) : > 200,000 hits. </li></ul><ul><li>Search in English on combinations of “payments/markets for ecosystem/environmental services”: ~40,000 combined hits. </li></ul>Background
Motivations <ul><li>Many PES/MES-like programs in China might not be recognized as such and remain “off the radar”. </li></ul><ul><li>Existing summaries and sources of information have generally been sector specific, with little in terms of a cross-sectoral picture of policies and programs. Gaining a more comprehensive view could help identify overlap and where the private sector might best be brought in. </li></ul><ul><li>Domestic programs likely already have a wealth of experience, “lessons learned” and insights to provide policymakers and practitioners in China and internationally. </li></ul>
Watershed Ecocompensation <ul><li>Fujian Province </li></ul><ul><li>Min River Watershed </li></ul><ul><li>Jin River Watershed </li></ul><ul><li>Jiulong River Watershed </li></ul>
Watershed Ecocompensation <ul><li>Zhejiang Province </li></ul><ul><li>Dongtou County Water Resource Conservation Area </li></ul><ul><li>Hangzhou City </li></ul><ul><li>Deqing County </li></ul><ul><li>Hengjin Reservoir </li></ul>
Provincial FECP (Central: RMB 75/ha) Guangdong & Guangxi Provinces
Other Programs: Forestry SLOPING LAND CONVERSION PROGRAM SANDSTORM SOURCE CONTROL PROGRAM/ANTI-DESERTIFICATION NATURAL FOREST PROTECTION PROGRAM
Other Programs: Eco-Labeling Government “Green” Procurement & China Environmental Label “ Green” Food Certification Systems Organic Food Certification System
Other Programs: Agriculture Various Local Subsidies for Development of Green and Organic Agriculture Promotion of Rural Biogas Development (Ministry of Agriculture) Promotion of Conservation Tillage (Ministry of Agriculture)
Other Programs: Energy Export Tariffs on Energy-Intensive Industries Renewable Energy Law (2005) Energy Efficiency Law (2007)
CDM, Emissions Trading, etc. Various emissions-trading experiments going on. Clean Development Mechanism Beijing & Shanghai Environmental Trading Centers Recently Set Up
Preliminary Insights <ul><li>Significant diversity in local policy exists. </li></ul><ul><li>However, a significant local-level innovation is also occurring, distinct from central initiatives. </li></ul>-- Also in how local governments weave together different central policies and funding sources in creative ways to address local resource issues. <ul><li>Most of these programs and initiatives are domestically driven, not internationally. </li></ul>-- Primarily in the form of variations on central policy.
Preliminary Insights <ul><li>The vast majority of both central and local initiatives involve water resources. </li></ul><ul><ul><li>FECP: 80.1% of public benefit forest area is in headwaters, watersheds, wetlands or areas affected by severe soil erosion or desertification. </li></ul></ul>China ranks 5 th in total freshwater resources, but per-capita resources are < 1/3 world average and < 1/10 world average in North China.
Preliminary Insights <ul><li>Local and provincial-level ecocompensation policies are generally arising in richest provinces/municipalities. </li></ul><ul><li>Province / 2006 per capita Gross Reg. Product rank: </li></ul><ul><li>Beijing / 2 </li></ul><ul><li>Zhejiang / 4 </li></ul><ul><li>Fujian / 9 </li></ul><ul><li>Guangdong / 6 </li></ul><ul><li>Shandong / 7 </li></ul><ul><li>Liaoning / 8 </li></ul>