||Subsidies were given to those farmers who have returned their cultivated land to forests according to verified areas (By the end of 2012, cumulatively 324.7 billion yuan RMB, benefiting 120 million farmers each household 7,000 yuan RMB. Since 1999, the central government has been subsidizing those households that have returned their cultivated land to forests according to the actual areas returned and verified. These households also have the ownership of forests that grow on returned land, with contract period for owning and using returned land being as long as 70 years, while enjoying preferential tax incentives for benefits from use of returned land. In 2007, the State Council issued a notice on improving the policy of returning cultivated land to forests, with a view to increase the subsidies to related households. According to this notice, households living in the Yangtse River Basin and South China can be subsidized in cash by 1,575 yuan RMB per hectare of land annually, while households living in the Yellow River Basin and North China can get a cash subsidy of 1,050 yuan RMB per hectare of land. Farmers that return land to forests with ecological functions can be compensated for eight years, while those that return land to forests with economic functions can be compensated for five years. From 2008 to 2011, the central government provided specialized grants totaling 46.2 billion yuan RMB. By the end of 2012, the central government has invested cumulatively 324.7 billion yuan RMB, and 124 million farmers in 2,279 counties directly benefited from this investment, with per household being subsidized 7,000 yuan RMB on the average.
Subsidizing the projects on natural forest protection. Natural forest protection project: 118.6 billion yuan RMB in the first phase, and 244 billion yuan RMB in the second phase from 2011 to 2020. Natural forest resources protection projects were initiated in 17 provinces in 2000. The central government subsidized forest management and conservation as well as seedling cultivation and reforestation. The central government also provided subsidies by covering pension insurances for forest enterprise employees and social expenditures of forest enterprises, and providing basic life guarantees for laid-off forest workers. The total investment for the first phase of this project went up to 118.6 billion yuan RMB. At the end of 2010, the State Council decided to implement a second phase of this project from 2011 to 2020, with 11 more counties (cities, districts) to be included in the project. The subsidy provided for reforestation will be 4,500 yuan per hectare, and those for enclosing mountains for forest conservation and aerial seeding will be 1,050 yuan RMB per hectare and 1,800 yuan RMB per hectare respectively. Education subsidy is 30,000 yuan RMB per person per year. Sanitation subsidy for forest areas in the upper reaches of the Yangtse River, the upper and middle reaches of the Yellow River and Inner Mongolia is 15,000 yuan RMB per year and 10,000 yuan RMB per year respectively. For state-owned forests, the central government provides 75 yuan per hectare annually as forest conservation fee. For those collectively-owned forests that also belong to national-level pubic benefits forests, during 2011-2012, the central government provided 150 yuan RMB per hectare annually as part of the funds for ecological compensation. Since 2013, this rate has been increased to 225 yuan RMB per year. For local benefits forests the compensation funds are provided mainly from local government budgets, while the central government also provides 45 yuan RMB per hectare per year as forest conservation fee. The total investment of the second phase of this project will be around 224 billion yuan RMB.
Subsidizing projects of returning grazing land to grasslands. Subsidies to those herdsmen who have returned their grazing land to grassland to cover part of costs for grassland enclosures and forages (17.57 billion yuan RMB between 2003-2012 benefiting more than 4.5 million herdsmen). Since 2003 such projects have been implemented in eight provinces such as Inner Mongolia, Sichuan, Qinghai and Xinjiang. The central government has been subsidizing the construction of fences and the provision of forages. In 2011 the central government raised the subsidy standards and percentages. 300 yuan RMB per hectare is provided to fence building in Qinghai-Tibet Plateau while 240 yuan RMB per hectare to other regions. A subsidy of 300 yuan RMB per hectare is provided to reseeding grass; 2,400 yuan RMB per hectare to artificial forage farming and 3,000 yuan RMB per household for building feeding stables and rings. The central government invested cumulatively a total of 17.57 billion yuan RMB in this project during the period 2003-2012, with projects having benefited 174 counties, more than 900,000 farm households and more than 4.5 million farmers and herdsmen.
Establishing subsidies and incentives for ecological conservation of grasslands. Mechanism to subsidize and reward grassland ecology conservation established in 2011 (28.6 billion yuan RMB cumulatively, respectively to areas (820,000 km2) where grazing bans are implemented and areas (1.737 million km2) where balancing grass supply with herds is required. Since 2011 eight provinces or autonomous regions with most of the grasslands in China have established incentive measures for grassland ecology conservation, with a subsidy of 90 yuan RMB per hectare annually for grasslands where grazing is banned; 22.5 yuan RMB per hectare annually for grasslands where balance of herds and grass supply is implemented. Subsidies are also provided to herdsmen for their production, with 150 yuan RMB per hectare annually for grass seed and 500 yuan RMB per household annually for production materials. Herdsmen are also trained to promote their shift to new jobs. The subsidies for grassland ecology conservation increased from 13.6 billion yuan RMB in 2011 to 15 billion yuan RMB in 2012, with cumulative total investment reaching 28.3 billion yuan RMB. By the end of 2012, the areas covered by subsidies for grassland grazing bans have reached 820,000 km2, and the areas where rewards are given for keeping the herd-and-grass balance have reached 1,737,000 km2.
Subsidizing wetland conservation. In 2010 the Ministry of Finance together with the State Forestry Administration initiated subsidies for wetland conservation, which covered 27 wetlands of international importance, 43 natural wetland nature reserves and 86 national wetland parks. Some local governments also increased support to wetland conservation from government budgets, and gradually included important wetlands as part of ecological compensation. Restore mangroves and tidal flats and other important wetlands (nearly 3.875 billion yuan RMB since 2010).
Establishing funds for compensating forest ecological benefits. In 2004 China established national funds for compensation of forest ecological benefits, which subsidize plantation, nurturing, conservation and management of national-level public benefits forests, with funding allocated from the central government budgets (annual payment reaching 3 billion yuan RMB). Among them, a subsidy of 75 yuan per hectare is provided annually for state-owned national-level public benefits forests, and 225 yuan per hectare annually for national-level public benefits forests owned collectively and privately. In 2007, the Ministry of Environmental Protection issued guidance for undertaking pilot work in ecological compensation, which required acceleration of the establishment of ecological compensation mechanisms for PAs. Some regions have established ecological compensation mechanisms on a pilot basis. For example, Jining City has issued rules for ecological compensation for wetland loss in Nansi Lake, Shandong Province. Currently the areas that have received such subsidies have reached 924,000 km2. In 2013 the central government provided a total of 14.9 billion yuan RMB for compensation for ecological benefits of forests. Local governments also compensated for local public benefits forests.
Establishing national mechanisms of ecological compensation for national key ecological function zones. Since the central government budget established in 2008 an item of fiscal transfers for national key ecological function zones, the scope of transfers has been constantly expanding. In 2012, funds were transferred to 466 counties (cities, districts), with the total funds reaching 37.1 billion yuan RMB. The funds played an important role in supporting development of PAs. In 2013 funds were transferred to 492 counties and 1,367 land zones prohibited for development, with the total of funds transferred reaching 42.3 billion yuan RMB. In 2013, scenic spots in Yunnan, Guizhou, Sichuan and Xinjiang were included in the pilot work on ecological compensation.
Rural environment improvement (specialized fund of 19.5 billion yuan RMB since 2008)
Pilot Ecological Compensation in Xin'anjiang River Basin (Funds of 300 million yuan RMB were allocated in 2011 for compensation and specially used for water pollution control and water quality improvement in the upper reaches of Xin’an River. Among them 200 million yuan was allocated from the central government budget and 100 million yuan provided by Zhejiang Province.)
Promoting establishment of mechanisms for ecological compensation. In 2010 NDRC together with relevant ministries and commissions drafted a regulation on ecological compensation. This draft regulation provides principles, areas, targets, approaches and criteria for ecological compensation. Currently NDRC is studying and drafting a set of “recommendations for establishing and improving mechanisms for ecological compensation”.
1. PRC-GEF Partnership: Mainstreaming Biodiversity Protection within the Production Landscapes and Protected Areas of the Lake Aibi Basin (GEF 2008)
2. Grain for Green; Four Wastelands Auction Policy
3. natural forest protection programme, sloping land conversion programme, forest ecosystem compensation programme
4. Case studies of biodiversity markets for forest environmental services: Pippa Horticulture Company Ltd – access rights, Shares in National Scenic Reserves/ Forest Parks, Protected wetland for endangered cranes; Case studies for landscape beauty markets: Jade Peak Gorge - private park & access permits; Case studies for bundled environmental services: National Ecological Benefits Compensation Fund - payments for environmental services; Case studies for watershed protection markets: Watershed protection contracts, Miyun Reservoir restoration and maintenance scheme, Xingguo County - watershed protection contracts, Mini-watershed restoration schemes, Yao County watershed protection contracts
5. Workshop on Payment Schemes for Environmental Services: Development of China's Ecological Compensation Scheme, Local Experience with the Ecological Compensation Scheme in Guangdong Province, Local Experience with the Ecological Compensation Scheme in Anhui Province, Reflections on China's Forest Ecological Compensation Fund, Description of Cropland Conversion Program (2002)
6. Policy of non-gratuitous use of scenic spots resources, fund for compensation of forest ecological benefits, Regulation on Restoration of Forests from Farmlands, tax preferences for the operating income gained from the conservation and sustainable use of biodiversity
7. Converting water-intensive paddy to dryland crops, China (2012)
8. Promoting Market-oriented Ecological Compensation Mechanisms: Payment for Ecosystem Services in China (2007)
9. Eco-Compensation for Watershed Services in the People’s Republic of China (2011)
10. A Pilot Study on Payment for Ecological and Environmental Services in Lashihai Nature Reserve, China
11. Compensation payments for maintaining – saving Beijing's Miyun Reservoir’s Water Quality (2012)
12. Planting orange orchards to curb soil erosion, China – the Ningu county's Meijiang Watershed (2012)
13. Chinese Practices of Ecological Compensation and Payments for Ecological and Environmental Services and its Policies in River Basins (2006)
14. Regional payments for ecosystem services (PES) scheme funded through monthly salary contributions in Xinjiang, Uyghur Autonomous Region, China (2012)
15. China’s Sloping Land Conversion Program: Institutional Innovation or Business as Usual?
16. National-level Soil Erosion Control Policies in China (2010)
17. Payment for Ecosystem Services and Alternative Livelihoods in Rural China (2012)
18. Industries share sales revenue for watershed protection – Xingguo County, China (2012)