Since 2002, China has implemented some of the largest schemes in the world that provide rewards for environmental services.

For example, the Sloping Farmland Conversion Program provided grain and cash payments to farmers and financial support to local forestry agencies to convert arable land on sloping land into forests. Following a ban on commercial logging in the upper reaches of the Yangtze River in 1998, the Natural Forest Protection Program has been financing the transition of state-owned forestry enterprises to forest conservation and supporting forest conservation activities in an area equivalent to around half of China’s total natural forest area. Other market-based programs for watershed services have also been implemented locally and regionally.

The early work of RUPES in China focused on building the capacity of researchers and local forest departments in documenting and understanding the impact of forest-sector programs, identifying issues, developing innovative ways to address the issues, and supporting dialogue with policy makers at different levels. This included convening workshops, training in research methods, supporting field assessments and experiments and publishing information. More recent work has expanded from this early focus on forest resources to include assessment of the potential for rewards’ schemes in watersheds and rangelands.

Schemes that involved recurring payments for improving land management practices in China:

  • Sloping Farmland Conversion Program
    • Annual payments for afforesting or planting grass on degraded lands. Mostly central government funding with some minor funding from local governments
  • Grassland Retirement Program (2005)
    • Grassland covered about 40% of China’s land area
    • Overgrazing was the main issue
    • Annual payments for exclosure, seasonal or rotational grazing. Mostly central government funding with some minor funding from local governments
  • Grassland Conservation Rewards Program
    • Annual payment per hectare for not exceeding stocking capacity of grasslands.

Key findings

A review of payments for environmental services’ schemes distinguished between four types of payments:

  • Type 1: Provision of technical support for adoption of improved management practices
  • Type 2: investments to support initial costs of improving grassland management but without enforcing links between payments and adoption of improved practices
  • Type 3: Payments for land users that are conditional on adopting improved management practices but without tying payments to environmental outcomes
  • Type 4: Payments to land users that are conditional on environmental services delivered. 

The Chinese Government implements a range of scheme types, from government investment and extension support but without strong monitoring of adoption (types 1 and 2) through schemes that make incentive payments for adoption of improved management practices (type 3). Payments conditional on delivery of measured environmental services are mostly limited to market-based schemes, such as voluntary carbon markets.

Some large-scale schemes, such as the Grassland Retirement Program, initiated in the early 2000s, sought to increase environmental services by targeting degraded grassland areas, but monitoring of activities beyond the initial investment phase has been limited. In 2009, the Tibet Autonomous Region began to pilot a scheme to reward herders for improved grazing practices on both degraded and non-degraded grassland. In 2011, this was expanded throughout China’s grassland areas. The national Grassland Ecological Conservation Rewards Scheme makes payments on a per unit of land area basis for herders that maintain sustainable stocking levels on their land. New mechanisms for monitoring compliance are being developed.

Market-based investments, such as carbon sequestration projects, depend on monitoring of activities and methodologies that estimate the environmental services delivered. Monitoring mechanisms being developed in a pilot grassland carbon project may have lessons for government schemes.

Policy influenced

  • Rewards for ecosystem services’ schemes for grassland, State Council, 2008–2010
  • Ecological land-use plan, Xishuangbanna Prefecture, 2010.