context: The latest ‘Ecological protection compensation regulations’ will act as an incentive for local governments to establish ecological compensation mechanisms, with those who protect ecology to be compensated by localities that benefit. The central government will provide compensation for ecology that does not cross provincial borders. Refining and standardising ecological compensation has been on the cards for years, with mechanisms in the Xin'an, Yangtze and Yellow River basins seeing some success, according to experts.
Li Qiang 李强 PRC premier recently signed an order promulgating ‘Ecological protection compensation regulations’ to come into effect 1 June.
The Regulations make the PRC the first country in the world to comprehensively legislate ecological protection compensation, according to Jin Leshan 靳乐山 China Ecological Compensation Research Centre executive director. It defines ecological compensation based on the basic principle that those who protect key ecosystems should be compensated.
Promulgation gives governments at all levels a legal basis and responsibility for fiscal vertical compensation and interregional compensation, Jia adds. It also encourages local governments to promote compensation through market mechanisms.
There have been three major difficulties with ecological compensation, notes Jia Wenlong 贾文龙 China Academy of Natural Resources Economics deputy director
- clarifying the subject of ecological compensation
- determining compensation scope
- working out how to calculate ecological and economic value
The Regulations respond to these difficulties, clarifying that the state will promote unified registration of national resources while also improving standards, monitoring and data systems.
Compensation is classified into major areas, including
- forests
- grasslands
- wetlands
- deserts
- oceans
- water bodies
- cultivated land
Financial vertical compensation will mainly be provided by the central government. Horizontal compensation between regions (CP note: for example, localities downstream may compensate localities upstream for the protection of river ecology) will largely be provided by provincial governments.
The specific scope and method of compensation will be determined by factors such as the level of regional economic development, financial affordability and protection effectiveness.