Eco-compensation in China: Theory, practices and suggestions for the future

Eco-compensation is the most important form of compensatory conservation in China. However, this compensatory mechanism is criticized for vague definition and massive government participation. For better understanding of eco-compensation in China, this paper compares theories and practices of compensatory mechanisms in China and abroad. The analysis of theoretical backgrounds shows that eco-compensation in China is a combination of ‘ecological compensation’ and ‘payments for ecosystem services’. Ten compensatory projects in China and abroad are assessed to reveal characteristics and problems of eco-compensation in China. The results show that compensatory projects in China lagged behind mature foreign compensatory projects in clarity of property rights, responsibility fulfillment, executive efficiency, effectiveness, sustainability and equality. The massive participation of the government is the major reason for the poor performance of compensatory projects in China. However, government participation is necessary at the present stage in China for the income gap and beneficiaries' low willingness to pay. For the improvement of eco-compensation in China, suggestions are given on the choice of non-market valuation methods, the creation of property rights and the establishment of market mechanisms. •Eco-compensation in China combines ecological compensation and PES.•Government plays the dominant role in eco-compensation in China.•Massive government participation has some negative impacts on eco-compensation.•Government participation is necessary in eco-compensation in China at present.