China’s program of offering rewards for ecosystem services is growing rapidly, but whether such programs support sustainable livelihoods is unclear. In places like Yunnan Province’s Songhuaba watershed, the programs often cause more community and environmental stress than they relieve.

The Songhuaba watershed became a focus for rewards for environmental services (RES) programs in Yunnan. The watershed is a major source of water for the province’s political and financial capital, Kunming. As a result, Songhuaba’s agricultural and livestock-raising operations have come under critical government focus.

Smallholder grain growers, who supplement their income by growing tobacco, vegetables and livestock, make up most of the population of Songhuaba. Many have already received cash and grain payments for government-promoted watershed protection such as converting sloping-land agricultural land to forests and orchards.

Involvement in the scheme is supposed to be voluntary and, in some cases where labor is short and land is plentiful, the payments are a welcome income boost for poor upland farmers. But in areas where land conversion is seen as a dire need, such as the Songhuaba watershed, they are not always so well received or beneficial.

The World Agroforestry Centre’s Songhuaba Watershed Rewards for Environmental Services project team interviewed Mr Jiao, who supports a household of six by growing corn, wheat and a few types of vegetables. 

Jiao claims that he was required to convert his agricultural land and was not paid a sufficient compensation. He received 600 yuan, but he believed 800 yuan would be an accurate amount to compensate him for the loss of income from his agricultural production.

The government’s program is also uprooting families and making arable land scarcer and more expensive as smallholders on land particularly close to the Songhuaba reservoir are being relocated to less environmentally sensitive land.

These examples are perhaps unexpected casualties in the Chinese Government’s enthusiasm for driving forward various environmental programs. The government’s willingness to pay for the environment skyrocketed after large-scale flooding in Southwest and Northeast China in 1998. As a result, the government has invested more than USD 90 billion in the sector, particularly in watershed protection and reforestation programs.

China’s Rewards for Environmental Services programs are expected to grow further. The country’s dominance in international carbon markets as well as its expanding engagement in eco-labeling and organic product markets are other indicators of the possible directions and scale of future growth in such programs.

The problems of Mr Jiao and others like him are small examples of a much bigger issue. The difficulties that have been documented in Songhuaba, Sloping Land Conversion Program, Four Wastelands Policy and other major ‘eco-compensation’ schemes need to be properly examined so that better ways to avoid adverse impacts on livelihoods can be found and equitable, effective and sustainable reward schemes developed.