Abstract
Watershed eco-compensation (WEC) is considered a significant environmental policy instrument for watershed ecological protection and management. However, in the legislation and practice of eco-compensation in China, the development of the WEC mechanism is still in the initial stages. In this paper, the institutional opportunities and challenges of WEC are analyzed from the existing policies, laws, and economical instruments. Theoretically, WEC in China has seen a combination of punitive-based “Watershed Ecological Damage Compensation (WEDC)” and incentive-based “Watershed Ecological Protective Compensation (WEPC)”. Through a comparative analysis of domestic and foreign watershed compensation practices, the results demonstrate that most of China’s WEC projects have an insufficient legal basis, a single compensatory subject, insufficient compensation funds, and an imperfect market-oriented compensation mechanism. To improve watershed eco-compensation in China, it is recommended to strengthen legislation, select diversified eco-compensation approaches, and establish a market-based and systematic eco-compensation mechanism for watersheds.
Highlights
The watershed’s ecological environment and water resources contribute significantly to agricultural production and the people’s well-being [1,2]
This paper summarized and discussed the present policies, laws, and economic instruments relevant to Watershed eco-compensation (WEC) in China and payment for watershed ecosystem services’ (PWES) projects abroad based on the official documents and data
This review first analyzed the primary federal policy and development planning files related to watershed protection in the last few years
Summary
The watershed’s ecological environment and water resources contribute significantly to agricultural production and the people’s well-being [1,2]. Excessive exploitation and utilization of watersheds harm the watershed ecosystem environment. The reduction in biodiversity, water quality degradation, and decline in ecosystem stability have become severe [3–5]. Watersheds are typically public goods for both the upstream and downstream, characterized by non-competitiveness and non-exclusiveness. The externalities lie in the public goods, characterized by non-competitiveness and non-exclusiveness. For instance, soil conservation and afforestation may generate positive externalities in the watershed ecosystem; on the other hand, phenomena such as discharge pollution and excessive exploitation and utilization have negative externalities in the watershed ecosystem. It is unrealistic to achieve zero externalities [6,7]
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