Is the “Ecological and Economic Approach for the Restoration of Collapsed Gullies” in Southern China Really Economic?

Chengchao Wang, Yaoqi Zhang, Yecheng Xu and Qichun Yang
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Chengchao Wang: Key Laboratory of Humid Subtropical Eco-geographical Process of the Ministry of Education, College of Geographical Sciences, Fujian Normal University, Fuzhou 350007, China
Yaoqi Zhang: School of Forestry & Wildlife Sciences, Auburn University, Auburn, AL 36849, USA
Yecheng Xu: School of Forestry & Wildlife Sciences, Auburn University, Auburn, AL 36849, USA
Qichun Yang: Pacific Northwest National Laboratory, 5825 University Research Court, Suite 1200, College Park, MD 20740, USA

Sustainability, 2015, vol. 7, issue 8, 1-16

Abstract: Collapsed gully erosion constantly plagues the sustainability of rural areas in China. To control collapsed gully erosion, an ecological and economic approach, which uses tree plantation to gain economic benefits and control soil erosion, has been widely applied by local governments in Southern China. However, little is known about the economic feasibility of this new method. The objective of this study was to determine the effectiveness and economic benefits of the new method. Based on a case study in Changting County, Southeast China, two farms were selected to represent a timber tree plantation and a fruit tree plantation, respectively. The Annual Capital Capitalization Method and Return on Investment (ROI) were selected to conduct cost-benefit analysis. In contrast to previous studies, we found that the new approach was far from economic. The value of the newly-built forestland in Sanzhou Village and Tufang Village is 2738 RMB ha −1 and 5477 RMB ha −1 , respectively, which are extremely lower than the costs of ecological restoration. Meanwhile, the annual ROI is −3.60% and −8.90%, respectively, which is negative and also far poorer than the average value of forestry in China. The costs of conservation were substantially over the related economic benefits, and the investors would suffer from greater loss if they invested more in the conservation. Low-cost terraces with timber trees had less economic loss compared with the costly terraces with fruit tree plantation. Moreover, the cost efficiency of the new approaches in soil conservation was also greatly poorer than the conventional method. The costs of conserving one ton soil per year for conventional method, new method for planting timber trees, and planting fruit trees were 164 RMB, 696 RMB, and 11,664 RMB, respectively. Therefore, the new collapsed gully erosion control methods are uneconomic and unsuitable to be widely carried out in China in the near future.

Keywords: economic feasibility; cost-benefit analysis; collapsed gully erosion; environmental conservation (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2015
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