Abstract

Title: The Application of a More Sustainable and Market-based Eco-compensation Mechanism in Lijiang

Authors: Lv Zhi¹, He Yi¹

Shan Shui Center for Nature and Society

Abstract: PES (Payment for Ecosystem Services), or Eco-compensation mechanism, has grasped the eye of policy makers and researchers in China today. Presently, the Fiscal Transfer Payment (FTP) is the most direct means for eco-compensation projects in China. Although the eco-compensation projects in China has made some preliminary achievements in the recent years, many issues still remain in this type of eco-compensation model that relies mainly on the government’s FTPs. This paper analyzed the advantages and disadvantages of FTP-based eco-compensation and then discussed the principles of market-based eco-compensation. Lastly, the Lijiang Lashi Lake has been chosen as the project site for the development of a case study so as to elaborate on how the market-based ecological compensation plans can be designed and implemented.