Cost–benefit analysis for China's Grain for Green Program

Abstract

The Grain for Green Program (GGP) that the Chinese government has implemented, the world's largest ecological restoration plan, has an important component based on payments for ecosystem services. However, the program's net benefits (which include compentation payments) remain unclear. To solve this problem, we proposed an improved cost–benefit analysis method that reveals the specific relationship between the benefits of each type of restoration and the multiple costs that must be incurred to generate those benefits. The results showed that the benefits and net benefits of GGP were 1749.2 × 109 RMB and 637.2 × 109 RMB, respectively in 2017. These were equivalent to total and net benefits that averaged 60.17 × 103 RMB·ha−1·yr−1 and 21.92 × 103 RMB·ha−1·yr−1, respectively, across the four methods. Afforestation of degraded land had the biggest total cost (509.1 × 109 RMB·yr−1), whereas establishing fruit tree plantations produced the highest net benefit (244.2 × 109 RMB·yr−1), but the best cost–benefit ratio was obtained by natural forest conservation (366.8%). To improve the net benefits of GGP while balancing the relationship between environmental protection and economic development, the GGP must be adapted so that managers plan program implementation based on net benefits; to do so, planners should choose the method for each site that maximizes the program's benefits.