Payment for Ecosystem Services in China

When CGS first arrived in China, "payment for ecosystem services" (PES) was a term bandied about by Chinese government officials almost as frequently as "sustainable development." It may be a buzzword, but PES is worthy of some greater attention, not least because China's government appears to take the concept seriously.

PES is basically paying people to exercise stewardship over natural resources that provide economic value. Thus, Shanghai might pay adjacent communities not to sell or build on coastal wetlands to reduce the risk of flooding and storm damage to the city, for example.

As a country with diverse, complex ecosystems that have been imperiled by economic growth, China could use PES as an alternative method of protecting critical environmental resources. Moreover, PES has potential as a poverty-reduction strategy. It should be noted that China has already implemented some PES schemes, such as its Sloping Land Conversion Program, which subsidises grain purchases for farmers who agree to reforest sloping land (thus combatting erosion). A 2006 report entitled "Developing Future Ecosystems Services Payments in China" provides some helpful thoughts on how PES could be usefully implemented in China.

The report discerns three types of rights which are critical for PES: rights to resources (possessed by the seller of ecosystem services), rights to access ecosystem services (which are purchased from the possessor by the buyer), and rights to buy and sell ecosystem services, which are possessed by both parties (p. 25). As the report notes, if such a framework is to be implemented in China, the uncertain legal character of rural land tenure will need to be resolved (p. 64).

Moreover, the report notes, land management is the currently the responsibility of four different ministries; some coordination or consolidation would be useful. Covering local implementation costs in PES project budgets is essential to actual implementation (p. 58). Finally, starting by expanding watershed rights systems would be useful because such systems are typically easiest to implement.

It's welcome, then, that the Chinese government is co-financing, with the Asian Development Bank, a technical assistance study which aims to develop national guidelines for eco-system compensation in river basins. The study, begun in 2008, aims to develop guidelines to identify the rights and responsibilities of various stakeholders, monitoring and evaluation, and changes to tax systems. If successful, the report will do much to encourage the development of PES in China.

However, one of the recommendations in Developing Future Ecosystems Services Payments in China, clarifying land tenure, deserves further mention. Rural land tenure rights, though supposedly set in law, in fact vary by locality. Efforts to change the situation often run into difficulties, as the government's recent attempts at rural land reform indicate.

CGS is often interested in the political and social dimensions of environmental change, and here is a good example of how macro-political structures impede environmental protection. Land tenure is tricky in China because of the history of Communist policies, concern for rural opinion, and the priorities of local government. It won't be easy to hack through this thicket of political and social interests, but for the sake of PES in China, let's hope it can be done.