China’s PES-like horizontal eco-compensation program: Combining market-oriented mechanisms and government interventions

Abstract

Payment for Ecosystem Services (PES) conceptualizes a pro-market conservation approach to address ecological problems, but political influences in social reality always challenge PES implementations. There remains limited known about PES(-like) practices in authoritarian states like China. Particularly, the Chinese state launched the Horizontal Eco-compensation program, labeled as combining market-oriented mechanisms and governmental interventions. This paper examines how horizontal eco-compensation (HEC) is framed in China and deployed as a form of practicing state environmental governance. We employ an X-Y dimension framework to critically examine China’s HEC policies, focusing on the interplay of policy tools and project components. We find that China’s HEC has typical characteristics of market-oriented ecosystem services, including marketization, commodification, privatization, and devolution. China’s HEC also embodies at least three forms of authoritarian intervention: governments arrange most HEC financing; governments often act as ES providers and/or buyers; and governments also supervise the HEC’s implementation. We further argue that China’s HEC may be effective in the short term, but it is not sustainable in the long run. These findings contribute to broader PES literature on how the idea of PES is translated and practiced in an authoritarian state.