An Eco-Compensation Policy Framework for the People's Republic of China. Qingfeng Zhang

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СКАЧАТЬ held on 6-7 September 2009 in Ningxia Hui Autonomous Region. The Asian Development Bank’s (ADB) Director General for the East Asia Department, Klaus Gerhaeusser, led the international team of experts and speakers at the conference. ADB’s Director for Agriculture, Environment and Natural Resources Division of the East Asia Department, Kunhamboo Kannan, gave the inspiration and support for the preparation of this paper. ADB’s Principal Water Resources Management Specialist, Qingfeng Zhang, designed the conference program and finalized this paper with contributions from Natural Resources Economist, Tun Lin. Consultants Michael T. Bennett and Leshan Jin participated in the conference and prepared the initial draft of this report and gave valuable comments for the final report. International experts Robert Crooks, Eva Abal, and Hasan Moinuddin also attended the conference and provided valuable comments on the product at various stages of its development. Melissa Alipalo, Anthony Victoria, and Joy Quitazol-Gonzalez helped edit, design, and produce this product.

      This product has also benefited from the strong support of and close collaboration with the National Development and Reform Commission (NDRC), through whose successful organization and hosting of the conference made this report worthwhile. ADB is particularly grateful to Du Ying, the Vice Chairman of NDRC, for his leading role in cross-ministerial efforts on payment for ecosystem services in the PRC. ADB would also like to thank Qin Yucai, the Director of the Department of Western Regions Development of NDRC, and his colleagues Zhang Yadan, Tong Zhangshun, and Xiao Weiming for their excellent coordination and technical capacity in dealing with this cross-agency work.

      Abbreviations

ADB	–	Asian Development Bank
CCFG	–	Conversion of Cropland to Forest and Grassland
CRP	–	Conservation Reserve Program
ES	–	ecosystem service
EU	–	European Union
MEP	–	Ministry of Environmental Protection
NDRC	–	National Development and Reform Commission
NEPA	–	National Environmental Protection Agency
PES	–	payment for ecosystem services
PRC	–	People’s Republic of China

       Weights and Measures

ha	–	hectare
mu	–	a traditional Chinese unit of land measurement (1 mu = 1/15 ha)

      Currency Equivalents (1 September 2010)

Currency Unit	–	yuan (CNY)
CNY1.00	=	$0.14665
$1.00	=	CNY6.79878

      Note: $ refers to United States dollars, unless otherwise specified.

       Introduction: Ambition and Momentum for Eco-Compensation Policy

      The People’s Republic of China (PRC) is at an exciting phase in the development of its national environmental policy framework. The fast-paced economic growth of the past 3 decades has lifted hundreds of millions of rural dwellers out of poverty, but it also greatly multiplied the environmental challenges for policy makers at all levels of government, has increased the pressure on fragile ecosystems, created a range of new pollution and environmental safety issues, and further strained the country’s already limited per capita natural resource base. The imbalanced economic growth between regions was partly due to the regional differences in environmental resources. Regions with relatively fast economic growth have exerted greater demand on natural resources for food, water supply, and energy consumption, much of which are provided by poorer regions. Policy makers are debating the extent to which the economically advanced regions should pay poor regions for the provision of these environmental services. “Eco-compensation,” as it is known in the PRC, is important to sustainable use of natural resources and more balanced growth across regions.

Having experienced growth as it has, the PRC must now use its financial capacity to reverse environmental damage through closer monitoring, enforcing its environmental laws, and funding new initiatives and policies (Figure 1). The more prosperous regions now have the financial capacity to compensate poorer regions for the ecosystem services they provided during the rapid growth periods and will continue to provide for future growth.

Figure 1Government Revenue versus Selected Pollution Indicators, People’s Republic of China, 1998–2007

      CNY = yuan, CO₂ = carbon dioxide, COD = chemical oxygen demand, GDP = gross domestic product.

      ^aWastewater discharges are calculated as discharges from consumption plus untreated industrial wastewater discharges.

      Source: National Bureau of Statistics of China, various years. CO₂ emissions data are from the International Energy Agency (2009).

      In response to both the need and potential for addressing environmental damage, policy makers have been experimenting with new approaches to environmental management, resulting in a wide array of policy and program innovations under the broad heading of eco-compensation. Many of these incorporate or provide a policy framework for market-based approaches to payment for ecosystem services (PES).

       PES attracts respectable government financing levels

      Today, the PRC can be credited with driving some of the largest public PES schemes in the world. The government has

      •spent more than CNY130 billion ($19 billion) since 1999 on the Conversion of Cropland to Forest and Grassland Program (also known as “Grain for Green”), which has paid farmers to retire and afforest or plant grass on more than 9 million hectares (ha) of sloping or marginal cropland;

       Today, the PRC can be credited with driving some of the largest public PES schemes in the world

      •spent more than CNY13.34 billion ($2 billion) since 2001 on the Forest Ecosystem Compensation Fund, a program that pays households, communities, and local governments to protect about 44.53 million ha of key forest areas across 30 provinces in the country; ² and

      •conducted a total estimated transaction value of $7.8 billion on a variety of payment schemes for watershed services, which has escalated from eight in 1999 to more than 47 in 2008 and covering about 290 million ha.³

       PES policy gains momentum

      In 2005, the fifth Plenary Session of the 16th Central Committee of the Chinese Communist Party issued, for the first time, the principles for developing eco-compensation mechanisms. As a result, the State Council released Document No. 39, State Council Decision Regarding Using the Scientific Development View to Strengthen Environmental Protection, which states that the government “…should improve eco-compensation policy, and develop eco-compensation mechanisms as quickly as possible” (State Council 2005).⁴ The PRC’s Ministry СКАЧАТЬ