| The application of Ecological Compensation in Nature Reserves started quite early on but so far theoretical research on the subject lags far behind actual practice. With widespread use of scientific development concepts, ecological values and benefits are becoming gradually accepted by government and general public, and thereby increasing support for providing ecological compensation to the Nature Reserves.This thesis reviews both domestic and international studies about the accomplishments achieved in the application of ecological compensation, ecological benefits and values. In addition, it demonstrates the necessity and the fundamental methods of ecological compensation by applying the theory of environment al and natural capital, externality of ecosystem and public goods. It describes the importance of the ecosystem and poor socio-economic development status of study areas, and the impact of the establishment of Nature Reserves to the local residents.Naban River Watershed National Nature Reserve can be classified into three ecosystems. Ecological functions of the ecosystems have been identified, indicators and models for ecological valuation of Naban River Watershed National Nature Reserve have been developed and valuation carried out. The values of ecosystem services can be categorized into tangible and intangible values, and the tangible category can be further realized through market or non-market values. The paper sketches out a framework for establishing an ecological compensation mechanism in the research area under the guidance of government using market-based instruments to realize the values of ecosystem services. The major research results are as follows:â… ) The total value of the ecosystem services in the Naban River Watershed National Nature Reserve amounts to RMB 551.06 million, of which oxygen generation function is valued at RMB 275.28 million, watershed protection produces RMB 80.50 million, followed by the carbon sequestration (RMB 66.24 million), water purification (RMB 48.53 million), particles/dusts prevention (RMB 37.95 million), oil erosion control (RMB 21.31 million), biodiversity conservation (RMB 18.02 million), and air pollution control (RMB 2.76 million).â…¡) The ecological benefits of different land use options varies from natural forest at RMB 31223.51/ha-a, rubber plantation at. RMB 11165.86/ha-a, and farm land at RMB 2158.20/ha-a. Considering long term benefits, it's unwise to convert natural forest to cash crops (i.e. rubber in the case of Xishuangbanna) or farmland.â…¢) Based on valuation of the ecosystem services and results of previous research studies, a framework of ecological compensation mechanism for Naban River Watershed National Nature Reserve is proposed:the government should play a leading role supported by market-based instruments. The government should formulate policies and regulations as well as create favorable market conditions to apply ecological compensation on a large scale. Ecosystem services in mature markets should be promoted as market mechanisms have better advantages in regulating the services and helps in reducing the national fiscal burden.â…£) Among the types of public funding to be provided by government, a combination of cash and in-kind (material) compensation with technical assistance and policy support can be employed to transform the compensation mechanism from "blood-transfusion" type to "blood-regeneration" type of intervention. The type of market driven values lay more emphasis on carbon sequestration, watershed protection, and biodiversity conservation, it is recommended to move towards international markets for carbon sequestration, watershed protection and biodiversity offsets. Efforts should also be made to seek buyers in the domestic market.â…¤)To establish compensation standards, the government compensation accounts to RMB 33.09 million per annum; market-based compensation values covers a total of RMB 164.77 million, of which carbon market takes up RMB 66.24 million/a, hydrological market produces RMB 80.50 million/a, and biodiversity market generates RMB 18.02 million/a. |
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