Does Eco-Compensation Alleviate Rural Poverty? New Evidence from National Key Ecological Function Areas in China

Abstract

The Transfer Payment Policy of National Key Ecological Functional Areas (TPEFAP), a well-known ecological compensation (eco-compensation) scheme in China, has been proposed by the government to alleviate ecological poverty and protect the environment. In literature, the effectiveness of the TPEFAP on environmental conservation has been widely examined, while few pay attention to the effect of the TPEFAP on poverty alleviation, especially with the consideration of its spatial spillovers as well. In this paper, we utilize panel data covering the key ecological functional areas of China during the period 2011–2018 to evaluate the impact of the TPEFAP on poverty alleviation and also its spatial spillovers by employing the synthetic control method (SCM) and the dynamic spatial Durbin model, respectively. Specifically, we apply the entropy weight method (EWM) to calculate the multidimensional poverty index (MPI) and measure pro-poor effect in terms of MPI change. The results show that: (1) TPEFAP has stable positive effects on MPI in Hubei, Yunnan, Jilin, Gansu, and Ningxia, while the impact on Qinghai fluctuates. (2) MPI presents a significant spatial correlation. Furthermore, both the direct and indirect effects of TPEFAP on MPI are significant and stable positive, for both short- or long-term. (3) For potential channels, rural non-farm employment, rural labor mobility, and agricultural productivity are the key pathways through which the TPEFAP can alleviate poverty both in local and adjacent provinces. However, it is difficult to find significant positive spatial spillovers for the TPEFAP if only the natural resources scale is considered. This study indicates that the government should pay attention to the policy expectations of ecological poverty alleviation and, in future eco-compensation, must further increase the coverage of subsidies and diversify the forms of subsidies.

Exploring the impacts of spatial regulation on environmentally sustainable development: A new perspective of quasi–experimental evaluation based on the National Key Ecological Function Zones in China

“…It further explores the coordinated development issues between regional environment and economy under spatial regulations. Unlike previous research that focused on the economic development of NKEFZ from the ecological compensation perspective (Miao & Zhao, 2019; Qin et al, 2022; Zhang & Li, 2015), this study directly examines the economic effects of NKEFZ, offering empirical evidence to support the pursuit of coordinated development between environmental protection and economic growth in NKEFZ.…”

“…It further explores the coordinated development issues between regional environment and economy under spatial regulations. Unlike previous research that focused on the economic development of NKEFZ from the ecological compensation perspective (Miao & Zhao, 2019;Qin et al, 2022;, this study directly examines the economic effects of NKEFZ, offering empirical evidence to support the pursuit of coordinated development between environmental protection and economic growth in NKEFZ. NMFZP stated that NKEFZ refers to areas that are ecologically fragile or important in terms of ecological functions (e.g., water conservation, soil conservation, wind and sand protection, and biodiversity maintenance), have low resource and environmental carrying capacity, and are unsuitable for large-scale and high-intensity industrialization and urbanization.…”

“…Some research has focused on testing the environmental and poverty reduction effects of NKEFZ from the perspective of ecological compensation and transfer payment. The research showed that ecological compensation to NKEFZ helped stimulate local governments' efforts, with a significant positive impact on improving environmental quality (Miao & Zhao, 2019; Zhang & Li, 2015), and poverty reduction by reducing income gaps and economic inequality, promoting employment, increasing ecological migration, and improving agricultural productivity (Qin et al, 2022).…”

Spatiotemporal Analysis of Ecosystem Status in China’s National Key Ecological Function Zones

“…Currently, there is a considerable body of research focusing on China's NKEFZ. However, the predominant focus of these studies lies in the analysis of transfer payments [13,14] and ecological compensation standards [12,15,16], operational mechanisms, and ecological effectiveness within these zones [17,18]. Furthermore, discussions revolve around topics such as ecological assessment criteria, existing issues, as well as the vulnerability and sensitivity of these ecologically significant areas [19].…”

“…They also put forth policy recommendations in their respective studies. Moreover, some scholars have undertaken analyses focusing on the socio-economic conditions of the NKEFZ, as well as exploring the poverty reduction effects associated with these areas [15,25].…”