Ecological compensation, January 24, 2017
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Ecological compensation is a public mechanism aiming at the preservation of the ecological environment and the promotion of the harmonious development of man and nature. Employing measures at both governmental and market levels, it regulates interest-based relationships among ecological protection stakeholders on the basis of the value of ecosystem services, as well as the cost of ecological protection and that of development opportunities.

Broadly speaking, ecological compensation is not only about defraying costs and rewards for the conservation of ecosystems and natural resources as well as compensate for the losses that may arise from damage caused to these, but also about imposing a fine to those responsible for the pollution of the environment. In the narrow sense, the concept mainly refers to the first part, i.e. cost defrayal and compensation. Ecological compensation mainly covers the following aspects: compensation for ecosystem protection and recovery; internalization of economic externalities; economic compensation for given up development opportunities; increased protection for development priority zones of great ecological value.

Most of the impoverished areas in China, especially contiguous destitute areas, are located in natural reserves or limited development priority zones, which are crucial to the construction of an ecological civilization. During the progress of regional development and poverty relief, these areas have great responsibilities in terms of providing service value and ecological products to other areas. The direct inputcosts and opportunity costs that arise from giving up resource exploitation are enormous, which urgently calls for the establishment of a reasonable and scientific ecological compensation mechanism.

The National Program for Rural Poverty Alleviation (2011-2020) has come up with the following policy requirements to enhance ecological compensation: 1.Set up an ecological compensation mechanism, especially for relatively poor areas; 2. Increase compensation for development priority zones; 3. Attach more attention to biodiversity conservation in the poverty-stricken area.

It is clear that we still need to develop appropriate operational procedures to implement those requirements.