Integrated Policy Solutions to

China’s Conservation Challenges

Douglas Whitehead

Global Environmental Institute

douglas@geichina.org

Major Conservation Challenges in ChinaMajor Conservation Challenges in China

•• Management of nature Management of nature reserves reserves

•• Public and Civil Society Public and Civil Society Participation Participation

•• Regulating environmental Regulating environmental behavior by enterprisesbehavior by enterprises

–– At the local levelAt the local level

–– OverseasOverseas

•• Mitigating impacts of Mitigating impacts of resource extraction on resource extraction on climate and biodiversityclimate and biodiversity

–– timber, mining, energytimber, mining, energy……

Challenge: China’s Nature Reserves

• Problems in the funding structure make managing the reserves difficult

• Improving policy environment for civil society

• Challenge 1: how to enhance management of the nature reserve without affecting community livelihoods and

enterprise activities?

•15% of China’s overall land area

•Activities, resource extraction from enterprises at the buffer zone pose threat to biodiversity in the nature reserve

Fengtongzhai Nature Reserve

• Significance

– Baoxing County, Ya’an Prefecture, Sichuan Province

– First record of Giant Pandas

– Other biodiversity

• Challenges

– Unitary Funding and Administration Structure

– Encroachment by communities at buffer zone (see red areas on map)

Conservation Incentive Agreements in

Baoxing

• Conservation Concession Agreement

– Pioneered by CI (Guyana, Peru)

– Land use concession, signed between protection org. and local communities

– Mechanism for allocating fundingfor conservation activities

• GEI: Conservation Incentive Agreements

– 2 Agreements signed in April 2007

• Nature Reserve (1,771 hec.)

• Farmers’ Cooperative

– CNY100,000 P&D fund with Baoxing Rural Credit Union

– Combines CCA with additional community development for CIA

CIA-Community Development

• Livelihood Programs

– Rabbit rearing

– Honey production

• Energy: Biogas (10m3, floating drum)

– Reducing firewood collection and combustion

– Reduction of emissions(23 million tons annually)

– Waste management

• Other Energy Solutions

– Biochar?

• Disaster Mitigation

• Enhancing Local Capacity

– Biogas maintenance teams

– Luyuan Farmer’s Cooperative

CIA Model

Incorporating PES into Project Model

• Hydropower in Baoxing

– 7 stations within the nature reserve, totaloutput 577,000KW

– Incl. Huaneng Hydro-electric, Sichuan Power

– Damage to biodiversity

• PES—Payments for Ecosystem Services

– Funds for ecosystem ser-vices (e.g. protection, clean water)

– Hydropower PES payments contribute to protection andcommunity development

• Policy Suggestion on CIA-PES

– SFA and NPC’s Environmentand Resources Protection Commission

CIA-PES: Refined Model

Conservation Actions

By communities

Benefits provided

Economic activities

Enterprises

Cons. & Develop. Fund

Conservation

Rights

Conservation Agreement

Between

Nature Reserve & GEI

PES

CIA

Conservation Agreement

Between GEI & Communities

PES

• Since early 2000s, guided byinst. like Exim bank

• US$40.65 of outbound Direct Investment Overseas

• Sectors: Timber, Hydropower, Plantations, Mining, Oil & Natural Gas

• Regions: SE Asia, Africa, Latin America

• China working to maintainImage as responsible super-power

• Challenge: How to ensure

best environmental impactoverseas?

Challenge: The “Go Out Strategy”

China’s FDI

OverallSource: OECD

By sector By Region (hydro) Source: GEI

Environmental Impact

Merowe Dam, Sudan:

China Int’l Water and Electric

Sedimentation, evaporation,

resettlement

Oil, GabonSinopec

Threat to 67,000 hectares

in Loango National Park

Nam Ngum 5, LaosSinohydro

Potential flooding damage on

forests, communities(under-construction)

Governing China’s Enterprises

• Domestic

– 2002 Environmental Impact Assessment Law(NPC), among many

– Market based instruments (DPS, EPBs, tax incentives, green credit, green insurance)

• Foreign

– 2007 Nine Principles on Encouraging and Standardizing Foreign Investment(State Council)

– 2007 Guidelines on Sustainable Management of OverseasForests by Chinese Enterprises(SFA, SEPA)

– 2008 Guide on Sustainable Overseas Silviculture by Chinese Enterprises (SFA, with GEI)

– 2009 Guide on Sustainable Overseas Forest Management and Utilization by Chinese Enterprises(SFA, MOFCOM, with GEI)

– 2009 Guidelines on Environmental Conduct by Overseas Chinese Enterprises(MEP, MOFCOM, with GEI)

Source: OECD

Challenges in Governance

• Improved legislative and enforcement capacity of

local (host country) governments

• Coordination between government departments

• Increased participation by civil society

• Assistance to local communities

• More systematic, market-based incentive

mechanisms

• Incentives for complying with laws

A Solution: Integrated Policy Package

• Policies: CCA, PES, EIA, CSR, REDD(?)

– EIA: incorporated into legislative process of host countries

– PES: Ecological services quantified, payments contributed through fund

– CCA: Allocates how PES payments would go towards conservation; land use concessions

– CSR: Voluntary tool, mounting domestic pressure

– REDD: “carbon credits” for reduced deforestation

• Advantages:

– Designed to address multiple stakeholders

– Community Development benefits

– Enhances civil society participation

Model 2: Guarantee Fund for

Community

Development and Environmental

Protection

Model 1:

Government-

NGO-

Enterprise Model

Pilot: Lao PDR

• Project:

– Lao China Cooperation Center (WREA, NLMA)

– Sustainable (market) management of Landand Natural Resources

– Incorporating PES into legislation

• Demonstration

– Sinohydro—Nam Ngum 5

– Enterprise buy-in for community development

– Renewable Energy (biogas)

REDD in IPP

• Concerns about REDD

– Lack of agreement on fossil fuels in Copenhagen

– Limited to tropical forests

– What about indigenous communities?

– Cannot be implementedeffectively w/o strong governance

– Philosophical problem:co-benefits?

• How can IPP help?

– Community participation through EIA, PES, CCA

– Improved bilateral governance

– Combines multiple market-based incentives

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Benefits of an Integrated-Policy

Approach

• Pilot project�policy advocacy

• Enhances relationship between

enterprises and local communities

• Greater role for Chinese civil

society in China’s international

cooperation

• Alleviates many of the concerns

regarding REDD

• Ideal balance between conservation

and development