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Ecological effectiveness of payment for ecosystem services to identify incentive priority areas: Sloping land conversion program in China

Zhenmin Ding and Shunbo Yao

Land Use Policy, 2021, vol. 104, issue C

Abstract: Identifying incentive priority areas could improve the sustainability of payment for ecosystem service (PES) schemes. However, the lack of systematic and rigorous assessing ecological effectiveness of PES has resulted in some challenges to identify incentive priority areas in China. This study aimed to assess ecological effectiveness of China’s largest PES scheme, the Sloping Land Conversion Program (SLCP) for identifying the incentive priority areas. Firstly, we used the financial investments as the substitution variable of SLCP. And then the maximum marginal method was adopted to determine the reasonable lag periods of the SLCP`s financial investments. Finally, the panel fixed effect model (with regional dummy variable) was also applied for assessing its ecological effectiveness in different zones. We found that after the implementation of the SLCP, the vegetation improved significantly in Shaanxi province. The average normalized differential vegetation index (NDVI) was 0.831 in 2015, with an increasing rate of 15.097% compared with 2000, although it had some degeneration between 2010 and 2015. It took about four years after investments to realize its greatest performance benefits. The overall financial efficiency showed a pattern of "higher in the north, lower in the south" in Shaanxi province because the afforestation costs in the south were more expensive than that in the north of Shaanxi province. However, some previous key SLCP zones in the north had also been invested excessively, such as Wuqi, Zhidan and Ansai counties. Hence, the government should invest in higher financial efficiency zones based on the incentive priority areas if using the current payment price system.

Keywords: Ecosystem services; Ecological effectiveness; Financial investments; Maximum marginal method; Priority areas (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eee:lauspo:v:104:y:2021:i:c:s0264837721000739

DOI: 10.1016/j.landusepol.2021.105350

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