Eco-compensation in China: achievement, experience, and improvement.

Abstract

Payments for ecosystem services (PES) provide innovative solutions for global environmental governance. China, the largest developing country, always faces severe ecological and environmental problems. China created an eco-compensation mechanism that combines the PES mechanism with the government's standardized management, which has achieved remarkable results. Government-led, social participation, and market-oriented operation are its main characteristics. More importantly, the mechanism helps China achieve its anti-poverty goals. Part of its experiences has been transformed into formal institutions, i.e., farmland fallow and rotation policies. However, some problems have also plagued further development, such as the lack of environmental property rights, the single source of funds, and the shortage of standardized ecological value assessment technology. We suggest that it is necessary to improve the stability of China's eco-compensation mechanism. The achievement of China's eco-compensation mechanism provides helpful guidance for other developing countries. For example, it is enhancing the role of government administrative power and the flexibility of the system through the policy "sandbox," i.e., the policy pilot, encouraging the participation of multi-stakeholder groups, and so on. Last but most important, the policy and institutions must be closely integrated with the nation's state for it to be sustainable.