Toward a National Eco-compensation Regulation in the People's Republic of China

By Asian Development Bank

The Asian Development Bank and the National Development and Reform Commission of the People's Republic of China (PRC) undertook a study on eco-compensation regulations development in the country, on which this publication is based. The study examined the PRC's theory, practice, and legislation governing eco-compensation in selected ecological areas to map out the scope and content of a national eco-compensation regulation. Pursuit of its higher agenda of ecological civilization and development of its national eco-compensation regulation will require the PRC to capture the diversity that subnational projects have tapped, integrate its experience with eco-compensation at all levels of government into a coherent national regulatory framework, and harmonize this framework with existing laws and other legal instruments.

• Language: English
• Publisher: Asian Development Bank
• Release date: Nov 1, 2016
• ISBN: 9789292576561

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TOWARD A NATIONAL ECO-COMPENSATION REGULATION IN THE PEOPLE’S REPUBLIC OF CHINA

November 2016

Creative Commons Attribution 3.0 IGO license (CC BY 3.0 IGO)

© 2016 Asian Development Bank

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Some rights reserved. Published in 2016.

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ISBN 978-92-9257-655-4 (Print), 978-92-9257-656-1 (e-ISBN)

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Cataloging-In-Publication Data

Asian Development Bank.

Toward a national eco-compensation regulation in the People’s Republic of China.

Mandaluyong City, Philippines: Asian Development Bank, 2016.

1. Eco-compensation pilot projects.    2. National eco-compensation regulation.    3. People’s Republic of China.    I. Asian Development Bank.

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Contents

Figures, Tables, and Box

Figures

Tables

Box

Foreword

The People’s Republic of China (PRC) has been developing the concept and practice of eco-compensation for more than a decade, and its efforts have been internationally recognized. Provincial, municipal, and county governments have been undertaking innovative and wide-ranging experiments of different eco-compensation schemes. In 2010, the Government of the PRC determined that the time had come to comprehensively regulate eco-compensation at the national level, and designated the National Development and Reform Commission (NDRC) as the lead of this initiative. By 2013, coupled with reforms in forest ownership and massive government investment, eco-compensation was being hailed as one of the most important support measures to slow the degradation and loss of the country’s soils, grasslands, and forests.

Eco-compensation in the PRC is mainly a public mechanism to promote environmental protection and restoration, including through the payment for ecological services. It is a package of different mechanisms that employ monetary subsidies as an integral part of project support. The PRC intends to use the new national regulation to introduce market-based mechanisms in this transaction.

The PRC sees a national regulation for eco-compensation as an essential prerequisite for implementing crucial environmental safeguards. It is also an important policy measure for promoting the coordinated development of basic public services across the country. However, regulating eco-compensation is no small task. It requires a fundamental rethinking of the existing economic development model and educating people to create a resource-conserving and environment-friendly society in all parts of the country.

To spur that rethinking process, the NDRC, with support from the Asian Development Bank (ADB), undertook a 3-year study to map out the scope and content of a national eco-compensation regulation. The NDRC published the results of that study in Chinese in 2013. In response to the interest from other developing member countries, we prepared an English version, which is this publication.

This publication is the most recent product from ADB’s continuing collaboration with the NDRC—our earlier joint work include An Eco-Compensation Policy Framework for the People’s Republic of China: Challenges and Opportunities (2010), Payments for Ecological Services and Eco-Compensation: Practices and Innovations in the People’s Republic of China (2010), Eco-Compensation for Watershed Services in the People’s Republic of China (2011), and Developing Eco-Compensation in the PRC: The Way Forward (2013).

While this report primarily focuses on the findings and the recommendations of the 2011–2013 study, we need to be fully aware of the rapid progress the PRC is making in the environment protection related policies and regulations. The 2014 amendment of the Environmental Protection Law that came into force in 2015 provides the legal basis for a national eco-compensation mechanism and enables the use of market mechanisms for eco-compensation.

In 2015, the Central Committee of the Communist Party of China and the State Council released the Master Plan for the Reform of Ecological Civilization Institutions, calling for the establishment of an ecological civilization by 2020 consisting of a system for property rights of natural resource assets, an eco-compensation system for paid resource use, and an ecosystem protection market system, among others, so as to promote the modernization of the governance system and capacity of the state in the field of ecological civilization.

More recently, in May 2016, the State Council approved a paper entitled Several Opinions on Establishing a Sound Eco-compensation Mechanism and the Eco-compensation Regulations (Opinions Paper). The Opinions Paper calls for the establishment of new mechanisms to promote ecosystem protection, including eco-compensation, and notes that market-based mechanisms should be further studied and introduced. It also advocates the establishment of an initial distribution system for water rights, pollution rights, and carbon emissions rights, and the development of relevant