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Paying for nature

Beijing’s strategy for clean water during the Olympics? Pay rural farmers to “grow” it. Katherine Ellison explores China’s new hope for conserving the precious natural resources it has left.

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Combine global warming with an already dry climate and a growing population, and you’ve got the nightmare haunting Beijing: the risk that the capital may run out of water, perhaps just in time for this year’s “green Olympics.” 

Drinking supplies are so precarious in this northern city of 15 million that officials are spending tens of billions of dollars to import water from southern rivers. Less publicised, however, is an innovative scheme in which Beijing pays residents of neighboring Hebei province to “grow” water as if it were an agricultural crop.

The plan is one of several strategic investments in nature that puts China at the forefront of a new way of thinking about environmental conservation. Until recently, most of the world left the care of nature in the hands of philanthropists. Yet in the face of abundant evidence that this approach has failed – including a warming climate, depleted soils and vanishing pollinators [pdf] – scientists and activists have switched to urging governments and businesses to pay people to care for the watersheds, flood plains and other landscapes on which we all depend. Healthy, forested watersheds, for instance, help filter drinking water and prevent soil erosion into rivers. Undeveloped flood plains protect nearby human settlements.

Necessity – in the form of some of the world’s worst environmental crises – has made China a leader in this new way of viewing nature. Throughout the country, land-use planners have embarked on bold and costly experiments to preserve hard-working “natural assets.” The results are already yielding lessons for the rest of the world.

Water for Beijing

“We’re spending a huge amount of money,” Xiaoping Wang, a high-ranking official at Beijing’s Parks and Forestry Department, said of the Hebei agreement, in which the Beijing municipal government essentially pays to increase water conservation in the neighboring province.

As part of the deal, two Hebei prefectures will switch from traditional farming to water-saving crops, meaning less rice, more corn and potatoes. Farmers will also plant and tend trees on their property and reduce pesticide use to help cut back on the sediment and pollution entering rivers that feed the capital’s two main reservoirs. In return, among other things, Beijing will provide some US$16 million in direct yearly payments to farmers for water stewardship, according to the amount of land they own; subsidise Hebei farmers’ chickens, eggs, and milk; and build two new highways for products from Hebei to reach the capital’s lucrative market more easily.

The plan highlights China’s awareness of how millions of individual decisions by landowners can affect human life-support systems, such as drinking water from rivers and lakes. Over the past few years, Beijing has moved many industrial factories out of its watershed, leaving the farmers as the main threat to water quality. Laws exist, of course, to punish polluters, but with sticks having generally proven ineffective, Chinese planners are willing to try carrots.

It is a tactic increasing in popularity throughout the world, as growing populations tax fragile environmental resources. More often than not, environmental benefits are delivered by one place to another, with poor people living in the rural source areas and richer people as urban recipients. Accordingly, many big environmental groups and multilateral lenders are focusing on conservation projects geared toward converting land-managers, like the Hebei farmers, into conscientious – and compensated – stewards.

Conserving natural assets

The Beijing-Hebei pact is one of several ways that China has embraced this concept. Others promise to be even more dramatic. For instance, the latest Five-Year Plan, for 2006-2010, involves mapping the entire country in terms of conservation priorities. According to the Plan, no development will be allowed on “ecological function zones” , which include forested watersheds, which purify drinking supplies through the filtering action of roots, and support flood control by limiting soil erosion.

In hopes of preventing the kinds of catastrophic floods that killed thousands of Chinese along the Yangtze River in 1998, China has banned logging on approximately 30 million hectares of land. It is also requiring farmers to switch from growing crops to tending forests on some 60 million hectares of so-called “sloping lands.”  However, compensation budgets aren’t intended to last forever, and an open question remains regarding how these farmers-turned-foresters will earn their incomes once they run out.


In the past eight years, China has spent more than US$17.4 billion on its Sloping Land Conversion Program, according to the State Forestry Administration. But the programme has had serious drawbacks, according to a 2005 report to the International Institute for Environment and Development, which revealed serious problems with the targeting of funds. Struggling to improve their results, China’s leaders increasingly have been working with US scientists and environmental NGOs who offer up-to-date techniques to identify and conserve natural assets. Last September, for instance, several Chinese government-affiliated scientists met with a team from the Natural Capital Project – a year-old partnership between Stanford University, The Nature Conservancy and WWF. The project has developed mapping and modeling software to pinpoint landscapes where conservation makes the most sense, a tool that has great potential to help the Chinese government fine-tune its concept of preserving “ecological function zones.”

“We’ve been doing only the simplest of evaluations so far, so these tools could be very useful for us,” said Wang Yukuan, a member of the Chinese Academy of Sciences.

Pay as you go

The idea of paying farmers to help protect the environment has gained popularity in China as it has won support from NGOs with deep pockets over the past decade. In the restored antique town of Lijiang, for instance, in the Himalayan foothills of Yunnan province, He Yi, a young scientist with Conservation International, has been lobbying local officials to support a plan to help preserve local water supplies. The World Bank has contributed US$20,000 for initial research.

Lijiang is famous for its clear, clean water. Bright orange koi flash in the narrow canals that line the cobble-stoned streets of its Old Town, which is listed among the United Nation’s World Heritage Sites, as tourists – some 4 million a year – wander through a maze of shops selling jade, silver, weavings and tea.

As elsewhere in China, however, Lijiang’s water supplies are under pressure. Urban development encircling the Old Town is fast increasing, as are the flocks of tourists visiting each year. Local officials have recently turned to nearby Lashi Lake to supplement a pond in the Old Town, which has long been its sole water source. But farm pollution has made that lake’s water all but unusable, despite the fact that the area around the lake is at least nominally a nature reserve.

“We’d like to make Lijiang a positive example for the rest of China,” says He Yi. His idea is to substantially increase the fees paid by tourists visiting the area, and use the money to pay farmers to try out less-polluting practices.

Lashi Lake farmers already receive small monthly payments to reward them for not killing the exotic birds that spend winters in the reserve, and often eat some of their crops. In interviews, they showed little understanding of the dynamics of agricultural pollution, but all appreciated the promise of subsidies. As one farm worker said: “The more, the better!”

What do you think: Is China taking the right approach? Can paying for “ecosystem services” be sustainable over the long-term?


Katherine Ellison is the co-author of “The New Economy of Nature: The Quest to Make Conservation Profitable,” and a consulting writer with Stanford’s Natural Capital Project. She traveled to China with scientists from the project last September.

Homepage photo by Natmandu


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Default avatar
匿名 | Anonymous


谢谢,这是一篇很有用的文章。我好奇中国每年GDP怎么看上去像将那些花费在人类生存最基本的元素“水”上的“大笔资金”(王晓平)纳入重要因素。说句离题的话,在2005年12月,中国出版了一本有几分争议的书。它主要说的是西藏的水如何能拯救中国(《西藏水救中国》,ISBN 7-80175-358-5),详细描写了在西藏高原,四川省等地的水干线。这本书34页上的一副参考地图呼吁建大量的水库(和更多大水坝)。在2006年,这本书被列为处于决策层的高干必读书。西藏未来的主要商业也许不是锡,不是木材,亦不是言或者其他任何矿藏,而是最重要的水。

Thomas H.Hahn/康奈尔

China's GDP and water management

A useful article, thank you for posting.

I wonder how China's annual GDP actually looks like factoring in (or out) those "huge amount[s] of money" (Wang Xiaoping) being spent on one of the very basic ingredients of human existence: water.

As an aside, in 2005/12 a somewhat polemical book was published in Chinese on how Tibetan waters will save China (Xizang zhi shui qiu Zhongguo, ISBN 7-80175-358-5), describing in great detail the western water trunk line between the Tibetan highlands, Sichuan province and beyond. A suggestive map on this book's page 34 calls for the construction of vast reservoirs (and more huge dams). The book was made required reading in 2006 for high-level cadres in policy and decision making positions. Tibet's future main commodity appears to be not tin or timber or salt or whatever else is mined there now, but, most importantly, water.

Thomas H. Hahn/Cornell

Default avatar
匿名 | Anonymous



Paying for services

This article provides a lot of good information, and is thought-provoking. I believe people need to pay for the ecosystem services they receive, instead of taking them for granted, or letting them deteriorate. For example, people living in big cities like Beijing should pay more for the water they use, which will make them more aware of the water crisis, and learn to conserve the resource. And the extra revenue could be used to pay farmers in neighboring area to encourage their act of "growing water."

Default avatar
匿名 | Anonymous



Decreasing water resources in Beijing

Water resources are seriously declining in Beijing, according to a survey on the local wetlands.

A veteran expert, who has been conducting studies in areas surrounding Beijing for more than a decade, said that sizes of local reservoirs and rivers are shrinking every day. The Wild Duck Lake is a good example as it is now half of its original size.

Increasing growth of clover poses a threat to the ecosystem of the lake and also affects the variety and number of birds and their migratory habits.

Default avatar
匿名 | Anonymous



Re: Paying for services

"people living in big cities like Beijing should pay more for the water they use" Maybe this would work in cities where everyone enjoys the same high standard of living, but in Beijing this would mean poor people unable to afford a basic resource necessary for survival.

Default avatar
匿名 | Anonymous



Water from the Tibetan Plateau

I think that this reasoning is already one of the justifications for the huge sums of money being spent on "ecological migration" to subsidize Tibetan herders who give up their herds and move to towns. I know certain INGOs support this policy.

One question that occurs to me, though, is why farmers in Hebei and many other parts of China are paid to adopt less destructive practices and protect forests, while herders in Tibetan areas are simply moved off their land. Could they also not become effective "stewards of the land?" In my experience, this may be entirely possible, at considerably less cost, and without creating unemployed households dependent on government poverty alleviation.