Cost-effective compensation payments: A model based on Buying Green Cover to sustain ecological restoration

Compensation payment schemes play an important role in conservation efforts around the world, particularly for implementing agri-environmental policy. Unfortunately, huge investments such as those conducted in China under the Grain for Green Program (GGP) and elsewhere around the world have historically provided few long-term benefits. To design a cost-effective compensation policy for ecological restoration, the approach must integrate economic and ecological components. Here, we describe such a policy model ("Buying Green Cover") and compare it with an existing approach, the GGP, using data from China's Northern Shaanxi Province. The modified compensation program pays farmers to build terraced farmland or perform other "green" activities that will also sustain their livelihoods once the program ends. The resulting program costs 30% less than the GGP, and will take only 3 to 7 years to achieve the GGP's 16-year goal of converting sloping farmland into forests and grassland. In contrast with the failures of the GGP and related programs, the new approach improves the management and restoration of rapidly degrading landscapes and should be applicable both in China and around the world. (C) 2011 Elsevier B.V. All rights reserved.