Global Ecological Governance and Ecological Economy (Research Series on the Chinese Dream and China’s Development Path) 9811670242, 9789811670244

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Research Series on the Chinese Dream and China’s Development Path

Weiguo Zhang Fawen Yu   Editors

Global Ecological Governance and Ecological Economy

Research Series on the Chinese Dream and China’s Development Path Series Editors Yang Li, Chinese Academy of Social Sciences, Beijing, China Peilin Li, Chinese Academy of Social Sciences, Beijing, China

Drawing on a large body of empirical studies done over the last two decades, this Series provides its readers with in-depth analyses of the past and present and forecasts for the future course of China’s development. It contains the latest research results made by members of the Chinese Academy of Social Sciences. This series is an invaluable companion to every researcher who is trying to gain a deeper understanding of the development model, path and experience unique to China. Thanks to the adoption of Socialism with Chinese characteristics, and the implementation of comprehensive reform and opening-up, China has made tremendous achievements in areas such as political reform, economic development, and social construction, and is making great strides towards the realization of the Chinese dream of national rejuvenation. In addition to presenting a detailed account of many of these achievements, the authors also discuss what lessons other countries can learn from China’s experience. Project Director Shouguang Xie, President, Social Sciences Academic Press Academic Advisors Fang Cai, Peiyong Gao, Lin Li, Qiang Li, Huaide Ma, Jiahua Pan, Changhong Pei, Ye Qi, Lei Wang, Ming Wang, Yuyan Zhang, Yongnian Zheng, Hong Zhou

More information about this series at https://link.springer.com/bookseries/13571

Weiguo Zhang · Fawen Yu Editors

Global Ecological Governance and Ecological Economy

Editors Weiguo Zhang Institute of Economics of Shandong Academy of Social Sciences Jinan, Shandong, China

Fawen Yu Rural Development Institute Chinese Academy of Social Sciences Beijing, China

ISSN 2363-6866 ISSN 2363-6874 (electronic) Research Series on the Chinese Dream and China’s Development Path ISBN 978-981-16-7024-4 ISBN 978-981-16-7025-1 (eBook) https://doi.org/10.1007/978-981-16-7025-1 Jointly published with Social Sciences Academic Press The print edition is not for sale in China (Mainland). Customers from China (Mainland) please order the print book from: Social Sciences Academic Press. © Social Sciences Academic Press 2022 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publishers, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publishers nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publishers remain neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Singapore Pte Ltd. The registered company address is: 152 Beach Road, #21-01/04 Gateway East, Singapore 189721, Singapore

Series Preface

Since China’s reform and opening began in 1978, the country has come a long way on the path of Socialism with Chinese characteristics, under the leadership of the Communist Party of China. Over 30 years of reform, efforts and sustained spectacular economic growth have turned China into the world’s second-largest economy and wrought many profound changes in the Chinese society. These historically significant developments have been garnering increasing attention from scholars, governments, and the general public alike around the world since the 1990s, when the newest wave of China studies began to gather steam. Some of the hottest topics have included the so-called China miracle, Chinese phenomenon, Chinese experience, Chinese path, and the Chinese model. Homegrown researchers have soon followed suit. Already hugely productive, this vibrant field is putting out a large number of books each year, with Social Sciences Academic Press alone having published hundreds of titles on a wide range of subjects. Because most of these books have been written and published in Chinese, however, readership has been limited outside China—even among many who study China—for whom English is still the lingua franca. This language barrier has been an impediment to efforts by academia, business communities, and policy-makers in other countries to form a thorough understanding of contemporary China, of what is distinct about China’s past and present may mean not only for her future but also for the future of the world. The need to remove such an impediment is both real and urgent, and the Research Series on the Chinese Dream and China’s Development Path is my answer to the call. This series features some of the most notable achievements from the last 20 years by scholars in China in a variety of research topics related to reform and opening. They include both theoretical explorations and empirical studies and cover economy, society, politics, law, culture, and ecology, the six areas in which reform and opening policies have had the deepest impact and farthest-reaching consequences for the country. Authors for the series have also tried to articulate their visions of the “Chinese Dream” and how the country can realize it in these fields and beyond. All of the editors and authors for the Research Series on the Chinese Dream and China’s Development Path are both longtime students of reform and opening and v

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recognized authorities in their respective academic fields. Their credentials and expertise lend credibility to these books, each of which having been subject to a rigorous peer review process for inclusion in the series. As part of the Reform and Development Program under the State Administration of Press, Publication, Radio, Film, and Television of the People’s Republic of China, the series is published by Springer, a Germany-based academic publisher of international repute, and distributed overseas. I am confident that it will help fill a lacuna in studies of China in the era of reform and opening. Shouguang Xie

Foreword by Cai Fang

How are the studies of ecological economics conducted in the context of global ecological governance? This is an important issue at the frontier of the international ecological economy that deserves to be discussed. It is against this background that the Chinese Ecological Economics Society (CEES) is organizing the high-level forum with the theme of “Global Ecological Governance and Ecological Economic Studies”. There are many topics related to this theme, such as the ecological footprint, environmental issues, resource issues and population coordination, energy saving and emission reduction, circular economy, green development, sustainable development, etc. In recent years, various concepts have been put forward and studied in depth by the Chinese academic community, and the CEES has made great progress in the process. It should be noted that in the field of ecological economics, the Chinese scholars and policy-makers are never reluctant to fall behind, and they propose many cutting-edge concepts. One obvious example is that the CEES is the first ecological economics society in the world, and the Ecological Economy magazine is also the first professional journal published in the field of ecological economic studies. Since the 18th National Congress of the Communist Party of China, the CPC Central Committee has continued to carry out and stick to the construction of an ecological economy in the country and to put forward numerous new concepts. While systematically studying the spirit of General Secretary Xi Jinping’s series of speeches, we find that if in the past we utilized the resources and environment as a means and tool for guaranteeing sustainable economic development to some extent, now they have become the purpose of development. Gradually developing from “we want both economic growth and lucid waters and lush mountains” to “the lucid waters and lush mountains are invaluable assets”, our goal is not to protect the environment and resources for the sake of the GDP, but for the resources, environment and ecology, that is to say, the bluer sky, clearer water, and cleaner air are themselves the goals of our development. At the same time, the government also protects the ecology, resources, and environment as the basic public goods. This is a relatively advanced concept in the world. Ever since its establishment, the CEES has actively participated in the country’s construction of the ecological environment and has put forward many fruitful policy vii

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proposals. The Secretariat of the CEES is set at the Rural Development Institute, at the Chinese Academy of Social Sciences. Its affiliated Research Office of Ecological and Environmental Economics is the first institution in China to specialize in the studies of ecological economics and has achieved a series of socially influential results in this regard. In fact, the ecological issues, energy saving, and emission reduction that are being discussed had some misunderstandings in ideas and practice in the past, which placed our country under some international pressure. Today, the situation has changed considerably,and the ecological resources and the environment have gradually become part of the transformation of our model of economic development and an intrinsic requirement for the process of our economic development. There is no need to put us under pressure. Therefore, we should carefully learn and understand the relevant theory of General Secretary Xi Jinping on the purpose of development, “What is development for?”. This will help us to dig deeper into our study. Also, as the world’s second-largest economy, the results of China’s academic research should become more and more theoretical. We should design some major topics in the international academic community that are beneficial to the development of the subject, China and all mankind. We should not always focus on the topics of others and follow suit. The forum is hosted by the CEES, organized by the Efficient Ecological Economic Research Taishan Scholar Post of the Shandong Academy of Social Sciences and the Shandong Soft Science Research Base of Economic Situation Analysis and Forecasting, and is co-organized by the Editorial Board of the Ecological Economy and Binzhou Beihai Economic Development Zone, Shandong Province. It aims to discuss how to advance the studies of ecological economics in the context of the global ecological governance and provides a platform for experts to communicate with each other, thus becoming a pioneering initiative to combine practice and theory. The forum has also invited Professor Robert Costanza from the Australian National University, an internationally renowned ecological economist, as well as experts and professors from Kyushu University in Japan and the Korea Rural Economic Institute to give the special presentations. Cai Fang Vice-President, Chinese Academy of Social Sciences Beijing, China

Foreword by Zhang Shucun

Shandong, situated on the eastern coast, is one of the China’s largest provinces in terms of population, economy, and cultural resources. During a visit to Shandong not long ago, General Secretary Xi Jinping asked our province to be at the forefront of the country in the process of building a moderately prosperous society in all respects. In order to fulfill the General Secretary’s request, implement the “four comprehensive” strategy, promote the construction of Shandong as a well-developed economic and cultural province, and build a moderately prosperous society ahead of schedule, we must assume a great responsibility. The economy of Shandong is a classic excellence of the Chinese economy. Especially at this stage, Shandong is facing the problems of heavy economic structure, low level of development, and hard tasks of energy saving and emission reduction. According to the “five-sphere” integrated plan of economic, political, cultural, social, and ecological development proposed by the CPC Central Committee, in the new economic normal, to maintain the medium and high-speed development of the economy of Shandong and advance it toward the high-end levels, we must have the courage to face the important opportunities and challenges, be responsible, and provide solutions to the complex development proposition. The regional economic development of Shandong has formed a strategic pattern of “two regions, one circle and one belt”, including the Yellow River Delta Efficient Ecological Economic Zone, which is the first national strategy to be themed by the efficient ecological economic development. We need to carry out bold and comprehensive explorations in both theory and practice on how to be guided by the efficient ecological economy and dominate with high-end, high-quality, and high-efficiency industries. Shandong Academy of Social Sciences is a comprehensive social science research institution directly affiliated to the CPC Shandong Provincial Committee and the People’s Government of Shandong Province and committed to serving their scientific decision-making and the construction of Shandong as a well-developed economic and cultural province. It is currently working hard to implement the projects on social science innovation, build a new type of first-class socialist think tank, and play an exemplary and leading role in the process of forming a professional high-end ix

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think tank in our province. With respect to the studies on an ecological economy, the academy has the Efficient Ecological Economic Research Taishan Scholar Post, Shandong Ecological Economic Research Base, Key Discipline of Ecological Economics, Ecological Economy Research Office, and other research platforms, which are not only rare among the local social science academies, but also lay a solid foundation for improving the level of research on efficient ecological economics in our province. In 2014, entrusted by the Management Committee of the Binzhou Beihai Economic Development Zone, our academy completed the Efficient Ecological Port Research Project of International Agricultural Products Import and Export in Binzhou. The expert review panel was headed by Mr. Li Yadong, an academician from the Chinese Academy of Sciences and Tsinghua University, and the panel included experts from several units like the Provincial Party Committee Policy Research Office, the Provincial Government Research Office, the Provincial Development and Reform Commission, and the All-China Federation of Supply and Marketing Cooperatives. They spoke highly of this project and agreed that the project should be included in the plans of the country, Shandong Province and Binzhou City. Today, we are also going to inaugurate the “Efficient Ecological Economic Research Taishan Scholar Post of the Shandong Academy of Social Sciences (Academician) Office”. In response to the global ecological crisis, we need to come up with various solutions for an effective ecological governance as soon as possible. This forum, with the theme of “Global Ecological Governance and Ecological Economic Studies”, has the distinctive nature of the times and a practical purposefulness. We believe that this forum will have a positive impact on the sustainable development of the economy of Shandong Province and on the deepening of studies at the frontier of the ecological economy by the international ecological economics community. Zhang Shucun President, Shandong Academy of Social Sciences Shanghai, China

Contents

1

Creating a Sustainable and Desirable Future . . . . . . . . . . . . . . . . . . . . Robert Costanza

2

Estimation of Ecological Values on Environment-Friendly Agricultural Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mitsuyasu Yabe

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Progress in China’s Rural Ecological Governance . . . . . . . . . . . . . . . . Zhou Li

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On the Transformation of the Growth Concept: Towards a Steady State Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Jiahua Pan

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Theoretical Foundations of Efficient Ecological Economic Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Weiguo Zhang

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Resource and Environmental Situations and Policy Options of Rural Ecological Governance in China . . . . . . . . . . . . . . . . . . . . . . . . Fawen Yu

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39

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Study on the Simulation Model of the System Dynamics of Urban Comprehensive Carrying Capacity . . . . . . . . . . . . . . . . . . . . . 111 Wenlong Li

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Construction and Practice of the Mechanism for Public Participation for Ecological Civilization Construction Based on the TAM Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Shuai Zhai

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Study on the Ecological Footprint of Tourism in the Beijing Jiufeng National Forest Park Based on the Component Method . . . . 141 Ying Zhang, Jing Pan, and Ke Chen

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10 Study on the EKC Characteristics of Regional Industrial Pollution Emissions in an Open Economic Environment . . . . . . . . . . 157 Guimei Zhao, Lizhen Chen, and Huaping Sun 11 Study on the Ecological Capital Investment Against the Background of Ecological Governance . . . . . . . . . . . . . . . . . . . . . . . 169 Xun Yang, Congrui Qu, and Yuanjian Deng 12 Altruistic Cooperative Governance of Common Resources and Its Institutional Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 Sheng Li and Chungen Li 13 Analysis of the Efficiency of Forestry Production and Convergence in China’s Four Major Forest Areas Based on the Perspective of Carbon Sequestration Benefits . . . . . . . . . . . . . . 195 Longfei Xue, Xiaofeng Luo, and Xianrong Wu

Chapter 1

Creating a Sustainable and Desirable Future Robert Costanza

Abstract This chapter describes what an “ecological economy” embedded in an “ecological civilization” could look like and how we could get there. We believe that this future can provide full employment and a high quality of life for everyone into the indefinite future while staying within the safe environmental operating space for humanity on earth. This is consistent with the new UN Sustainable Development Goals. To get there, we need to stabilize population more equitably share resources, income, and work invest in the natural and social capital commons reform the financial system to better reflect real assets and liabilities create better measures of progress reform tax systems to tax “bads” rather than goods promote technological innovations that support well-being rather than material growth, and create a culture of well-being rather than consumption. Several lines of evidence show that these policies are mutually supportive and the resulting system is feasible. The substantial challenge is making the transition to this better world in a peaceful and positive way. There is no way to predict the exact path this transition might take, but painting this picture of a possible end-point and some milestones along the way will help make this choice and this journey a more viable option.

The current mainstream model of the global economy is based on a number of assumptions about the way the world works, what the economy is, and what the economy is for (see Table 1.1). These assumptions arose in an earlier period, when the world was relatively empty of humans and their artifacts. Built capital was the limiting factor, while natural capital was abundant. It made sense not to worry too much about environmental “externalities”, since they could be assumed to be relatively small and ultimately solvable. It also made sense to focus on the growth of the market economy, as measured by gross domestic product (GDP), as a primary means to improve human welfare. And it made sense to think of the economy as only marketed goods

R. Costanza (B) Public Policy, Crawford School of Public Policy Australian National University, Canberra, Australia © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_1

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Table 1.1 The basic characteristics of the current economic model, the green economy model, and the ecological economics model Current economic model

Green economy model Ecological economics model

Primary policy goal

More: Economic growth in the conventional sense, as measured by GDP. The assumption is that growth will ultimately allow the solution of all other problems. More is always better

More but with lower environmental impact: GDP growth decoupled from carbon and from other material and energy impacts

Better: Focus must shift from merely growth to “development” in the real sense of improvement in sustainable human well-being, recognizing that growth has significant negative by-products

Primary measure of progress

GDP

Still GDP, but recognizing impacts on natural capital

Index of Sustainable Economic Welfare (ISEW), Genuine Progress Indicator (GPI), or other improved measures of real welfare

Scale/carrying capacity/role of environment

Not an issue, since markets are assumed to be able to overcome any resource limits via new technology, and substitutes for resources are always available

Recognized, but assumed to be solvable via decoupling. A primary concern as a determinant of ecological sustainability

Natural capital and ecosystem services are not infinitely substitutable and real limits exist

Distribution/poverty

Given lip service, but relegated to “politics “and a “trickle-down “policy: a rising tide lifts all boats

Recognized as important, assumes greening the economy will reduce poverty via enhanced agriculture and employment in green sectors

A primary concern, since it directly affects quality of life and social capital and is often exacerbated by growth: a too rapidly rising tide only lifts yachts, while swamping small boats

Economic efficiency / allocation

The primary concern, but generally including only marketed goods and services (GDP) and market institutions

Recognized to include natural capital and the need to incorporate the value of natural capital into market incentives

A primary concern, but including both market and nonmarket goods and services, and effects. Emphasis on the need to incorporate the value of natural and social capital to achieve true allocative efficiency (continued)

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Table 1.1 (continued) Current economic model

Green economy model Ecological economics model

Property rights

Emphasis on private property and conventional markets

Recognition of the need for instruments beyond the market

Emphasis on a balance of property rights regimes appropriate to the nature and scale of the system, and a linking of rights with responsibilities. Includes larger role for common-property institutions

Role of government

Government intervention to be minimized and replaced with private and market institutions

Recognition of the need for government intervention to internalize natural capital

Government plays a central role, including new functions as referee, facilitator, and broker in a new suite of common-asset institutions

Principles of governance

Laissez—faire market capitalism

Recognition of the need for government

Lisbon principles of sustainable governance

and services and to think of the goal as increasing the amount of these that were produced and consumed (Costanza et al. 2013a, b).1 Now, however, we live in a radically different world—one that is relatively full of humans and their built capital infrastructure. We need to reconceptualize what the economy is and what it is for. We have to first remember that the goal of any economy should be to sustainably improve human well-being and quality of life and that material consumption and GDP are merely means to that end. We have to recognize, as both ancient wisdom and new psychological research tell us, that too much of a focus on material consumption can actually reduce human well-being. We have to understand better what really does contribute to sustainable human wellbeing and recognize the substantial contributions of natural and social capital, which are now the limiting factors to improving well-being in many countries. We have to be able to distinguish between real poverty, in terms of low quality of life, and low monetary income. Ultimately we have to create a new model of the economy that acknowledges this new “full world” context and vision (Kasser 2002).

This chapter is adapted from a report commissioned by the United Nations for the 2012 Rio + 20 Conference as part of the Sustainable Development in the twenty-first century proJect see R. Costanza et al., Building a Sustainable and Desirable Economy-in-Society-in-Nature (New York: United Nations Division for Sustainable Development, 2012) and from a shorter version published as Chapter 11, pp. 126–142. In: State of the World 2013: Is Sustainability Still Possible? Island Press. Washington, D. C. 1

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Some people argue that relatively minor adjustments to the current economic model will produce the desired results. For example, they maintain that by adequately pricing the depletion of natural capital (such as putting a price on carbon emissions) we can address many of the problems of the current economy while still allowing growth to continue. This approach can be called the “green economy” model. Some of the areas of intervention promoted by its advocates, such as investing in natural capital, are necessary and should be pursued. But they are not sufficient to achieve sustainable human well-being. We need a more fundamental change, a change of our goals and paradigm (Easterlin 2003; Layard 2005). Both the shortcomings and the critics of the current model are abundant—and many of them are described in this book. A coherent and viable alternative is sorely needed. This chapter aims to sketch a framework for a new model of the economy based on the worldview and following principles of ecological economics (Costanza 1991; Daly and Farley 2004; Costanza et al. 2013): • Our material economy is embedded in society, which is embedded in our ecological life-support system, and we cannot understand or manage our economy without understanding the whole interconnected system. • Growth and development are not always linked, and true development must be defined in terms of the improvement of sustainable human well-being, not merely improvement in material consumption. • A balance of four basic types of assets is necessary for sustainable human wellbeing: built, human, social, and natural capital (financial capital is merely a marker for real capital and must be managed as such). • Growth in material consumption is ultimately unsustainable because of fundamental planetary boundaries, and such growth is or eventually becomes counterproductive (uneconomic) in that it has negative effects on well-being and on social and natural capital. There is a substantial and growing body of new research on what actually contributes to human well-being and quality of life. Although there is still much ongoing debate, this new science clearly demonstrates the limits of conventional economic income and consumption’s contribution to well-being. For example, economist Richard Easterlin has shown that wellbeing tends to correlate well with health, level of education, and marital status and shows sharply diminishing returns to income beyond a fairly low threshold. Economist Richard Layard argues that current economic policies are not improving well-being and happiness and that “happiness should become the goal of policy, and the progress of national happiness should be measured and analyzed as closely as the growth of GNP (gross national product)” (Easterlin 2003; Layard 2005). In fact, if we want to assess the “real” economy—all the things that contribute to real, sustainable, human well-being—as opposed to only the “market” economy, we have to measure and include the nonmarketed contributions to human well-being from nature, from family, friends, and other social relationships at many scales, and from health and education. Doing so often yields a very different picture of the state of well-being than may be implied by growth in per capita GDP. Surveys, for

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Fig. 1.1 Happiness and real income in the United States, 1972–2008. Source Hernández-Murillo and Martinek (2010)

instance, have found people’s life satisfaction to be relatively flat in the United States (see Fig. 1.1) and many other industrial countries since about 1975, in spite of a near doubling in per capita income (Hernández-Murillo and Martinek 2010). A second approach is an aggregate measure of the real economy that has been developed as an alternative to GDP, called the Index of Sustainable Economic WellBeing, or a variation called the Genuine Progress Indicator (GPI). The GPI attempts to correct for the many shortcomings of GDP as a measure of true human well-being. For example, GDP is not just limited—measuring only marketed economic activity or gross income—it also counts all activity as positive. It does not separate desirable, well-being-enhancing activity from undesirable, well-being-reducing activity. An oil spill increases GDP because someone has to clean it up, but it obviously detracts from society’s well-being. From the perspective of GDP, more crime, sickness, war, pollution, fires, storms, and pestilence are all potentially good things because they can increase marketed activity in the economy (Lawn 2003; Costanza et al. 2009, 2014; Kubiszewski et al. 2013). GDP also leaves out many things that actually do enhance well-being but that are outside the market, such as the unpaid work of parents caring for their children at home or the nonmarketed work of natural capital in providing clean air and water, food, natural resources, and other ecosystem services. And GDP takes no account of the distribution of income among individuals, even though it is well known that an additional dollar of income produces more well-being if a person is poor rather than rich. The GPI addresses these problems by separating the positive from the negative components of marketed economic activity, adding in estimates of the value of nonmarketed goods and services provided by natural, human, and social capital and adjusting for income-distribution effects. Comparing GDP and GPI for the United States, Fig. 1.2 shows that while GDP has steadily increased since 1950, with the

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R. Costanza

Fig. 1.2 Gross Domestic Product and Genuine Progress Indicator, United States, 1950–2004. Source Talberth et al. (2007)

occasional dip or recession, the GPI peaked in about 1975 and has been flat or gradually decreasing ever since. The United States and several other industrial countries are now in a period of what might be called uneconomic growth, in which further growth in marketed economic activity (GDP) is actually reducing well-being, on balance, rather than enhancing it (Talberth et al. 2007). A new model of the economy consistent with our new full-world context would be based clearly on the goal of sustainable human well-being. It would use measures of progress that openly acknowledge this goal (for example, GPI instead of GDP). It would acknowledge the importance of ecological sustainability, social fairness, and real economic efficiency. One way to interrelate the goals of the new economy is by combining planetary boundaries as the “environmental ceiling” with basic human needs as the “social foundation”. This creates an environmentally sustainable, socially desirable and just space within which humanity can thrive (Raworth 2012).

1.1 A Framework for a New Economy A report prepared for the United Nations Rio + 20 Conference described in detail what a new economy-in-society-in-nature might look like. A number of other groups—for example, the Great Transition initiative and the Future We Want—have performed similar exercises. All are meant to reflect the essential broad features of a better, more-sustainable world, but it is unlikely that any particular one of these will emerge wholly intact from efforts to reach that goal. For that reason, and because of space limitations, those visions will not be described here. This chapter instead lays out the changes in policy, governance, and institutional design that are needed in order to achieve any of these sustainable and desirable futures (Raskin et al. 2002; Costanza et al. 2013).

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The key to achieving sustainable governance in the new, full-world context is an integrated approach—across disciplines, stakeholder groups, and generations— whereby policymaking is an iterative experiment acknowledging uncertainty, rather than a static “answer”. Within this paradigm, six core principles—known as the Lisbon Principles Following a 1997 conference in Lisbon and originally developed for sustainable governance of the oceans—embody the essential criteria for sustainable governance and the use of common natural and social capital assets (Costanza et al. 1998): 1.

2.

3.

4.

5.

6.

Responsibility. Access to common asset resources carries attendant responsibilities to use them in an ecologically sustainable, economically efficient, and socially fair manner. Individual and corporate responsibilities and incentives should be aligned with each other and with broad social and ecological goals. Scale-matching. Problems of managing natural and social capital assets are rarely confined to a single scale. Decisionmaking should be assigned to institutional levels that maximize ecological input, ensure the flow of information between institutional levels, take ownership and actors into account, and internalize social costs and benefits. Appropriate scales of governance will be those that have the most relevant information, can respond quickly and efficiently, and are able to integrate across scale boundaries. Precaution. In the face of uncertainty about potentially irreversible impacts on natural and social capital assets, decisions concerning their use should err on the side of caution. The burden of proof should shift to those whose activities potentially damage natural and social capital. Adaptive management. Given that some level of uncertainty always exists in common asset management, decision-makers should continuously gather and integrate appropriate ecological, social, and economic information with the goal of adaptive improvement. Full-cost allocation. All of the internal and external costs and benefits, including social and ecological, of alternative decisions concerning the use of natural and social capital should be identified and allocated, to the extent possible. When appropriate, markets should be adjusted to reflect full costs. Participation. All stakeholders should be engaged in the formulation and implementation of decisions concerning natural and social capital assets. Full stakeholder awareness and participation contributes to credible, accepted rules that identify and assign the corresponding responsibilities appropriately.

This section describes examples of worldviews, institutions and institutional instruments, and technologies that can help the world move toward the new economic paradigm (Beddoe et al. 2009).

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1.2 Respecting Ecological Limits Once society has accepted the worldview that the economic system is sustained and contained by our finite global ecosystem, it becomes obvious that we must respect ecological limits. This requires that we understand precisely what these limits entail and where economic activity currently stands in relation to them. A key category of ecological limit is dangerous waste emissions, including nuclear waste, particulates, toxic chemicals, heavy metals, greenhouse gases (GHGs), and excess nutrients. The poster child for dangerous wastes is greenhouse gases, as excessive stocks of them in the atmosphere are disrupting the climate. Since most of the energy currently used for economic production comes from fossil fuels, economic activity inevitably generates flows of GHGs into the atmosphere. Ecosystem processes such as plant growth, soil formation, and dissolution of carbon dioxide (CO2 ) in the ocean can sequester CO2 from the atmosphere. But when flows into the atmosphere exceed flows out of the atmosphere, atmospheric stocks accumulate. This represents a critical ecological threshold, and exceeding it risks runaway climate change with disastrous consequences. At a minimum, then, for any type of waste where accumulated stocks are the main problem, emissions must be reduced below absorption capacity. Current atmospheric CO2 stocks are well over 390 parts per million, and there is already clear evidence of global climate change in current weather patterns. Moreover, the oceans are beginning to acidify as they sequester more CO2 . Acidification threatens the numerous forms of oceanic life that form carbon-based shells or skeletons, such as mollusks, corals, and diatoms. In short, the weight of evidence suggests that we have already exceeded the critical ecological threshold for atmospheric GHG stocks. This means that we must reduce flows by more than 80% or increase sequestration until atmospheric stocks are reduced to acceptable levels. If we accept that all individuals are entitled to an equal share of CO2 absorption capacity, then the wealthy nations need to reduce net emissions by 95% or more (Costanza et al. 2006; International Panel on Climate Change (IPCC) 2007). Another category of ecological limit entails renewable-resource stocks, flows, and services. All economic production requires the transformation of raw materials provided by nature, including renewable resources (for example, trees). To a large extent, society can choose the rate at which it harvests these raw materials—that is, cuts down trees. Whenever extraction rates of renewable resources exceed their regeneration rates, however, stocks decline. Eventually, the stock of trees (the forest) will no longer be able to regenerate. So the first rule for renewable-resource stocks is that extraction rates must not exceed regeneration rates, thus maintaining the stocks to provide appropriate levels of raw materials at an acceptable cost. But a forest is not just a warehouse of trees it is an ecosystem that generates critical services, including life support for its inhabitants. These services are diminished when the structure is depleted or its configuration is changed. So another rule guiding resource extraction and land use conversion is that they must not threaten the capacity of the ecosystem stock or fund to provide essential services. Our limited understanding of ecosystem structure and function and the dynamic nature of ecological and economic systems

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mean that this precise point may be difficult to determine. However, it is increasingly obvious that the extraction of many resources to drive growth has already gone far beyond this point. Rates of resource extraction must therefore be reduced to below regeneration rates in order to restore ecosystem funds to desirable levels. Protecting Capabilities for Flourishing. In a zero-growth or contracting economy, working-time policies that enable equitable sharing of the available work are essential to achieve economic stability and to protect people’s jobs and livelihoods. Reduced working hours can also increase people’s ability to flourish by improving the work/life balance, and there is evidence that working fewer hours can reduce consumption -related environmental impacts. Specific policies should include greater choice for employees about working time measures to combat discrimination against part-time work as regards grading, promotion, training, security of employment, rate of pay, health insurance, and so on and better incentives to employees (and flexibility for employers) for family time, parental leave, and sabbatical breaks (Schor 2005; Jackson 2009). Systemic social inequality can likewise undermine the capacity to flourish. It expresses itself in many forms besides income inequality, such as life expectancy, poverty, malnourishment, and infant mortality. Inequality can also drive other social problems (such as overconsumption), increase anxiety, undermine social capital, and expose lower-income households to higher morbidity and lower life satisfaction (Acemoglu and Robinson 2009). The degree of inequality varies widely from one sector or country to another. In the U. S. civil service, military, and university sectors, for example, income inequality ranges within a factor of 15 or 20 between the highest and lowest paying jobs. Corporate America has a range of 500 or more. Many industrial nations are below 25 (Daly 2010). A sense of community—which is necessary for democracy—is hard to maintain across such vast income differences. The main justification for such differences has been that they stimulate growth, which will one day filter down, making everyone rich. But in today’s full world, with its steady state or contracting economy, this is unrealistic. And without aggregate growth, poverty reduction requires redistribution. Fair limits to the range of inequality need to be determined—that is, a minimum and a maximum income. Studies have shown that most adults would be willing to give up personal gain in return for reducing inequality they see as unfair. Redistributive mechanisms and policies could include revising income tax structures, improving access to high-quality education, introducing anti-discrimination legislation, implementing anti-crime measures and improving the local environment in deprived areas, and addressing the impact of immigration on urban and rural poverty. New forms of cooperative ownership (as in the Mondragón model) or public ownership, as is common in many European nations, can also help lower internal pay ratios (Fehr and Falk 2002). The dominance of markets and property rights in allocating resources also can impair communities’ capacity to flourish. Private property rights are established when resources can be made “excludable”—that is, when one person or group can use a resource while denying access to others. But many resources essential to human welfare are “non-excludable”, meaning that it is difficult or impossible to exclude

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others from access to them. Examples include oceanic fisheries, timber from unprotected forests, and numerous ecosystem services, including waste absorption capacity for unregulated pollutants. Absent property rights, resources are “open access”— anyone may use them, whether or not they pay. However, individual owners of property rights are likely to overexploit or underprovide the resource, imposing costs on others, which is unsustainable, unjust, and inefficient. Private property rights also favor the conversion of ecosystem stocks into market products regardless of the difference in contributions that ecosystems and market products have to human welfare. The incentives are to privatize benefits and socialize costs. One solution to these problems, at least for some resources, is common ownership. A commons sector, separate from the public or private sector, can hold property rights to resources created by nature or society as a whole and manage them for the equal benefit of all citizens, present and future. Contrary to wide belief, the misleadingly labeled “tragedy of the commons” results from no ownership or open access to resources, not common ownership. Abundant research shows that resources owned in common can be effectively managed through collective institutions that assure cooperative compliance with established rules (Hardin 1968; Pell 1989; Feeny et al. 1990; Ostrom 1990). Finally, flourishing communities will be supported and maintained by the social capital built by a strong democracy. A strong democracy is most easily understood at the level of community governance, where all citizens are free (and expected) to participate in all political decisions affecting the community. Broad participation requires the removal of distorting influences like special interest lobbying and funding of political campaigns. The process itself helps to satisfy myriad human needs, such as enhancing people’s understanding of relevant issues, affirming their sense of belonging and commitment to the community, offering opportunity for expression and cooperation, and strengthening the sense of rights and responsibilities. Historical examples (though participation was restricted to elites) include the town meetings of New England and the system of ancient Athenians (Prugh et al. 2000; Farley and Costanza 2002).

1.3 Building a Sustainable Macroeconomy The central focus of macroeconomic policies is typically to maximize economic growth lesser goals include price stabilization and full employment. If society instead adopts the central economic goal of sustainable human well-being, macroeconomic policy will change radically. The goals will be to create an economy that offers meaningful employment to all and that balances investments across the four types of capital to maximize well-being. Such an approach would lead to fundamentally different macroeconomic policies and rules. A key leverage point is the current monetary system, which is inherently unsustainable. Most of the money supply is a result of what is known as fractional reserve banking. Banks are required by law to retain a percentage of every deposit they receive the rest they loan at interest.

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However, loans are then deposited in other banks, which in turn can lend out all but the reserve requirement. The net result is that the new money issued by banks, plus the initial deposit, will be equal to the initial deposit divided by the fractional reserve. For example, if a government credits MYM1 million to a bank and the fractional reserve requirement is 10%, banks can create MYM9 million in new money, for a total money supply of MYM10 million. In this way, most money is today created as interest-bearing debt. Total debt in the United States—adding together consumers, businesses, and the government—is about MYM50 trillion. This is the source of the national money supply (Daly 2010; Speth 2012). There are several serious problems with this system. First, it is highly destabilizing. When the economy is booming, banks will be eager to loan money and investors will be eager to borrow, which leads to a rapid increase in money supply. This stimulates further growth, encouraging more lending and borrowing, in a positive feedback loop. Abooming economy stimulates firms and households to take on more debt relative to the income flows they use to repay the loans. This means that any slowdown in the economy makes it very difficult for borrowers to meet their debt obligations. Eventually some borrowers are forced to default. Widespread default eventually creates a self-reinforcing downward economic spiral, leading to recession or worse. Second, the current system steadily transfers resources to the financial sector. Borrowers must always pay back more than they borrowed. At 5.5% interest, homeowners will be forced to pay back twice what they borrowed on a 30-year mortgage. Conservatively speaking, interest on the MYM50 trillion total debt (in 2009) of the United States must be at least MYM2.5 trillion a year, one sixth of national output.2 Third, the banking system will only create money to finance market activities that can generate the revenue required to repay the debt plus interest. Since the banking system currently creates far more money than the government, this system prioritizes investments in market goods over public goods, regardless of the relative rates of return to human well-being. Fourth, and most important, the system is ecologically unsustainable. Debt, which is a claim on future production, grows exponentially, obeying the abstract laws of mathematics. Future production, in contrast, confronts ecological limits and cannot possibly keep pace. Interest rates exceed economic growth rates even in good times. Eventually, the exponentially increasing debt must exceed the value of current real wealth and potential future wealth, and the system collapses. To address this problem, the public sector must reclaim the power to create money, a constitutional right in the United States and most other countries, and at the same time take away from the banks the right to do so by gradually moving toward 100percent fractional-reserve requirements. A second key lever for macroeconomic reform is tax policy. Conventional economists generally look at taxes as a necessary but significant drag on economic growth. However, taxes are an effective tool 2

Total debt from “Z. 1 Statistical Release”, Board of Governors of the Federal Reserve System, at www. federalreserve. gov / datadownload / Download. aspx? rel = Z1&series = 654245a7abac051cc4a 9060c911e1fa4&filetype = csv&label = include&layout = seriescolumn&from = 01 / 01 / 1945&to = 12 / 31 / 2010.

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for internalizing negative externalities into market prices and for improving income distribution. A shift in the burden of taxation from value added (economic “goods”, such as income earned by labor and capital) to throughput flow (ecological “bads”, such as resource extraction and pollution) is critical for shifting toward sustainability. Such a reform would internalize external costs, thus increasing efficiency. Taxing the origin and narrowest point in the throughput flow—for example, oil wells rather than sources of CO2 emissions—induces more-efficient resource use in production as well as consumption and facilitates monitoring and collection. Such taxes could be introduced in a revenue-neutral way, for example by phasing in resource severance taxes while phasing out regressive taxes such as those on payrolls or sales (Daly 2008, 2010). Taxes should also be used to capture unearned income (rent, in economic parlance). Green taxes are a form of rent capture, since they charge for the private use of resources created by nature. But there are many other sources of unearned income in society. For example, if a government builds a light rail or subway system—moresustainable alternatives to private cars—adjacent land values typically skyrocket, providing a windfall profit for landowners. New technologies also increase the value of land, due to its role as an essential input into all production. Because the supply of land is fixed, any increase in demand results in an increase in price. Landowners therefore automatically grow wealthier independent of any investments in the land. High taxes on land values (but not on improvements, such as buildings) allow the public sector to capture this unearned income. Public ownership through land trusts and other means also allows for public capture of the unearned income and eliminates any reward from land speculation, thus stabilizing the economy (Gaffney 2009).

1.4 Tax Policy Can also be Used to Reduce Income Inequality (see Fig. 1.3). Taxing the highest incomes at high marginal rates has been shown to significantly reduce income inequality. There is also a strong correlation between tax rates and social justice (see Fig. 1.4). High tax rates that contribute to income equality appear to be closely related to human well-being. This suggests that tax rates should be highly progressive, perhaps asymptotically approaching 100% on marginal income. The measure of tax justice should not be how much is taxed away but rather how much income remains after taxes. For example, hedge fund manager John Paulson earned MYM4.9 billion in 2010. If Paulson had to pay a flat tax of 99%, he would still retain nearly MYM1 million per week in income (Wilkinson and Pickett 2009; Goldstein 2011). Other policies for achieving financial and fiscal prudence will almost certainly be required as well. Our relentless pursuit of debt-driven growth has contributed to the global economic crisis. A new era of financial and fiscal prudence needs to increase the regulation of national and international financial markets incentivize domestic

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Fig. 1.3 Relationship between Income Inequality and social problems score in selected industrial countries. Source Wilkinson and Pickett (2009)

Fig. 1.4 Relationship between tax revenue as a percent of GDP and index of social justice in selected industrial countries. Source OECD Wilkinson and Pickett (2009)

savings, for example through secure (green) national or community-based bonds outlaw unscrupulous and destabilizing market practices (such as “short selling”, in which borrowed securities are sold with the intention of repurchasing them later at a lower price) and provide greater protection against consumer debt. Governments must pass laws that restrict the size of financial sector institutions, eliminating any that impose systemic risks for the economy (Jackson 2009). Finally, as indicated earlier, we need to improve macroeconomic accounting, replacing or supplementing GDP as the prime economic indicator. GDP does,

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however, belong as an indicator of economic efficiency. The more efficient we are, the less economic activity, raw materials, energy, and work are required to provide satisfying lives. When GDP rises faster than life satisfaction, efficiency declines. The goal should be to minimize GDP, subject to maintaining a high and sustainable quality of life. Is a Sustainable Civilization Possible? The brief sketch presented here of a sustainable and desirable “ecological economy”, along with some of the policies required to achieve it, begs the important question of whether these policies taken together are consistent and whether they are sufficient to achieve the goals articulated. Can we have a global economy that is not growing in material terms but that is sustainable and provides a high quality of life for most, if not all, people? Several lines of evidence suggest that the answer is yes. The first comes from history. Achieving long-lasting zero-or low-growth desirable societies has been difficult— but not unheard of. While many societies have collapsed in the past and many of them were not what would be called “desirable”, there have been a few successful historical cases in which decline did not occur, as these examples indicate (Weiss and Bradley 2001; Diamond 2005; Costanza et al. 2007): • Tikopia Islanders have maintained a sustainable food supply and nonincreasing population with a bottom-up social organization. • New Guinea features a silviculture system that is more than 7000 years old with an extremely democratic, bottom-up decisionmaking structure. • Japan’s top-down forest and population policies in the Tokugawa era arose as a response to an environmental and population crisis, bringing an era of stable population, peace, and prosperity. A second line of evidence comes from the many groups and communities around the world that are involved in building a new economic vision and testing solutions. Here are a few examples: • • • • • • • •

Transition Initiative movement (www.transitionnetwork.org) Global EcoVillage Network (www.gen.ecovillage.org) Co-Housing Network (www.cohousing.org/) Wiser Earth (www.wiserearth.org) Sustainable Cities International (www.sustainablecities.net) Center for a New American Dream (www.newdream.org) Democracy Collaborative (www.community-wealth.org) Portland, Oregon, Bureau of Planning and Sustainability (www.portlandonline. com/bps/)

All these examples to some extent embody the vision, worldview, and policies elaborated in this chapter. Their experiences collectively provide evidence that the policies are feasible at a smaller scale. The challenge is to scale up some of these models to society as a whole. Several cities, states, regions, and countries have made significant progress along that path, including Portland in Oregon Stockholm and Malm in Sweden London the states of Vermont, Washington, and Oregon in the United States Germany Sweden Iceland Denmark Costa Rica and Bhutan (Kristinsdottir 2010; Rolfsdotter-Jansson 2010).

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A third line of evidence for the feasibility of this vision is based on integrated modeling studies that suggest a sustainable, non-growing economy is both possible and desirable. These include studies using such well-established models as World 3, the subject of The Limits to Growth in 1972 and other more recent books, and the Global Unified Metamodel of the BiOsphere (GUMBO) (Meadows et al. 1972; Boumans et al. 2002). A recent addition to this suite of modeling tools is LowGrow, a model of the Canadian economy that has been used to assess the possibility of constructing an economy that is not growing in GDP terms but that is stable, with high employment, low carbon emissions, and a high quality of life. LowGrow was explicitly constructed as a fairly conventional macroeconomic model calibrated for the Canadian economy, with added features to simulate the effects on natural and social capital (Victor and Rosenbluth 2007; Victor 2008). LowGrow includes features that are particularly relevant for exploring a low/no-growth economy, such as emissions of carbon dioxide and other greenhouse gases, a carbon tax, a forestry submodel, and provisions for redistributing incomes. It measures poverty using the Human Poverty Index of the United Nations. LowGrow allows additional funds to be spent on health care and on programs for reducing adult illiteracy and estimates their impacts on longevity and adult literacy. A wide range of low-and no-growth scenarios can be examined with LowGrow, and some (including the one shown in Fig. 1.5) offer considerable promise. Compared with the business-as-usual scenario, in this scenario GDP per capita grows more slowly, leveling off around 2028, at which time the rate of unemployment is 5.7%. The unemployment rate declines to 4% by 2035. By 2020 the poverty index declines from 10.7 to an internationally unprecedented level of 4.9, where it remains, and the debt-to-GDP ratio declines to about 30% and is maintained at that level to 2035. GHG emissions are 41% lower at the start of 2035 than in 2010. These results are obtained by slower growth in overall government expenditures, net investment, and productivity a positive net trade balance cessation of growth in population a reduced

Fig. 1.5 A low-/no-growth scenario. Source Victor (2008)

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workweek a revenue-neutral carbon tax and increased government investment in public goods, on anti-poverty programs, adult literacy programs, and health care. In addition, there are more public goods and fewer status goods through changes in taxation and marketing there are limits on throughput and the use of space through better land use planning and habitat protection and ecological fiscal reform and fiscal and trade policies strengthen local economies. No model results can be taken as definitive, since models are only as good as the assumptions that go into them. But what World 3, GUMBO, and LowGrow have provided is some evidence for the consistency and feasibility of these policies, taken together, to produce an economy that is not growing in GDP terms but that is sustainable and desirable. This chapter offers a vision of the structure of an “ecological economics” option and how to achieve it—an economy that can provide nearly full employment and a high quality of life for everyone into the indefinite future while staying within the safe environmental operating space for humanity on Earth. The policies laid out here are mutually supportive and the resulting system is feasible. Due to their privileged position, industrial countries have a special responsibility for achieving these goals. Yet this is not a utopian fantasy to the contrary, it is business as usual that is the utopian fantasy. Humanity will have to create something different and better—or risk collapse into something far worse.

References Acemoglu D, Robinson J (2009) “Foundations of societal inequality”. Science 326(5953):678–679. http://www.sciencemag.org/content/326/5953/678.short Beddoe R, Costanza R, Farley J, Garza E, Kent J, Kubiszewski I, Martinez L, McCowen T, Murphy K, Myers N, Ogden Z, Stapleton K, Woodward J (2009) “Overcoming systemic roadblocks to sustainability: the evolutionary redesign of worldviews, institutions, and technologies”. Proc Natl Acad Sci 106(8):2483–2489. http://www.pnas.org/content/106/8/2483.abstract Boumans R, Costanza R, Farley J, Wilson MA, Portela R, Rotmans J, Villa F, Grasso M (2002) Modeling the dynamics of the integrated earth system and the value of global ecosystem services using the GUMBO model. Ecol Econ 41(3):529–560 Costanza R (1991) Ecological economics: the science and management of sustainability. Columbia University Press Costanza R, Alperovitz G, Daly H, Farley J, Franco C, Jackson T, Kubiszewski I, Schor J, Victor P (2013) Building a sustainable and desirable economy-in-society-in-nature. Australia, ANU E Press, Canberra Costanza R, Alperovitz G, Daly H, Farley J, Franco C, Jackson T, Kubiszewski I, Schor J, Victor P (2013) Building a sustainable and desirable economy-in-society-in-nature. State of the World 2013, in Assadourian E, Prugh T (eds). Washington, D. C., The Worldwatch Institute, pp 126–142 Costanza R, Andrade F, Antunes P, van den Belt M, Boersma D, Boesch DF, Catarino F, Hanna S, Limburg K, Low B, Molitor M, Pereira JG, Rayner S, Santos R, Wilson J, Young M (1998) Principles for sustainable governance of the oceans. Science 281(5374):198–199 Costanza R, Graumlich L, Steffen W, Crumley C, Dearing J, Hibbard K, Leemans R, Redman C, Schimel D (2007) Sustainability or collapse: what can we learn from integrating the history of humans and the rest of nature? Ambio 36(7):522–527 Costanza R, Hart M, Posner S, Talberth J (2009) Beyond GDP: the need for new measures of progress. Boston, MA, Frederick S. Pardee Center for the Study of the Longer-Range Future

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Costanza R, Kubiszewski I, Giovannini E, Lovins H, McGlade J, Pickett KE, Ragnarsdóttir KV, Roberts D, Vogli RD, Wilkinson R (2014) Time to leave GDP behind. Nature 505(7483):283–285 Costanza R, Mitsch WJ, Day JW (2006) “A new vision for new orleans and the mississippi delta: applying ecological economics and ecological engineering”. Frontiers Ecol Environ 4(9):465– 472. ://WOS:000241758700018 Daly HE (2008) Ecological economics and sustainable development. Cornwall, Edward Elgar Publishing, Selected Essays of Herman Daly Daly HE (2010) “From a failed-growth economy to a steady-state economy”. Solutions 1(2):37–43. http://www.thesolutionsjournal.com/node/556 Daly HE, Farley J (2004) Ecological economics: principles and applications. D. C., Island Press, Washington Diamond J (2005) Guns, germs, and steel: the fates of human societies. WW Norton, New York Easterlin RA (2003) Explaining happiness. Proc Natl Acad Sci 100(19):11176–11183 Farley J, Costanza R (2002) “Envisioning shared goals for humanity: a detailed, shared vision of a sustainable and desirable USA in 2100”. Ecol Econ 43(2–3):245–259. ://WOS:000179932600010 Feeny D, Berkes F, McCay BJ, Acheson JM (1990) The Tragedy of the commons: twenty-two years later. Hum Ecol 18(1):1–19 Fehr E, Falk A (2002) “Psychological foundations of incentives”. Euro Econ Rev 46(4–5):687–724. ://WOS:000175613000003 Gaffney M (2009) The hidden taxable capacity of land: enough and to spare. Int J Soc Econ 36(4):328–411 Goldstein M (2011) Paulson, at MYM4. 9 Billion, Tops Hedge Fund Earner List, Reuters, Thomson Reuters Hardin G (1968) “The tragedy of the commons”. Science, 162(3859):1243–1248. http://www.sci encemag.org/cgi/content/abstract/162/3859/1243 Hernández-Murillo R, Martinek CJ (2010) “The dismal science tackles happiness data”. The Regional Econ 14–15 International Panel on Climate Change (IPCC) (2007) IPCC fourth assessment report (AR4). Cambridge, Intergovernmental Panel on Climate Change Jackson T (2009) Prosperity without growth: economics for a finite planet. Earthscan/James and James Kasser T (2002) The high price of materialism. The MIT Press Kristinsdottir SM (2010) Energy solutions in Iceland. Solutions 1(3):52–55 Kubiszewski I, Costanza R, Franco C, Lawn P, Talberth J, Jackson T, Aylmer C (2013) Beyond GDP: measuring and achieving global genuine progress. Ecol Econ 93:57–68 Lawn PA (2003) “A theoretical foundation to support the index of sustainable economic welfare (ISEW), genuine progress indicator (GPI), and other related indexes”. Ecol Econ 44(1):105–118. http://www.sciencedirect.com/science/article/pii/S0921800902002586 Layard R (2005) Happiness: lessons from a new science. The Penguin Press, New York Meadows DH, Meadows DL, Randers J, Behrens WW (1972) The limits to growth. Club of Rome, Rome Ostrom E (1990) Governing the commons: the evolution of institutions for collective action. Cambridge University Press Pell D (1989) Common property resources: ecology and community-based sustainable development. Belhaven, London Prugh T, Costanza R, Daly HE (2000) The local politics of global sustainability. DC, Island Press, Washington Raskin P, Banuri T, Gallopin G, Gutman P, Hammond A, Kates R, Swart R (2002) Great transition: the promise of lure of the times ahead. Stockholm Environment Institute, Boston Raworth K (2012) A safe and just space for humanity: can we live within the doughnut? Oxfam International Rolfsdotter-Jansson C (2010) Malm? Sweden. Solutions 1(1):65–68

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Schor JB (2005) Sustainable consumption and worktime reduction. J Ind Ecol 9(1–2):37–50 Speth JG (2012) America the possible: manifesto for a new economy. CT, Yale University Press, New Haven Talberth J, Cobb C, Slattery N (2007) The genuine progress indicator 2006: a tool for sustainable development, Oakland, CA, Redefining Progress Victor PA (2008) Managing without growth: slower by design, not disaster. UK, Edward Elgar Publishing, Cheltenham Victor PA, Rosenbluth G (2007) Managing without growth. Ecol Econ 61(2–3):492–504 Weiss H, Bradley RS (2001) What drives societal collapse? Science 291(5504):609–610 Wilkinson RG, Pickett K (2009) The spirit level: why greater equality makes societies stronger. Bloomsbury Press, New York

Chapter 2

Estimation of Ecological Values on Environment-Friendly Agricultural Products Mitsuyasu Yabe

Abstract Conserving biodiversity and ecology are two of many aspects of agriculture, but these are not usually given a tangible market price. Some consumers, however, might be willing to pay a premium for agricultural commodities that are produced in ways that conserve biodiversity. Can market-oriented policies, which add the cost of biodiversity to the price of agricultural products, then be used to help conserve biodiversity? Our study focuses on consumer reactions to “life brand” products, which is labeled “Stork-raising rice” in Toyooka City in Japan, produced environment-friendly agricultural practices for the revival of extinct stork. Using data of choice experiment and Latent Segment model, we analysed whether these agricultural products can achieve higher market prices. The results showed that consumer, who had knowledge that stork populations had been revived because of changes in agricultural practice, are willing to buy expensive rice that improve biodiversity conservation for stork. However, consumers who bought this rice because of a preference for reduced-pesticide or organic food, without knowledge of revived stork history, were not willing to do so. The majority of agricultural product consumers in Japan are this type of consumer. Thus, the promotion of biodiversity conservation by only “life brand” agricultural products is not enough. Therefore, government support and public activities are indispensable for biodiversity conservation.

2.1 Introduction Conserving biodiversity and ecology are two of many aspects of agriculture, but these are not usually given a tangible market price. However, some agricultural products can be sold at higher prices if they have been produced in rural areas with a rich biodiversity. In regions of such high biodiversity, special “life brand” agricultural products command a premium price. For example, the repopulation of the Japanese crested ibis (Nipponia nippon) in Sado, Japan—an area where the species M. Yabe (B) Laboratory of Environmental Economics, Department of Agricultural and Resource Economics, Faculty of Agriculture, Kyushu University, Fukuoka, Japan © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_2

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had previously died out—has enabled local rice to be certified as being grown in “countryside living with the crested ibis”. In Toyooka, where the once extinct storks are now thriving after repopulation, there is “Stork-raising rice” (Stork rice): farmers who produce Stork rice farm in environmentally friendly ways that support the stork population. In 2010, almost 40 types of life brand rice for region-specific wildlife were on sale in Japan. The sale of these life brand products has become attractive to consumers and environmentalists as it helps to fund the conservation of Japan’s rural and natural environment (MAFF 2007, 2010). In regions that produce life brand products, farmers have economic incentives to conserve biodiversity and can sell their agricultural products at higher prices by doing so. The government would then not need to consider political support for or intervention in the conservation of biodiversity in such regions. In this study, to discuss the necessity of political intervention by the government, we will focus on the environmental value of life brand rice.1 Life brand environmental value can be divided into two types. The first type can be seen as a property of private goods where individuals can own the value related to the environment such as the positive image of agricultural products in terms of health, safety and being close to nature symbols that can be used as a brand. These values might be available for use only for the consumers who purchase the products and not for others. Therefore, we can state that exclusive use could result in the possible enjoyment of private good services. In order to entrust the market to supply those services that involve the environment in sufficient quantities to meet demand, special considerations regarding willingness to pay (WTP) need to be taken into account. The second type of environmental value can be seen as a property of public goods where the value related to the environment is not only specific to some individuals but belongs to all citizens. Besides, it’s necessary to keep those service benefits not only for our generation but also for future generations. Therefore, biodiversity value considered as public enjoyment needs to be preserved by the intervention of the government rather than paid for by the consumer because those services are not well identified by users as they do not own them personally. Of course, we do not suggest stopping personal donations but argue that society should bear the burden of preservation in this case. In this article we review research efforts of the worldwide famous The Economics of Ecosystems and Biodiversity (TEEB) (2008) on economic aspects of biodiversity. Literature was evaluated following the Stated Preference Method such as the Contingent Valuation Method (CVM) and the Choice Experiment (CE) focusing on specific species to evaluate the economic value of biodiversity and the ecosystem. It appears that only limited literature on multifunctional evaluation of agriculture and forestry exists in Japan. For example, Terawaki (1998), Kuriyama (1998) and the Japan Grassland Agriculture and Forge Seed Association (2008) constitute the main group of researchers working in this field. Their work focused mainly on assessing biodiversity value but they never applied their results to agricultural product value. Using the same methods, Aizaki’s (2005) research focused on environmental conservation 1

This paper is based on Yabe et al. (2014) and Yabe et al. (2013).

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of rice. Tanaka and Hayashi (2010) worked on general life brand studies. However in those previous studies, differences between biodiversity as a market good and a public good have not always been well understood and so biodiversity value as a public good embodied in a market good have always been over-estimated. Thus, this study focuses on Stork rice, which is organic rice or reduced pesticide rice and contributes to protect endangered storks, “Kounotori hagukumu okome” in Japanese, see Fig. 2.1. The Stork brand has a healthy and safe image to consumers who buy it. The price of Stork rice is substantially higher than other rice varieties and farmers want to sell the embedded biodiversity value as added-value products. However, if the rich natural environment to foster the storks is conserved, then all citizens can enjoy this environment as free riders. Therefore, assuming that consumers reject to pay for biodiversity value embedded in market goods, we can wonder if farmers will accept the empirical eco-activity challenges. Consequently, focus should be directed to estimate how much biodiversity value can be added to the Stork rice price compared to private use value and more importantly to know what kind of consumers will continue to pay this added value and how much consumers are willing to pay for it. Fig. 2.1 Stork-raising rice

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2.2 Analytical Method 2.2.1 Conceptual Framework of the LS Model In this study, we use the latent segment (LS) model, which belongs to the family of finite mixture or latent class models (Kamakura and Rusell 1989; Wedel and Kamakura 2000). The specific model presented here has been developed by Swait and Boxall and Adamowicz (2002) and is based on the conceptual framework developed in the work of McFadden (1986, 1999) and Ben Akiva et al. (1997). The model identifies sources of preference heterogeneity by revealing a finite number of latent segments of consumers that are characterized by relatively common tastes.2 Unlike other latent class models the LS model employed is not mere statistical approach for identifying segments (as for example segments models based on an initial cluster analysis). Instead the model is based on solid behavioural foundations that allow the analyst to simultaneously perform market segmentation and explains choice for a given segment of the population. In addition, the framework presented in this paper for determining the sources of preference heterogeneity does not rely merely on information from socio-demographic data but also utilises the information from psychographic data. There is an emerging literature in the analysis of discrete choice data that emphasizes the importance of the explicit treatment of latent individual characteristics in the decision-making processes (e. g. McFadden 1986; Ben Akiva et al. 1997, 1999; McFadden 1999; Fennell et al. 2003). One of the outcomes of this research is that the incorporation of latent attitudinal, perceptual and motivational constructs leads to a more behaviourally realistic representation of the choice process, and consequently, better explanatory power. Moreover, the same body of work has shown that in many cases psychometric data captures taste heterogeneity more adequately than demographic characteristics. The mechanism that leads to the realization of choice is as follows: a.

b. c.

d.

2

Individual latent attitudes, perception and motives (approximated by observed attitudinal indexes) together with the individual’s socio-demographic traits determine his/her segment membership likelihood function. Through a latent segment classification mechanism, the membership likelihood function determines the latent segment to which an individual belongs to. Then the individual’s preferences over a set of choices are influenced by (i) the latent class one belongs, (ii) one’s (observable) socio-demographic traits, (iii) his/her subjective perceptions of the (observable) choice objective attributes and, (iv) exogenous market and institutional conditions. These preferences are then processed according to a decision protocol which leads to the observance of the final choice. In random utility models this protocol is governed by some form of constrained utility maximization.

This section is based on Kontoleon and Yabe (2006).

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This framework, therefore, allows for the inclusion of both “objective” and “subjective” (or perceptual) data in the analysis of individual choice. Moreover, this model of choice implies that preferences are indirectly affected by attitudes, perception and motives through membership in a particular latent segment. This comes into contrast with other preference heterogeneity models that imply that attitudes and perceptions directly influence preferences. More importantly, the model acknowledges that it is possible to simultaneously explain individual choices and infer latent segment membership.

2.2.2 The Econometric Model This section presents how the choice process described above is operationalised within the random utility framework.3 The model postulates a composite utility function of the following form (assuming linearity): Uni/s = βs X in + εni/s

(2.1)

Which gives the utility U ni of the nth individual that belongs to a particular segment s from choosing an alternative i from a finite set C. The vector, X ni/s , consists of choice-specific attributes but could also include individual specific characteristics. Within this framework preference heterogeneity implies that each segment has its own utility parameter vector (i. e. β s = β k ; ∀s = k, ∀k ∈ S). By assuming that the disturbances εni are i. i. d. and follow a Type I (or Gumbel) distribution we can derive the probabilistic response function: eμs (βs X in ) πn/s (i) =  μs (βs X jn ) e

(2.2)

j∈C

This function represents the choice decision and provides the probabilities that an individual n belonging to a particular segment s will choose an option i. In essence it is a conditional logit model in which segment specific utility parameters are a function of choice attributes. The scale parameter μs may vary cross segments although in practice it is usually assumed that μ1 = μ2 = … = μs = 1. In order to construct a segment membership function it is assumed that there exist a finite number of segments S (S ≤ N) in which each individual can be classified with some probability W ns . The actual number of segments is itself a latent variable and ∗ represent a latent will have to be recovered from the estimation processes. Let Yns variable that determines segment classification of all N individuals into one of the ∗ is described as being segments in S. According to the behavioural framework, Yns 3

This section is based on Swait, Boxall and Adamowicz (2002), and Louvieir et al. (2000).

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M. Yabe

a function of both observable and unobservable (latent) individual characteristics. Following Ben-Akiva et al. (1997) and Swait this relationship can be formulated as: ∗ = αs Z n + ζns Yns

(2.3)

where Z n contains both the psychographic and demographic characteristics of the individual and as is the corresponding parameter vector. An individual will be classified in a particular segment k ∈ S as opposed to any other segment according to the classification mechanism: ∗ ∗ = max{Ynk }, k = s, k = 1, . . . , S Yns

(2.4)

∗ is a random variable, we can assess the probability that a particular Since, Yns individual belongs to a specific segment by specifying the distribution and nature of the residual terms in Eq. (2.3). By assuming that the ζ  ns are independent across individuals and segments and that they follow a Gumbel distribution with scale parameter λ we can derive the probability function for segment membership:

Wns =

eλ(as Z m ) S  eλ(ak Z n )

(2.5)

k=1

In order to derive a model that simultaneously accounts for choice and segment membership we bring together the two models of Eqs. (2.2) and (2.5) and construct a mixed-logit model that consists of the joint probability that individual n belongs to segment s and chooses alternative i: ⎡

⎤

⎡

⎤

⎢ λ(a Z ) ⎥ μ (β X ) ⎢ e s s in ⎥ ⎢ e s n ⎥ Pisn = (πin/s ) · (Wns ) = ⎣  μs (βs X jn ) ⎦ · ⎢ S ⎥ ⎣  λ(a Z ) ⎦ e k n e j∈C

(2.6)

k=1

Note that if we impose the restrictions α s = 0, β s = β, μs = μ, ∀s , we are in essence assuming homogeneity in tastes (i. e. the population is characterized by a single segment) and the model in Eq. (2.5) collapses to the standard multinomial logit model. Alternatively, Swait points out that as S → N (i. e. the number of segments approaches the number of individuals in the sample or population) the LS model becomes more akin to the random parameter logit model. Finally, it is worth noting that we need not assume the restrictive IIA assumption for mixture models such as that in Eq. (2.6). Determining the optimal number of segments S requires the balanced assessment of multiple statistical criteria as well as personal subjective judgment dictated by the

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Table 2.1 Attributes and levels used in the choice experiment Attribute

Level

Brand

Normal Koshihikari, stork rice

Number of storks inhabiting the rice production area

2, 7, 15, 29, 60, 100

Number of living organisms seen in rice fields Same as Toyooka, doubled number of Toyooka, tripled number of Toyooka Quantity of pesticide

Reduced pesticide (−30%), reduced pesticide (−75%), organic (−100%)

Price (5 kg) (yen)

2000, 2400, 2800, 3200, 3600, 4000

objectives of the study. So, in this model we use two segment model to show the clearly the deference of consumer’s attitude for biodiversity conservation.

2.3 Study Design and Implementation 2.3.1 Attributes of the Choice Experiment In this experiment we focus on brand image of Stork rice and level of biodiversity conservation. In order to simplify the questionnaire and to reduce the respondent’s workload we decided to use a simple profile, namely, as rice variety or taste were not the focus of the study we assumed a virtual situation where the proposed rice is polished, from the same variety and the same production area.4 In our questionnaire, we proposed the only variety of “Koshihikari” grown in Hyogo Prefecture and its taste is assumed to be excellent. We prepared five attributes and their levels (see Table 2.1) that consumers would potentially buy if the rice was sold in the shop. We also added the opt-out alternative for the consumers to select the actual rice that they have purchased at the time of the survey. The choice modelling technique requires consumers to choose only one alternative among three alternatives in each choice set (see Table 2.2). Consumers are requested to answer four choice sets using 2 × 32 × 62 orthogonal main effects design, which produced thirty six choice sets, and then we prepared 9 versions of the choice experiment questionnaire. For the attributes of the choice experiment, two brands, Normal Koshihikari and Stork rice, are used to analyse whether consumers prefer the “Stork rice” brand. In reality, storks live around Toyookaand at the time of the investigation 29 individuals were recorded. In our virtual situation, we proposed numbers below and above the current state. The attribute on “Number of living organisms seen in rice fields” is set to ascertain consumer preference for higher levels of biodiversity conservation, 4

As the research that applies the focus to these, for instance, see the reference such as Yoshida and Peterson (2003).

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Table 2.2 Profile examples of choice set Attribute

Alternative A

Alternative B

Alternative C

Brand

Stork rice

Normal Koshihikari

Number of storks inhabiting the rice production area

100

15

The rice you bought this time

Number of living organisms seen in rice fields

Doubled number of Toyooka

Same as Toyooka

Quantity of pesticide

Reduced pesticide (−30%)

Reduced pesticide (−75%)

Price (5 kg) (yen)

3200

3600

where the current situation in Toyooka is the reference level. It is also good to notice that Stork rice is already a reduced pesticide (−75%) rice. That is why reduced pesticide (−30%) is the reference level of the “Quantity of pesticide” criteria for 75% reduction and 100% reduction as organic rice. Moreover at the time of the investigation, the average price of 5 kg of rice without pesticide is sold at 3316 yen for organic Stork rice and 2892 yen for about 75% reduced pesticide rice.

2.4 Survey Design and Data Characteristics 2.4.1 The Questionnaire The questionnaire addresses “Stork-raising rice” buyers through rice stores where “Stork-raising rice” is available. We excluded traders handling small quantities and major distributors such as supermarket chains due to the difficulty in distributing the questionnaire survey sheets. A total of 23 corporations were surveyed, among which eight are from Kanto region and 15 from Kanto region (two traders inside of Toyooka, one consumer cooperative organization). We asked rice stores to distribute the questionnaires, to collect and to send us all buyers’ answers after they bought “Stork-raising rice”. We also undertook a mailing method, where buyers could reply by returning the questionnaires in free-of-charge envelopes. This method was mainly used through trader companies which usually sell rice by mail-order and cooperatives that take co-paid forms. Due to the time restriction,5 we provided traders with the same envelope in order for them to be able to send us all filled questionnaires they would collect in their store. The complete questionnaire set consisted of a mini pamphlet about “Stork-raising rice”, a return envelope and a pen in an enclosed 5

The questionnaire is 3 pages long and needs 10 min to answer when people read it slowly. Therefore collecting in store is the general rule but it can also be collected by mail for the convenience of respondents and traders.

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Table 2.3 Questionnaire distribution and response rate Questionnaires available

Undistributed questionnaires

Distributed questionnaires

Collected questionnaires

Response rate (%) 39.0

Kansai region

768

127

641

250

Kanto region

632

12

620

81

13.1

Cooperatives

800

202

598

378

63.2

2200

341

1859

709

38.1

Total

transparent envelope. The pen was a gift for the consumers who took the time to fill in the questionnaire and the mini pamphlet aimed to give basic information on “Stork-raising rice”. A total of 2200 questionnaires were sent to stores and traders, 768 in Kansai region, 632 in Kanto region and 800 at cooperatives. The method of distribution put priority on the major traders and was then distributed equally to other traders.6 The questionnaire distribution period lasted for 40 days from the end of September to the end of October of 2008 when the new rice came on to the market.7

2.4.2 Questionnaire Response Rate On the total of 2200 questionnaires, 1859 were distributed, 641 in Kansai region, 620 in Kanto region and 598 for the cooperatives (see Table 2.3). Only 709 informative questionnaires were returned and analysed, 250 in Kansai region, 81 in Kanto region, and 378 for the cooperatives. The response rate using the number of questionnaires distributed as a denominator is respectively 39.0% in Kansai region, 13.1% in Kanto region and 63.2% for the cooperatives, representing a total response rate of 38.1%.

2.4.3 Consumer Profiles On all returned questionnaires 85% were filled in by female, 12% by male, and the remaining 3% were either empty or incomplete returned questionnaires. Such a result represents the Japanese rice consumer-buyer. Indeed, in Japan it is mainly housewives who buy food, including rice. Moreover, 25% of answers were made by consumers in their forties, 22% were in their fifties, 19% in their thirties and 6

Originally, it is efficient to be proportional to the amount of handling of rice of the number of questionnaire distribute to each trader. However, such a method was adopted from the viewpoint of the data hiding secretly because it connected when the number of distributions was proportionally distributed with clarifying the amount of handling of each trader. 7 It doesn’t limit only to the buyer 2008 of “the Stork-rising rice” but also the buyer 2007 annual outputs for the answer to the questionnaire. The respect is also well-known in the trader.

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Fig. 2.2 Proportion of loyal customers for Stork rice

17% in their sixties. It is good to notice that cooperatives seem to have a larger influence on young customers compared to other distributors. An average Japanese family is composed of 2.56 people/family8 and they consume 4.9 kg of normal rice/person/month9 representing 12. 6 kg of rice/family/month. In our investigation on Stork rice consumption, 38% of the respondents answered that they consumed 5 kg/month and 38% consumed 10 kg/month. The average consumption is 9.3 kg of rice/family/month and 70% of the respondents bought less than 10 kg of Stork rice/month, which appears to be lower than the average consumption of normal rice in Japan.

2.4.4 Awareness on Stork Conservation and Agricultural Practices Respectively, 41% and 47% of purchased rice was “Reduced pesticide rice” and “Organic rice”. Interestingly, though the organic rice price is higher, the number of consumers who selected reduced pesticide rice almost rivalled the number of organic rice consumers. Forty four percent of the consumers declared that they “always buy it”, 21% declared that they “buy it several times per year” and 34% declared that they “bought it for the first time” at the time of the survey. This result shows that Stork rice has acquired loyal consumers (see Fig. 2.2). Those percentages coincide with the level of awareness in stork conservation efforts in Toyooka: 44% of previous awareness and 34% of little awareness (see Fig. 2.3). Surprisingly awareness of 8

The value in 2005 was quoted from National Institute of Population and Social Security Research (2010) about the average number of household members. 9 59 kg/year (the rough estimate value in 2008) was quoted from the Ministry of Agriculture, Forestry and Fisheries “Food supply and demand figures”, this was divided by 12 months, and estimated the rice consumption of per month and per person.

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Fig. 2.3 Proportion of stork conservation awareness

Fig. 2.4 Proportion of agricultural practice awareness

agricultural practices in Toyooka reached 49% a proportion higher than the 44% of consumers aware of stork conservation efforts in the region (see Fig. 2.4). There is a difference between the awareness of agriculture practices of Toyooka for consumers who buy Stork rice at usual shop (45%) and that of cooperative consumers (55%). This difference might come from the difference in information accessed by the two groups. Indeed, cooperatives often promote activities to give their members the opportunity to visit the production area. It is during those pedagogic visits that usually explanations on stork conservation and agricultural practices are provided to citizens.

2.4.5 Purchasing Decision The first characteristics leading consumer decisions to purchase Stork rice are effect on health (48%), and taste (23%) in Fig. 2.5. The influence of “environmental”

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Fig. 2.5 Reasons for purchasing stork rice

impacts on consumer choice is however very low (4%) and highlights the fact that most of the consumers buying rice do not attach great importance to the environment, but rather to their own personal benefits. Figure 2.6 shows the answers to the question: which among two effects on Storkraising rice is given priority for (1) living organism habitat conservation and (2) healthy food? The figure shows that even the neutral response of “Both were valued” was half the total response. Those respondents who answered that they valued the individual health benefits were approximately three times the number who answered that they valued habitat protection. This result shows a tendency among the survey respondents to value health benefits for the consumer as a more important decision criterion than the more universal biodiversity conservation concept. Interestingly, to the questions on how much a consumer is willing to pay for 5 kg of Stork rice, two thirds of the consumers answered 3000–3500 yen (see Fig. 2.7), a price that almost corresponds to the average actual market price, which indicates Fig. 2.6 Importance of habitat conservation and individual health

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Fig. 2.7 Distribution of WTP for 5 kg of Stork rice

that consumers’ answers might be biased because their price limit reflected in the present price.

2.5 Estimated Results 2.5.1 Estimated Results of Conditional Logit Model Table 2.4 shows the explanatory variable in the conditional logit model and the estimated results. We can consider this conditional logit model as a special case of one segment LS model without membership function. If those 701 people had answered all the four sets of choice experiment questions, the number of available samples would have been 2804. Since there were some people who did not answer all the four questions, the number of available samples that could actually be used became 2706. On average each respondent answered 3.8 questions. The Alternative Specific Constant, ASC, estimates the effect of preference between rice purchased at the time of this survey and the other rice attributes which were not used for this survey. Taking into account the attributes of rice which were not presented in this study, the estimated ASC is negative and has a difference from zero at the level of 1% significance, and then we can get the respondent prefers their voluntarily selected rice to virtual rice. Also the estimated coefficient of price has the expected negative sign at the 1% significant level. This means that people indicate a higher price results in lower utility.

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Table 2.4 Estimated result of conditional logit model Variable

Definition

Estimated coefficient

t-value

MWTP (yen)

ASC

Alternative specific constant

−0.684

−9.156***

−839

Brand

Stork rice = 1, normal Koshihikari = 0

0.220

−3.195***

269

Stork’s population

ln (stork number)

0.249

8.889***

306

75% reduced pesticide

Pesticide-75% = 1, otherwise = 0

1.098

11.156***

1347

Organic

Organic = 1, otherwise 1.816 =0

18.775***

2230

Doubled biodiversity

Doubled organisms in 0.149 paddies, other wise = 0

1.756∗

183

Tripled biodiversity

Tripled organisms in 0.162 paddies, other wise = 0

1.829∗

199

Price

1000 yen/5 kg

−0. 815

Number

2706

Log likelihood Note *** ,

−15.589***

**

2333.96

and * means statistically significant level at 1%, 5% and 10%, respectively

There is a significant difference at the 1% level in terms of customer choice between the two proposed brands, Stork rice and Normal Koshihikari, which emphasizes the importance of the brand or name of a product. Respondents have an additional willingness to pay for Stork rice and this MWTP is 269 yen/5 kg, which is higher than that of normal Koshihikari rice.10 For the stork population, the naturalized logarithm is taken. We can see that the respondents exhibit high valuation of rice when the number of living storks increases in the rice producing areas though the estimated coefficient was positive and significant at the 1% level. This MWTP was 306 yen/5 kg. For the reduction of pesticide, we used two dummy variables. These were compared with reduced pesticide 30% as the reference level. These dummy variables are “75% reduced pesticide” and “Organic”. “75% reduced pesticide” and “Organic” 10

If parameters can be estimated, the welfare measure of marginal willingness to pay (MWTP) can be calculated in the following way. That is, the indirect utility function v can be defined by the following equation, if it is assumed to be a linear function involving the attribute x k , the amount paid, p, and their  parameters β k and β p : v(x, p) = βk xk + β p p k

If this equation is subjected to total differentiation, deeming the utility level unchanged (dv = 0) and fixing the attribute x k (except attribute x j ) also at the initial level, the amount of WTP for one unit increase of attribute can be defined as follows:

x j  M W T Px j =

dp dx j

=−

∂v ∂x j

∂v ∂p

β

= − β pj .

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both have statistically significant at the 1% level, and which match the expected positive sign condition. The estimated coefficient of “Organic” was larger than “75% reduced pesticide”. The MWTPs for “75% reduced pesticide” and “Organic” were 1347 and 2230 yen/5 kg, respectively. For biodiversity, two dummy variables were also used. The present biodiversity level of rice field in Toyooka was set as zero. “Doubled biodiversity” was assumed to be doubled amount of living things in the rice field and was set as 1, and “Tripled biodiversity” was assumed to be the tripled amount of living things in the rice field and was also set as 1. Both estimated coefficients have the expected positive sign at the 10% level of significance and the estimated coefficient of “Tripled biodiversity” is larger than that of “Doubled biodiversity. “Also the MWTPs of “Doubled biodiversity” and “Tripled biodiversity” were 183 and 199 yens/5 kg, respectively. However, there is statistically no significant difference between them because the estimated MWTP of “Doubled biodiversity” falls in the 95% confidence interval of MWTP for “Tripled biodiversity”, and vice versa.11 However, according to Kontoleon and Yabe (2006), the use of these analytical results based on average consumers is not always the best way to capture the whole picture of consumers.

2.5.2 Latent Perceptual and Attitudinal Variables Estimation of the LS model required first the specification of the vector of individual latent perceptual and attitudinal constructs in Eq. (2.3) underpinning segment membership and choice behavior. To determine this vector we undertook a review of food attitudinal constructs. The final set of latent constructs that were chosen included both general concerns over food purchasing decisions as well as specific concerns over biodiversity conservation in particular. The next step of the estimation process consisted of constructing observable proxy indicators of these latent attitudinal constructs. A total of 10 attitudinal and behavioral questions were included in the survey. The responses to these questions (obtained on a five point Likert scale) were subjected to exploratory actor analysis. Following Child (1990) rotated factor loadings above 0. 40 were considered as factoring together. Based on this criterion, the following two factors were identified: 1.

2.

Environmental concerns: refers to concerns over the state of the environment as well as the attitude that the individuals use eco-bag or buy environmentally friend goods. Food safety concerns: refers to a more specific type of latent variable that is more related to food safety consciousness than to overall health concerns.

11

The confidence interval of MWTP based on Hanemann and Kanninen (1999) can be calculated as follows:





β β β V ar = − β pj = β12 β pj V ar (β p ) + V ar (β j ) − β pj Cov(β j , β p ) p

The 95% confidence interval of MWTP of “Doubled biodiversity” and “Tripled biodiversity” are [12, 354] and [22, 376], respectively.

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M. Yabe

Factor scores where obtained for every observation using the regression method suggested by Child (1990). This process produced data for two new variables that were then used to parameterize the vector Z n . After experimentation with various specifications for the segment membership component the best fit specification was to include the two attitudinal variables extracted in the factor analysis along with the socio-economic characteristics of “frequency” of buying stork rice (1 = always, 2 = often, 3 = sometime, 4 = first time).

2.5.3 Estimated Results of Latent Segment Model The latent segment model can simultaneously estimate the probability that respondents belong to a segment and the utility that respondents enjoy in the segment. However, as we have deleted samples that did not answer factor analysis questions for the use of the segment function, the sample size decreased to 1980. In this study, we only discuss the results of the two-segment model to clearly compare the difference in respondents’ attitudes toward biodiversity conservation (Table 2.5). Firstly, we show the estimated results for the segment function. The coefficients of Segment 1 are set to zero as a reference level, and only the coefficients of Segment 2 are estimated. In Segment 2, the estimated coefficient of “Environmental concerns” is statistically significant at the 1% level and has a negative sign, which means that Segment 2 has a low concern about the environment. However, the estimated coefficients of “Food safety concerns” and “Frequency” are statistically significant at the 10% level and the 1% level, respectively, and have positive signs, which means that Segment 2 has a high concern about food safety but a low frequency of buying Stork rice. Thus, we can say that Segment 2 is extremely concerned about food safety but not very concerned about environmental issues and Stork rice, and so this segment is considered the food safety concern group. The proportion ratio of this group was estimated to be about 60%. On the other hand, the estimated coefficients of segment function in segment 1 have the opposite sign of segment 2. Thus segment 1 is not concerned about food safety but very concerned about environmental issues and Stork rice, and then considered the environmental concern group. Also the proportion of this group was estimated to be about 40%. Secondly, we show the estimated results of the utility functions. Regarding the utility function of Segment 1, the environmental concern group, both the estimated coefficients of “Brand” and “Tripled biodiversity” are statistically significant at the 5% and 10% levels, respectively, and the other coefficients are statistically significant at the 1% level. The signs of the estimated coefficients are positive except for that of “Price”, which is negative. Regarding the estimated coefficient of “Brand”, the price of Stork rice is 383 yen/5 kg, which is higher than that of normal Koshihikari rice. Regarding the WTP for “Stork population”, the increased number of storks after the logarithmic conversion

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Table 2.5 Estimated results Variables

Segment 1

Segment 2

Estimated coefficient

t-value

MWTP (yen)

Estimated coefficient

t-value

MWTP (yen)

−1.095

−3.212

−725

2.179

2.225**

2410

Brand

0.579

2.370∗∗∗

383

0.150

0.856

–

Stork’s population

0.217

3.039**

144

0.459

4.496***

507

75% reduced pesticide

2.953

2.684∗∗∗

1955

0.843

3.275∗∗∗

933

Organic

4.062

3.448∗∗∗

2689

1.965

7.414∗∗∗

2173

Doubled biodiversity

0. 588

2.313∗∗∗

389

−0.036

−0.175

–

Tripled biodiversity

0.455

1.834**

301

0.156

0.725

−1.5101

−6.613*

−0.904

−5.819∗∗∗

Utility function ASC

Price

—

Segment function Constant

–

−0.794

−1.850*

Environmental concerns

–

−0.685

−3.530∗∗∗

Food safety concerns

–

0.344

1. 834*

Frequency

–

0.185

2.840***

Structure ratio Log likelihood

0.402

0.598 −1739.11

Note *** , ** and * means statistically significant level at 1%, 5% and 10%, respectively

means that the MWTP is 144 yen / 5 kg per one. For example, if the number of storks increases from 29 to 60, the MWTP is (ln(60) − ln(29)) × 144 = (4.093 − 3.367) × 144 = 105 yen. Based on the estimated coefficient of “75% reduced pesticide”, the MWTP was 1995 yen for buying 75-percent-reduced pesticide rice instead of 30-percent-reduced pesticide rice. In addition, regarding the estimated coefficient of “Organic” (no pesticide), the MWTP was 2689 yen for organic rice instead of 30-percent-reduced pesticide rice. Thus, we found that Segment 1 has a very high WTP for lower-chemical and lower-pesticide rice. Moreover, when the number of living things in the rice field doubles, the MWTP for “Doubled biodiversity” is 389 yen, and if the number of living things in the rice field is tripled, the MWTP for “Tripled biodiversity” is 301 yen. This means that this group has a positive willingness to pay for public goods—that is, for increase of biodiversity. Although the MWTP for “Doubled biodiversity” is higher than that of “Tripled biodiversity”, there is no statistically significant difference between the

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two MWTPs, just as in the case of the conditional logit model. This might mean that the environment concern group is aware of both the importance and the difficulty of increasing biodiversity. Alternatively, they may consider the possible damage by birds and animals related to increased biodiversity and make a judgment on the overall costs and benefits. This topic remains for further study. In the utility function of Alternative C, we assume that the ASC of “the rice you bought this time” is zero, and we then estimated the ASC of Segment 1. The estimated coefficient of ASC was statistically significant at the 1% level, and its sign was negative. This means that regarding attributes that were not shown in this survey, the environment concern group preferred the characteristics of the rice they bought this time. Next, in the food safety concern group of Segment 2, the estimated coefficients of “Brand”, “Doubled biodiversity”, and “Triple biodiversity” have no statistically significant difference from zero. This means that respondents who are concerned about food safety but who do not buy Stork rice very often had neither strong feelings for the Stork rice brand nor concerns about the increase of biodiversity. The estimated coefficients of “Stork population”, “75% reduced pesticide”, and “Organic” were statistically significant at the 1% level. The MWTP for increased stork population is 507 yen/kg, and when the stork population changes from 29 to 60, Segment 2 is willing to pay (ln (60) − ln (29)) × 507 yen/5 kg = (4. 093 − 3. 367) × 507yen/5 kg = 368 yen/5 kg. The MWTP for “75% reduced pesticide” and “Organic” is less for Segment 2 than for Segment 1: 933 and 2173 yen, respectively. Additionally, as the estimated coefficient of ASC was statistically significant at the 5% level and had a positive sign, the food-concern group has an interest in the characteristics shown in this profile, and prefer this rice to the hypothetical rice they bought this time. Thus, the food safety concern group is interested in increasing the number of storks but has no concern for public goods—that is, for the conservation of the storks’ habitat. This group is only concerned with private goods—that is, reduced chemicals and pesticides—for which the profit clearly belongs to them.

2.6 Conclusion In this study on Stork rice, we focused on analysing whether agricultural products can command higher prices by granting the product a life brand, and whether it is possible to add to agricultural product prices the value of public goods such as biodiversity. A priori, Stork rice consumers were expected to show more environmental awareness than general consumers but the replies of many respondents attached greater importance to their health than to stork conservation in Toyooka. In this study, we estimated the MWTP for such private goods as food safety and such public goods as biodiversity conservation. The results showed that while 40% of environment concern respondents in this survey had a willingness to pay to improve both the private and public values of the environment, 60% of food safety concern respondents only had a willingness to pay to improve private values they do not

2 Estimation of Ecological Values on Environment-Friendly …

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have a clear willingness to pay to improve public values of the environment, such as biodiversity. We also found that consumers who bought Stock rice for reasons of reduced pesticides or because it is organically grown were reticent to buy expensive agricultural products for the purpose of biodiversity conservation. As such, they are able to become free riders. Such a consumer would actually be a majority purchaser of Japanese agricultural products. Thus, this study clarified that to promote biodiversity conservation as one of the important aspects on Agricultural Heritage Systems is difficult by producing and selling life brand agricultural products, as theoretically foreseen due to their characteristics of public goods. Therefore, governmental supports are indispensable for biodiversity conservation. Although life brand advertises biodiversity conservation in rural regions, the additional value placed on these products by the average consumer appears to be centered only on the health and safety of the individual consumer. The limitation of this research is that we focus only on Stork rice consumers. To improve our analysis and get a better overview on willingness to pay, more general consumers of different classes need to be questioned.

References Aizaki H (2005) Choice experiment analysis of consumers’ preference for ecologically friendly rice. Agric Inf Res 14(2):85–96 Ben-Akiva M, Walker J, Bernardino AT, Gopinath DA, Morikawa T, Polydoropoulou A (1997) Integration of choice and latent variable models. Paper presented at the International association of travel behavior research conference (IATBR), Austin, Texas, 21–25 Sept 1997 Ben-Akiva M, McFadden D, Gärling T, Gopinath D, Walker J, Bolduc D, Boersch-Supan A, Delquié P, Larichev O, Morikawa T, Polydoropoulou A, Rao R (1999) Extended framework for modeling choice behavior. Mark Lett 10:187–203 Boxall PC, Adamowicz WL (2002) Understanding heterogeneous preferences in random utility models: a latent class approach. Environ Resource Econ 23:421–446 Child D (1990) The essentials of factor analysis. Cassell Educational Limited, London Fennell G, Allenby GM, Yang S, Edwards Y (2003) The effectiveness of demographic and psychographic variables for explaining brand and product use. Quant Mark Econ 1:223–244 Hanemann WM, Kanninen B (1999) The statistical analysis of discrete-respond CV data. In: Bateman I, Willis K (eds) Valuing the environment preferences: theory and practice of the contingent valuation method in the US, EC and developing countries. Oxford University Press, Oxford, pp 302–441 Japan Grassland Agriculture and Forage Seed Association (2008) Multi functionality of grassland management: index of meadow. Japan Grassland Agriculture and Forage Seed Association, Tokyo (in Japanese) Kamakura W, Russell G (1989) A probabilistic choice model for market segmentation and elasticity structure. J Mark Res 26:379–390 Kontoleon A, Yabe M (2006) Market segmentation analysis of preferences for GM derived animal foods in the UK. J Agric Food Ind Organ 4(1):1–36 Kuriyama K (1998) Environmental value and valuation method. Hokkaido University Press, Hokkaido (in Japanese)

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Louviere JJ, Hensher DA, Swait JD (2000) Stated choice methods: analysis and application. Cambridge University Press, Cambridge McFadden D (1986) The choice theory approach to marketing research. Mark Sci 5:275–297 McFadden D (1999) Rationality for economists. J Risk Uncertain 19:73–105 Ministry of Agriculture, Forestry and Fisheries (MAFF) (2007) Biodiversity strategy for agriculture, forestry and fisheries. MAFF, Tokyo (in Japanese) Ministry of Agriculture, Forestry and Fisheries (MAFF) (2010) Living things mark: agricultural products guide book. MAFF, Tokyo (in Japanese) National Institute of Population and Social Security Research (2010) Demographic material collection, Tokyo Tanaka A, Hayashi T (2010) Agricultural practices for biodiversity conservation and life mark products. In: Policy Research Institute, Ministry of Agriculture, Forestry and Fisheries (PRIMAFF) Research project report, impact of intensive agricultural production of biodiversity. PRIMAFF, Tokyo (in Japanese), pp 1–17 Terawaki T (1998) Evaluating the economic value of biodiversity conservation and agricultural features. Agric Econ 31:97–122 The Economics of Ecosystems and Biodiversity (TEEB) (2008) The economics of ecosystems and biodiversity: an intermediate report. Retrieved from http: //www.teebweb.org/Home/tabid/924/ Default.aspx Wedel M, Kamakura W (2000) Market segmentation: conceptual and methodological foundations. Kluwer Academic Publishers, Boston Yabe M, Hayashi T, Nishimura B (2013) Economic analysis of consumer behaviour and agricultural products based on biodiversity conservation value. In: Ram Pillarisetti J (ed) Multifunctional agriculture, ecology and food security: international perspectives. Nova Science Publishers, Inc., New York, pp 21–37 Yabe M, Hayahi T, Nishimura B, Sun B (2014) Conservation of biodiversity and its value in agricultural products. J Resourc Ecol 5(4):291–300 Yoshida K, Peterson HH (2003) Estimating the consumer response toward the country-of-origin labeling and food safety of imported rice. J Rural Econ (special issue 2003): 297–302

Chapter 3

Progress in China’s Rural Ecological Governance Zhou Li

Abstract This article analyzes the differences among resource economics, environmental economics and ecological economics, establishes an analytical framework for China’s sustainable development, discusses in detail the achievements of the construction of a rural ecology in terms of nature reserve protection, forestry construction, grassland construction, water environment protection, water and soil loss, and the control of desertification, it analyzes the problems in ecological governance from three aspects, and proposes corresponding policy suggestions. Keyword Rural ecological governance · Ecological economics · Sustainable development · Progress

3.1 Differences Among Resource Economics, Environmental Economics and Ecological Economics At a recent high-profile seminar on the construction of the economic disciplines in China, some scholars argued that resource economics, environmental economics and ecological economics have a lot of overlapping research content and should be treated as one discipline. This perception is clearly linked to the reality that these disciplines are confused with each other. In view of this, a brief distinction among the three disciplines will be made before discussing the theme.

3.1.1 Resource Economics Resource economics aims to study the effective and sustainable use of resources, and its key issue is to determine the optimal rate of utilization of renewable resources and the optimal rate of substitution of non-renewable resources. Although there are Z. Li (B) Rural Development Institute, Chinese Academy of Social Sciences, Beijing 100732, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_3

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mature economic methodologies for determining the optimal rate of utilization and the optimal rate of substitution of resources at the microscopic level, in the case of significant or abnormal fluctuations in market prices, the actual rate of resource utilization of an enterprise may still deviate from the equilibrium point of optimal utilization or optimal substitution of resources in the theory of economics. In order to overcome such deviations, there is an objective need to manage resource utilization and resource substitution at the macroscopic level. The main initiatives introduced into macroscopic management are explained as follows. First, to clearly define the property rights of resources. The analysis of the relationship between the property rights of resources and resource utilization is based on the hypothesis of the “tragedy of the commons”. Taking the “tragedy of the commons” as an example, economists conclude that the resources without exclusive property rights will certainly be over-utilized. It is almost undisputed, both historically and in reality, that resources with well-defined property rights are better utilized and protected. It is important to note that the difficulty of defining property rights varies from one resource to another. Generally speaking, it is more difficult to define the property rights for large-scale resources than for small-scale resources, for weakly separable resources than for strongly separable resources, and for fluid resources than for fixed resources. In cases where it is difficult to define the property rights of individuals, the government usually issues licenses to define the rights of resource utilization, such as water use, logging, grazing and fishing to specific groups (or communities), and implements the mandatory management systems such as phased bans on logging, grazing and fishing to effectively unify conservation and use. Second, to guide technological innovation and increase the growth rate of renewable resources and the efficiency of resource utilization and substitution. Third, to decrease the scale of resource openness and reduce the difficulty of resource utilization and management. For example, aiming at the increasing radius of resource development and the technological advancement of seabed mineral resource development, some coastal countries extend their territorial waters to 200 nautical miles, which in essence is to define these resources from global to national, reduce the difficulty of resource management and reverse the depletion of resources. Fourth, to broaden the scale of collective action, and through a participatory co-management mechanism within the collectivity, eliminate the problem of external diseconomies caused by the unilateral pursuit of private profit maximization.

3.1.2 Environmental Economics Environmental economics aims at studying the problem of minimizing the cost of keeping pollution emissions within the environmental capacity. The environmental capacity is determined by environmental standards. Low environmental standards are associated with high environmental capacity and relatively more pollution, and vice versa. Environmental standards are set by the administration of the government, thus being subjective. In general, the higher the level of economic development

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of a country, the higher the environmental standards and the less pollution that is emitted. This is where environmental economics differs from resource economics and ecological economics. The management of pollutants has undergone changes. Initially, an “end-of-pipe treatment” approach was adopted. This approach is effective, but there are four shortcomings: First, it affects the economic efficiency and competitiveness of enterprises, so that enterprises lack the incentive to control pollution; second, the management of pollution treatment is difficult, and there is a risk of pollution transfer; third, the waste of resources in the production process cannot be eliminated; fourth, the cost of government supervision and management is too high. Given that 30–40% of industrial pollution can be solved by optimizing the production process, the “process treatment” with clean production as the connotation emerges. It makes pollution treatment an integral part of an enterprise’s development strategy, rather than a means of constraints imposed on the enterprises. Also, the “park treatment” with the ecological industry as the connotation emerges aiming at all the problems of industrial pollution that cannot be solved by clean production. The so-called “park treatment” is to form a symbiotic park with the coordinated structure and functions based on the interrelated resource utilization of all the enterprises to achieve “zero emission” of pollutants in the park. For example, the waste generated by the thermal power generation enterprises can be used as the raw materials for construction enterprises, and the waste produced by construction enterprises can be used as the raw materials for other industrial enterprises, thus forming a virtuous cycle. The introduction of “park treatment” can solve 60–70% of industrial pollution which it is difficult to treat by optimizing the production process. In order to connect the production and consumption sectors, a kind of “comprehensive treatment” with a circular economy as the connotation emerges. So-called “comprehensive treatment” is to reuse waste materials in life by recycling and processing. These system called “process treatment”, “park treatment” and “comprehensive treatment” have intrinsic logical connections with the “end-of-pipe treatment”, thus being the three extensions of the pollution treatment. Here, “process treatment” is a qualitative leap in pollution treatment, and “park treatment” and “comprehensive treatment” are the two extensions of “process treatment”. “Park treatment” extends the pollution treatment from enterprises to enterprise clusters, and “comprehensive treatment” extends the pollution treatment from production to consumption. The most valuable innovation in environmental economics is the establishment of a trading market for the rights of environmental capacity use (commonly referred to as pollution rights). The operation of the trading market for the rights of environmental capacity use can reduce the cost of pollution treatment and direct it to more efficient enterprises; more importantly, the governments at all levels and environmental protection organizations can reduce the total amount of emissions by buying the rights to environmental capacity use and not selling them. This is a market mechanism to improve the quality of the environment.

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3.1.3 Ecological Economics Ecological economics is the earliest discipline to explore the harmonious relationship between man and nature and point out that economic rationality must be combined with ecological rationality, production and life must be combined with ecology, and the goal of profit maximization must be combined with the goal of ecological stabilization. It advocates and pursues the theoretical core of the combination of corporate and social optimums, individual and collective rationality, and economic and ecological rationality. It is an extremely important characteristic that distinguishes it from other branches of economics, and this research perspective is being recognized by more and more people. There are three main entry points to the studies of ecological economics. First, it takes the ecological system as the object of study, applies the ecological model as well as the method of market value, the method of a surrogate market and the method of a simulation market, studies the value increment of the ecosystem services brought by the forward succession of human activities on the ecological system, and the value depletion of the ecosystem services brought about by the reverse succession, estimates the standards for payment (penalty) of the contributors (destroyers) of ecological protection, restoration and construction based on the increment (and depletion), and derives the policy implication that the ecological system must be protected and improved. Second, it starts from the institutional and organizational innovations to regulate corporate and human behavior, coordinate the relationship between people, unify the corporate and individual self-interest and altruistic goals, and achieve the coordination of economy and ecology and the harmony of man and nature. Third, it begins with stakeholder consultation and negotiation, and forms and implements the win–win solutions to ecological problems. The proposal for guiding stakeholder participation allows the ecological economics not only to serve as the instrumentality for evaluating the behavior of the government, enterprises and others, but also to have the characteristic of guiding the public in their struggle to build a harmonious society.

3.2 Analytical Framework for Sustainable Development In the 1980s, the World Commission on Environment and Development (WCED) headed by Mrs. Brundtland and composed of 22 world-renowned scholars and political activists, proposed the concept of sustainable development in the work called Our Common Future. The author believes that it is not only a new concept, but also an inevitable result of social and economic development. Social and economic sustainable development can be depicted by four Kuznets curves.

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3.2.1 The Kuznets Curve of Changes in the Income Distribution Kuznets, through the statistical data analysis of the long-time series of all the countries, found that the national income gap of a country is very small at the stage of underdevelopment, and that this gap tends to widen at the early stage of economic development, but shrinks again after entering the stage of mature economic development. The inverted U shape of income distribution changes is the original meaning of the Kuznets curve. A society in which the gap in the distribution of national income tends to shrink is obviously a society in which the level of sustainable development tends to increase. According to an analysis, the formation of a perfect distribution system is the main reason for the inverted U-shaped changes in the distribution of income during the process of economic development. This system of distribution consists of the first distribution in which the market follows the principle of efficiency, the second distribution in which the government follows the principle of equity and the third distribution in which the society follows the principle of responsibility. The relevant literature reveals that, without the second distribution in which the government follows the principle of equity and the third distribution in which the society follows the principle of responsibility, the Gini coefficient of the distribution of the national income will usually be higher than 0.5, which means that the emergence of the Kuznets curve of income distribution is the result of the joint participation of the government and the society in that distribution.

3.2.2 The Kuznets Curve of Changes in the Total Population Malthus, according to the basic assumptions that economy increases in arithmetic progression and population increases in a geometric progression, concluded that the population would be controlled to balance the population level with economic growth. However, recent practice indicates that the changes in the total population in the course of economic development are also characterized by an inverted U-shaped Kuznets curve. The society in which the population pressure tends to diminish is clearly a society in which the level of sustainable development tends to increase. According to an analysis, there are two main reasons for the changes in the total population with the characteristics of Kuznets curve: First of all, the contribution of population increase to the economic growth is getting smaller and smaller, while the contribution of the improvement in the quality of the population to economic growth is getting larger and larger; second, the social security system replaces the family security system, thus leading to a sharp decline in the people’s need to reproduce.

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3.2.3 The Kuznets Curve of Changes in the Environmental Conditions Throughout the long period of our history, because of the small size of the economy, the pressure put by human activities on the environment has been insignificant. This increasing pressure is characteristic of the early stages of economic development and tends to decline as economic development reaches a mature stage. A society in which environmental pressure is decreasing is clearly a society in which the level of sustainable development tends to increase. According to an analysis, there are two main reasons for the changes in the environmental conditions with the characteristics of Kuznets curve: First of all, it forms a four-in-one system of a framework for environmental treatment, an end-of-pipe treatment, a process treatment, a park treatment and a comprehensive treatment; second, the government’s environmental management system is becoming more and more perfect, the financial expenditure on environmental treatment is on the increase, and the environmental demand of the residents who have the ability to pay is increasing. Non-governmental organizations are becoming more active and the market mechanism is being more comprehensively applied.

3.2.4 The Kuznets Curve of Resources Throughout the long period of our history, due to the small size of the economy, the amount of natural resources input into the economic system has been limited. The rapid growth of the input of natural resources into the economic system is characteristic of the early stages of economic development, and the demand for natural resources for economic growth tends to decline as the economic development reaches a mature stage. A society with decreasing pressure on resources is obviously a society in which the level of sustainable development tends to increase. According to an analysis, there are three main reasons for the emergence of the Kuznets curve of resources: First, the efficiency of the utilization of resource has been improving; second, the rate of resource reuse is on the increase; and third, economic growth is increasingly relying on the contribution of progression, and the demand for natural resources is getting smaller and smaller. Initially, attention was paid to land resources, with the main initiative being land reform in order to address the constraints on economic development posed by the unequal distribution of land resources. Since the 1950s, energy resources have become an increasingly concentrated resource, with the main task being to address the constraints on economic development posed by energy resources. In the twentyfirst century, freshwater has become an increasingly concentrated resource. With this in mind, the Kuznets curve of resources is examined below with water resource as an example (Figs. 3.1, 3.2, 3.3 and 3.4).

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Fig. 3.1 Sweden’s total water consumption and the trends in its GDP change

Fig. 3.2 The United States’ total water consumption and the trends in its GDP change

Fig. 3.3 Japan’s total water consumption and the trends in its GDP change

From Figs. 3.1, 3.2, 3.3 and 3.4, it can be seen that on the one hand, the economic aggregate continues to grow, but on the other hand, the amount of water resource required for production and living shows an inverted U-shaped change. This is the

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Fig. 3.4 China’s total water consumption and the trends in its GDP change

result of the increasing efficiency of the utilization of resources, continuous improvement of the structure of that utilization, and the gradual replacement of a resourcebased economy by a science-based economy. It is also the main reason why many metric studies conclude that the contribution of total factor productivity to economic growth exceeds 80%.

3.3 Rural Ecological Protection and Construction 3.3.1 Advances in the Awareness of the Conservation of Nature The awareness of the conservation of nature in China has gone through three stages. (1)

The potential value of protecting species. The conservation of nature in the first stage (in the 1950s) aimed at preserving the conditions for scientists to discover new species, so the nature reserves designated at that time were all places where the potential for discovering new species was relatively high, such as Xishuangbanna in Yunnan, Mountain Fanjing in Guizhou and Mountain Dinghu in Guangdong. The dominant theory of potential utility in this stage believed that human knowledge of biological resources was extremely limited, and that the biological resources utilized were derived from the experience of agriculture and animal husbandry, that is to say, hundreds of biological resources were selected and domesticated by our ancestors from tens of thousands of biological resources. How to use the undiscovered species and genes to improve the productivity of agriculture and animal husbandry was an important responsibility that scientists had to assume. An example proving the importance of the conservation of nature was the wild rice in nature reserves,

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(2)

(3)

47

which provided support for Mr. Yuan Longping, a famous Chinese breeder, to develop hybrid rice. The potential value of protecting ecosystems. The conservation of nature in the second stage (in the 1980s) aimed at preserving the conditions for technicians to find the more efficient ways of allocating resources. The theory of mainstream system productivity in this stage held the opinion that the productivity of natural ecosystems, as measured by biomass, was much greater than that of the existing agricultural land, for the main reason that the natural ecosystems were able to make full use of the various resources in the soil, whereas monocropping, even taking technical agricultural measures, were still not as “flexible” as natural ecosystems to utilize the light, heat and water. This meant that the natural ecosystems on the whole pointed out the direction for the improvement of the technologies for biological utilization. This was the theoretical basis for classifying all ecosystems of typical significance as nature reserves. The potential value of protecting biodiversity. Ever since the 1990s, the goal of the conservation of naturehas shifted to biodiversity. The dominant rivet theory in this stage argued that the vast majority of species were functional species and that they were highly unlikely to become economic species. The loss of a functional species, which is equivalent to a rivet in an airplane, would have little effect on the overall performance of the airplane, but the continuous loss of rivets would have an increasing effect on the overall performance, and would eventually lead to the collapse of the airplane. The same was true of the ecosystems. The more species disappeared, the greater the risk that the ecosystem would collapse. According to this theory, the conservation of nature was not because they possessed the yet unrecognized values of species or ecosystems, but because they were indispensable as an integral part of the ecosystem.

In short, the first two stages of the conservation of nature aimed at promoting the development of industries, while the third stage aimed at achieving sustainable development.

3.3.2 Construction of Nature Reserves For more than 30 years before the reform and opening up of China, progress in the conservation of nature was extremely slow. By 1978, 34 nature reserves had been constructed with a total area of 1.265 million hectares, which accounted for 0.13% of the country’s total land area. After the reform and opening-up, China’s efforts at the conservation of nature were enhanced significantly. By the end of 2014, the country had built 2697 nature reserves of various types and levels (excluding Hong Kong, Macao and Taiwan), with a total area of 1.507 million km2 , which accounted for 15.9% of the total land area and exceeded the world average of 12%. Among them, there were 428 state-level nature reserves covering 94.66 million ha, which accounted

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for 15.9 and 64.7% of the total number and area of nature reserves nationwide. A total of 28 nature reserves had joined the UNESCO World Network of Biosphere Reserves (WNBR), and more than 20 reserves had become part of the World Natural Heritage. The wild animal and plant species and typical ecosystem types under State protection had been preserved, and an in-situ network of biodiversity conservation focusing on the nature reserves had basically been formed. The main problems with the conservation of nature are that the authorities responsible for the management of nature reserves regard the residents of the surrounding communities as the object of their management, but those residents lack of the rights to know, to evaluate and to make recommendations regarding the nature reserves; the agencies responsible for assessing the social impact of nature reserves lack credibility; and the daily operating expenses of the authorities for the management of nature reserves are somewhat dependent on the natural resources within the reserves. The key to solving this problem is to consider the residents of the surrounding communities as the subject of management, so that the relationship between the nature reserves and the surrounding communities can be transformed from rivalry into a partnership of mutual trust, reciprocity and mutual benefit, in order to achieve harmony or resolve conflicts through joint management.

3.3.3 Forestry Construction (1)

(2)

(3)

Afforesting and closing hills for afforestation. Over the past 30 years since the reform and opening up of China, the efforts at afforestation and silviculture were steadily enhanced. By comparing the first national forest resources inventory with the eighth forest resources inventory, the coverage rate of forests increased from 12.70% to 21.63%. The forest area increased from 121.86 million ha to 208 million ha, with an increase of 70.7%. The total standing forest stock increased from 9.53 billion to 15.14 billion m3 , with an increase of 58.9%. The preserved area of man-made forest is 69.33 million ha, the stock volume of man-made forest is 2.48 billion m3 , and the area of man-made forest ranks first in the world. By 2020, the forest area had increased by 40 million ha in comparison with the situation in 2005, and the forest stock volume had increased by 1.3 billion m3 . Natural forest protection project. In order to eliminate the negative impact of forest logging on the ecological environment, China implemented a natural forest protection project in 1998. The implementation of this project effectively protected 56 million ha of natural forests, created 15.267 million ha of public welfare forests, and increased forest reserves by a net 460 million m3 . Projects for the construction of protective forest systems. In order to ensure land security, the Chinese government has carried out 10 major protective forest projects since 1978. The total planned area of the ten major projects is 7.056 million km2 , which accounted for 73.5% of China’s total land area, and covered the main ecologically fragile areas, such as areas affected by water

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49

and soil loss, sandstorms, typhoons, and saline and alkali. The total planned area of afforestation is 120 million ha. Project of restoring farmland to forest. The scope of the project includes 25 provinces and cities except Shanghai, Jiangsu, Zhejiang, Fujian, Shandong and Guangdong. A total of 14.67 million ha of farmland have been restored to forest, and 17.34 million ha of barren mountains and land have been restored to forests.

3.3.4 Progress in Grassland Protection China has nearly 400 million ha of various types of grasslands, which accounts for about 41.7% of the land area. The grassland ecosystem has been improved by measures such as grazing prohibition, the resting of grazing land, rotational grazing, grass planting and confined husbandry. In 2005 and 2013, the total output of fresh grass from natural grasslands nationwide was 937.8 million tons and 1055.8 million tons, respectively, and the livestock carrying capacity was 230.2 million sheep units and 255.8 million sheep units, with an increase of 12.5% and 11.1%, respectively. From Table 3.1, it can be seen that the grassland hierarchy in China in 2000 had deteriorated most significantly compared to the grassland structure in the 1970s, while the grassland hierarchy in China in 2013 was almost close to that of the 1970s. Table 3.1 Changes in China’s Grassland hierarchy Year

Levels 1, 2

Levels 3, 4

Levels 5, 6

Level 7

Level 8

1970’

9%

18%

33%

18%

22%

2000

4%

12%

13%

22%

49%

2009

7%

12%

19%

22%

40%

2010

8%

13%

26%

20%

33%

2011

7%

15%

29%

19%

30%

2012

7%

18%

31%

17%

27%

2013

6%

16%

34%

18%

26%

2014

6%

15%

34%

17%

28%

Note The main reason why the grassland hierarchy in 2014 was not as good as what it was in 2013 was the poor precipitation conditions in the grassland areas rather than overgrazing Source National Grassland Monitoring Reports from 2009 to 2014 and grassland survey data in the 1970s. The grassland hierarchy data in the 1970s have been cited from the research report provided by Ouyang Zhiyun, research fellow at the Research Center for Eco-Environmental Sciences, the Chinese Academy of Sciences.

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3.3.5 Protection of the Water Environment After many years of continuous efforts at the management of the water environment management and at wastewater treatment, the annual average concentration of the permanganate index in surface water dropped to 5.7 mg/l in 2008, and reached the Class III standared of water quality for the first time. It was 5.3 mg/l in 2009, 4.8 mg/l in 2011, and 4.0 mg/l in 2013, thus maintaining a continuous downward trend. The percentage of Class I to III water quality cross-sections in the total cross-sections of the seven major river systems increased by 41.7 percentage points, from 29.5% in 2001 to 71.2% in 2014. In the same period, the percentage of Class IV to V and inferior to Class V water quality cross-sections in the total cross-sections decreased from 28.3% and 42.2% to 19.8% and 9.0%, with a decrease of 8.5 percentage points and 33.2 percentage points, respectively (Table 3.2). It can be found from Table 3.3 that, except for artificial wetlands, the areas of all types of wetlands in China tend to decrease. This indicates that the wetland ecosystems tend to degrade. It should be noted that the total area of wetlands decreased by 21.4% between 1978 and 1990, and then to 69.4% between 1990 and 2000. In other words, it decreased by 21.4 percentage points in the earlier period and 9.2 percentage points in the latter period. The decrease in wetland areas occurred mainly during the period 1978–1990. This indirectly reflects the fact that the protection of wetlands in China has been strengthened and the effect has improved. Table 3.2 Change in the structure of water quality in China’s seven major river systems unit: %

Year

Class I to III water quality

Class IV to V water quality

Inferior to Class V water quality

2001

29.5

28.3

42.2

2002

29.1

30.0

40.9

2003

38.1

32.2

29.7

2004

41.8

30.3

27.9

2005

41.0

32.0

27.0

2006

40.0

32.0

28.0

2007

49.9

26.5

23.6

2008

55.0

24.2

20.8

2009

57.3

24.3

18.4

2010

59.9

23.7

16.4

2011

61.0

25.3

13.7

2012

68.9

20.9

10.2

2013

71.7

19.4

8.9

2014

71.2

19.8

9.0

Source Report on the State of the Environment in China over these years

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Table 3.3 Changes in China’s Wetland areas (1978–2008) unit: km2 , % Type

1978

1978–1990 Percentage to 1978 1990–2008 Percentage to 1978

Coastal wetland

13,104

11,463

Inland wetland

286,399 219,106

Artificial wetland 9792 Total area

12,453

309,295 243,022

0.87

9109

0.70

0.77

185,547

0.65

1.27

19,892

2.03

0.79

214,548

0.69

Source Niu Zhenguo et al.: The Changes in the Type of China’s Wetlands: 1978–2008, Chinese Science Bulletin, 2012(16)

3.3.6 Treatment of Water and Soil Loss The loss of water and soil is mainly distributed around the western provinces (municipalities and autonomous regions), including Xinjiang, Inner Mongolia, Gansu, Qinghai, Sichuan, Chongqing, Guizhou and Guangxi, and the amount of sediment flowing into the Yangtze River and Yellow River amounts to more than 2 billion tons per year. The area of comprehensive treatment for water and soil loss has increased from 20,000 km2 per year in the early 1990s to more than 40,000 km2 today. By the end of 2013, a total of 1.07 million km2 of water and soil loss had been treated nationwide. Each year, 1.5 billion tons of soil can be preserved, water storage capacity has increased by more than 25 billion m3 , and food production has increased by 18 billion kilograms.

3.3.7 Treatment of Desertification Since 2001, the average annual area under treatment for desertification has reached 1.92 million ha. At present, 20% of China’s sandy land has been treated to varying degrees. The area of sandy land decreased from 2.674 million km2 in 1999 to 2.624 million km2 in 2009, with a reduction of 50,000 km2 . It is important to note that the achievement of sandy land treatment is mainly reflected in the reduction in the degree of desertification, instead of the reduction in the area of desertification. Table 3.4 shows that the area of mild desertification increased from 540,400 km2 in 1999 to 665,800 km2 in 2009, with an increase of 125,400 km2 ; in the same period, the area of extremely severe desertification decreased from 700,600 km2 to 563,000 km2 , with a decrease of 137,600 km2 .

3.4 Existing Problems The problems in the treatment of the ecosystem can be summarized in the following three areas.

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Table 3.4 Changes in the degree of desertification in China Degree of Desertification

1999 Area (× 104 km2 )

2004 Percentage (%)

Area (× 104 km2 )

2009 Percentage (%)

Area (× 104 km2 )

Percentage (%)

Mild

54.04

20.21

63.11

23.94

66.58

25.37

Moderate

86.80

32.46

98.53

37.38

96.84

36.91

Severe

56.51

21.13

43.34

16.44

42.66

16.26

Extremely severe

70.06

26.20

58.6

22.24

56.30

21.46

267.41

100.00

263.62

100.00

262.38

100.00

Total

Source The 2nd, 3rd and 4th Desertification Prevention Reports of the National Forestry Administration of China

3.4.1 Emphasizing the Realization of Ecological Assets While Ignoring the Protection of Those Assets Generally speaking, the combination of ecological treatment and ecological utilization is not only correct, but also worth advocating. However, it is not advisable to have a conceptual preference for the realization of ecological assets. Having such a preference conceptually will ignore the necessity and importance of the measures of pure treatment to protect the ecosystems, and makes it difficult to do both well.

3.4.2 Emphasizing the Short-Term Goals While Ignoring the Long-Term Goals Ecological treatment can start with short-term goals, but they must be subordinate to the long-term goals, or at least compatible with the long-term goals. However, due to some officials’ eagerness to make political achievements, they tend to choose the temporary measures with quick returns, but are unwilling to choose the permanent measures with slow effects. Therefore, this leads to the problem of inconsistency between short-term and long-term goals.

3.4.3 Emphasizing the Top-Down Whiling Ignoring the Bottom-Up Due to the overemphasis on the government’s responsibility and the inadequate awareness of the need and importance of public and NGO participation in the ecological treatment, in reality, ecological treatment usually adopts a top-down approach

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and rarely a bottom-up approach. Ecological treatment plays a role in creating employment opportunities, but it is not enough to form an awareness of the need for ecological protection among the citizens.

3.5 Policy Suggestions 3.5.1 Making the Ecological Construction of Villages and Towns Part of the Overall Urban and Rural Development Planning, Achieving Urban–rural Coordination of Ecological Construction In recent years, the various rural areas are making plans for village and town construction. The government at all levels should seize this favorable opportunity to include the contents of ecological protection and treatment into those plans, and integrate them into the overall urban and rural development planning, thus achieving urban–rural coordination of ecological construction.

3.5.2 Seizing the Opportunities of Proactive Fiscal Policies, Incorporating Rural Ecological Construction into the government’s Scope of Expanding the Domestic Demand At present, expanding the domestic demand has become an important means for stimulating economic growth, and the State has been implementing proactive fiscal policies to that end. All rural areas should seize this opportunity to incorporate the projects of rural ecological construction into the government’s scope of expanding the domestic demand and put this work into practice.

3.5.3 Actively Introducing the Market Mechanism, Solving the Problem of Lack of Funds for Rural Ecological Treatment Ecological treatment is also a productive activity generating GDP that can be financed by the market mechanism. When the government has limited financial resources, it is all the more important to utilize the market mechanism rather than waiting until the government has the financial capacity to pay. Otherwise, this will further lead to missing optimal opportunities.

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3.5.4 Formulating a Policy of Subsidizing Organic Fertilizers and Comprehensive Utilization of Straw and Livestock and Poultry Manures, Cancelling the Subsidies for Fertilizers At the stage of food shortage, the policy of fertilizer subsidies for production, transportation and use is an important measure for promoting food production and maintaining a balance between food supply and demand. After the stage of food shortage, particularly when the long-term overuse of chemical fertilizers and pesticides causes serious negative impacts on the environment, this policy is no longer suitable. This part of subsidizing can be used to support the comprehensive utilization of straw and livestock and poultry manure, so it is appropriate to adjust the policy.

3.5.5 Setting up a Number of National Research Projects, Solving the Key Technical Difficulties in the Treatment of Agricultural Pollution Although agricultural pollution occurs in rural areas, those affected are by no means limited to farmers. The State should assume its due responsibility and make its due contribution to the control of agricultural pollution which has great negative externalities. To be specific, it should aim at the key technologies for the treatment of agricultural pollution, set up a number of national research projects, and solve this problem with the efforts of the whole country.

3.5.6 Establishing a Technological System of Release that is Suitable for Agricultural Environmental Protection In order to protect the agricultural ecological environment, a series of technological innovations have been developed in rural areas throughout the country. Unfortunately, due to the lack of an effective channel for the spreading of technology, the application of these environmentally friendly and appropriate technologies is not satisfactory. The relevant government authorities should establish a system for the release of technology that is suitable for environmental protection in rural areas, so that these technologies can be brought into full play.

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3.5.7 Regular Environmental Education and Training for Farmers, Laying a Base for Widespread Protection of the Rural Environment A training system for farmers has already been tentatively developed in China. It has been suggested that capacity building regarding environmental management should be carried out based on the training of employment skills, so that some villagers can acquire skills to monitor changes in the ecosystem and the environment, and this would lay a broad base for widespread protection of the rural environment.

3.5.8 Implementing the Policies of “reward for Treatment” and “reward in Lieu of Subsidy”, and Transforming from the Rural Communities Being Required to Carry Out Treatment to Their Willingness to Do so Despite the positive externalities of ecological treatment, the greatest beneficiaries are, after all, the residents in the treated areas, and this is the main reason why rural communities covered by ecological treatment are active in that treatment. In order to arouse their enthusiasm in ecological treatment, the policies of “reward for treatment” and “reward in lieu of subsidy” should be implemented.

Chapter 4

On the Transformation of the Growth Concept: Towards a Steady State Economy Jiahua Pan

Abstract China’s rapid and steady economic growth since the reform and openingup has led to a significant increase in China’s economy in its total size and per capita. The high speed of growth has aroused great interest in the future direction of China’s economy both at home and abroad, with divergent views and opinions on this topic: There are those who are optimistic about the continuation of the high speed, those who are pessimistic about an immediate collapse, and those who want to shift gears and make adjustments. China’s economic growth under the development paradigm of an ecological civilization cannot and need not follow the path in growth of the development paradigm of industrial civilization; a transformation in growth is inevitable. Accommodating to nature means respecting the boundary constraints of harmony between man and nature, and avoiding all kinds of efforts to sustain or promote growth that goes against the law and beyond the limits. Moreover, economic growth within the framework of an ecological civilization paradigm must be real growth, ecologically harmonious growth. Thus, the direction of China’s economic transformation can only be an adjustment to the structure, improvement in quality and working towards a steady-state economy in harmony with man and nature. Keywords Economic growth · Transformation · Steady-state economy

4.1 Growth Trend and Momentum From the founding of the People’s Republic of China to the early 1970s, China’s economic growth experienced ups and downs, from an economic decline of 27.3% in 1962, to the high growth rates of 18.3% in 1965 and 19.4% in 1971. In the 1970s, China’s economy fluctuated steadily at a medium speed, but in 30 years from 1980 to 2010, it sustained an explosive growth of nearly double digits. What is the future trend for China? J. Pan (B) Institute of Urban Development and Environment, the Chinese Academy of Social Sciences, Beijing 100028, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_4

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In 2005, Justin Yifu Lin wrote an article1 claiming that China’s economy could maintain a rapid growth rate of 8–10% for 30 years, and overtake the USA to become the world’s largest economy by 2030. In 2010, the World Bank suggested and cooperated with the Chinese government on launching the “China 2030” study,2 which considered that the economic growth rate over the next 20 years would be one-third lower than the average growth rate of 9.9% over the past 30 years, at an average annual rate of 6.6%, thus allowing China to edge into the club of developed countries and overtake the USA in terms of economic size. The benchmark scenario of the Development Research Center of the State Council3 assumed that the economic growth rate would be 6.6% from 2010 to 2020, 5.4% from 2020 to 2030, 4.5% from 2030 to 2040, and 3.4% from 2040 to 2050. The scenario of economic growth for China 2050 set by Bai Quan et al.4 pointed out that China could grow at an annual average rate of 8.0% from 2010 to 2020, 6.0% from 2020 to 2035, and 3.8% from 2036 to 2050. Relatively speaking, the foreign institutions were more conservative about China’s future economic growth rate. For example, the International Energy Agency predicted an average annual growth rate of 5.7% during the years from 2000 to 2010, 4.7% from 2010 to 2020, and 3.9% from 2020 to 2030. A 2003 study by Goldman Sachs reported that China would grow at an average annual rate of 4.35% from 2015 to 2030, and 3.55% from 2030 to 2050.5 The pessimists who badmouthed China were represented by Gordon Chang, who wrote a book as early as in 2001 declaring that China was on the verge of collapse.6 According to the country ranking statistics of the World Bank, the economy of China ranked 12th after India in 1980; 10 years later in 1990, it was barely overtaken by India and ranked 11th; in 2000, it rose to the 6th place; in 2010, it overtook Japan to become the second largest economy. China’s per capita GDP ranked around 150th in 1980, remained at 136th in 2000. In 2010, it was close to the 100th place, but three years later, in 2013, China’s per capita GDP had already ranked 75th. However, on a per capita basis, China was only 46% of the world’s average, 12.16% of that of the United States, and 14.22% of that of Japan. In 2013, if calculated by the exchange rate, the economy of the USA accounted for 22.43% of the global economy, while China’s economy was only 12.34%, which was 10 percentage points lower than that of the USA. If calculated by the purchasing power parity, the USA accounted for 17.06% of the world’s aggregate, but China for 16.08%, with a difference of less than 1 percentage point. According to the projection of the Economist Intelligence Unit,7 with respect to the purchasing power parity, China’s economy would overtake that of the USA and become the world’s largest 1

Lin (2005). Joint Research Team of World Bank and the Development Research Center of the State Council, China 2030: Building a Modern, Harmonious, and Creative High-income Society, 2011. 3 Mengkui (2006). 4 Bai et al. (2009). 5 Ibid., p. 644. 6 Chang (2001). 7 The Economist Intelligence Unit, cited from Morrison (2013). 2

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economy in 2017. In October 2014, the International Monetary Fund released its annual World Economic Outlook, which used the purchasing power parity to account for national economic aggregates in its database, indicating that China’s economy would exceed that of the USA by about 200 billion US dollars in 2014. It meant that China would become the largest economy three years earlier than the projection of the Economist. However, if calculated by the exchange rate, China’s economic aggregate was roughly equal to that of the USA in 2030.8 However, on a per capita basis, China would be only 32.8% that of the USA by 2030, even calculated by the purchasing power parity. Except those “China collapse” theorists, both Chinese and foreign studies suggested that China has reached a period of transition characterized by a declining economic growth rate, but with the rising per capita income and economic aggregate. The direct or apparent cause of this transition was the changes in the power source of economic growth. China’s economic growth was often said to be driven by a “troika” of export, investment and domestic demand. The opening up of China’s economy to the outside world first took place in the coastal areas, because raw materials and markets were external, and the coastal areas had geographical advantages. In the twenty-first century, China joined the World Trade Organization and was quickly blended into the global economic integration process, the low-cost labor and competing preferential land supply showed that it had strong competitive advantages, and the foreign trade became the engine that drove China’s economic growth. To some extent, it was the outward-oriented economy that drove investment. If foreign direct investment led to industrial expansion, the massive investment in infrastructure was to make foreign trade more convenient. China had almost no highways and extremely limited urban infrastructure in the 1980s, and the sewage treatment and underground rail transit had hardly started to develop in large cities. China’s high savings rate and strong administrative powers made energy, transportation and urban infrastructure affordable and efficient to implement. Relatively speaking, the fact that domestic consumption is a weak driving factor of the economy was closely linked to China’s urban–rural dual system and the institutional arrangements for the distribution of income and livelihood security. Since the traditional governance methods could not provide sufficient security, people had to suppress their consumption impulses and “frugality” was regarded as a virtue, so that growth could only be achieved through exports. China’s system of income distribution had multifold dual institutional arrangements, the first one of which was the urban/rural duality. The disposable income of urban residents was more than three times that of rural residents, and this figure included hundreds of millions of people who had been transferred from agriculture to urban areas; because less than 40% of the urban population was registered under the household registration, over 60% of the population had a seriously low level of income and consumption. Second, the duality of the state-owned economy and the private economy. State-owned enterprises were mostly monopolistic, and their regular employees had a guaranteed income, medical care and housing, while private enterprises not only lacked medical care and housing 8

Subramanian (2013).

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security, but they also earned less than one-third the income of the employees in stateowned enterprises. This resulted in a lack of consumption intention of employees in the state-owned economy and the lack of consumption ability of employees in the private economy. China transitioned from a traditional agricultural society into a modern industrial society, with low levels of medical care, education, pension and unemployment security, and a low degree of social coverage, so the limited income was saved for self-security. The American scholar Dent argued that there was a correlation between population fluctuations and economic fluctuations, the dynamic changes in population were an inherent reason for changes in economic growth patterns, and the former decided the latter.9 From the perspective of a person’s life cycle, Dent found that spending power reached a peak around the age of 46, thus the peak of consumption always occurred 46 years later. 1897–1924 was the peak period of childbirths in the United States, and 46 years later, 1942–1968 was the period of rapid economic growth. The “baby boom” began in 1937, peaked in 1961, and the United States experienced an unprecedented economic boom from 1983 to 2007, which was also 46 years later. After the Second World War, Japan’s economy grew at an astonishing rate and was hailed as the “Japanese miracle”. On the surface, the government’s industrial supporting policies helped companies grow rapidly, free from harsh international competition, and thus they were able to compete in the exportation of high value-added goods. But in fact, Japan’s economic growth was closely related to the population boom, except for a harsh immigration system that kept the boom a little later than 46 years. This did not seem to be a coincidence. Demographics have told us that human economic behavior is cyclical, and the long-term monitoring data of the sales of 600 goods in the United States indicated that: young couples married at an average age of 26 and apartment rentals peaked accordingly, they gave birth to children and bought their first home around age 31, the couples aged 37–41 purchased the largest home of their lives when their children were in their teens, the peak expenditures for children’s college tuition costs occurred around the age of 51 for parents, and couples would buy luxurious cars at the age 53… Age 41 was the peak of borrowing, age 42 consumed French fries the most, but age 46 was the highest point of consumption for a lifetime. This meant that: the boom in births plus 46 years was the high point for the next round of prosperity. Of course, this cycle is not absolute, because massive immigration might also bring rapid demographic changes; the technological progress could break the cycle, but it took a while to translate into productivity, so the influence would not be immediate; and the longer lifespans would postpone the peak of consumption. Why could the population growth drive the economic growth? Because an increase in population led to the increase in consumption, stimulate advances in production, promote market division of labor and specialized collaboration, and offer more possibilities for the application of new technologies. Obviously, the external demand is not infinite but subject to international competition, hence there is volatility and uncertainty. The investment is a long-term process, but there is a saturation point for investment in infrastructure and durable consumer 9

Dent (2014).

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goods such as housing and cars, and once the saturation point is reached, the investment becomes maintenance, depreciation and renewal. The consumption increases with the improved income distribution and social security, but the population peak also causes the aggregate consumption trends to encounter a “ceiling”. The economic growth of developed economies has experienced a process from high to low and then becoming stabilized. The process of China’s economic growth, if to avoid an economic crisis and a “hard landing”, must actively make adjustments to enter the new normal of growth.

4.2 Triple Constraints of Epitaxial Growth The changes in the driving mechanism of China’s economy is not only because of the driving factors themselves, but more importantly or fundamentally, the changes in these driving factors, which are related to the external constraints on the harmonious development of man and nature and primarily reflected in three areas: natural factors, demographic factors and capital stock. The unity of man and nature must first recognize that nature is important, and then it can be respected and responded to. The natural factors are a physical boundary. Technological advances can relieve a part of the tight constraints, but for some boundaries, such as the surface area of the Earth, it is difficult to imagine that current technology can change the structure and volume of the Earth. Even the most advanced and effective technology is limited in the extent and rate of relief in a given time and space. Thus, growth is constrained by the rigid constraints of nature, which are external pressures on economic transformation. These pressures first derive from the deterioration of and damage to the living environment. In the 1950s, the photochemical smog that formed over London due to air pollution was beyond China’s imagination then. After the reform and opening-up, the credo and slogan of many regions in China was “no industry, no wealth”. The development of industrial manufacturing that caused pollution led to rapid economic growth, thus many regions had no thresholds for the investment attraction and became the “safe havens” for polluting enterprises, and so these areas attracted a large number of polluting enterprises to China. If the sources of water nearby became polluted, people got water from farther away; if shallow groundwater was no longer available, they turned to deep groundwater; if deep groundwater was not available, they diverted water over long distances; if tap water became undrinkable, people turned to mineral water; if the production of mineral water was limited, people consumed energy resources to purify the befouled water and industrially produce bottled pure water for drinking. The cost increased, but people’s income also rose and they had the ability to pay for it, so they did not mind. However, the severe smog that began to appear in 2011 in highly populated regions of the country changed the rigid constraints on nature: we cannot bottle air, which is more important than water, and we need to breathe fresh air every second.

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The second dimension of constraints of nature is the soaring prices and rapid depletion of stocks of non-renewable resources, especially fossil fuels, which were not believed to have been depleted until the first oil crisis in the early 1970s. The price spike was an alarm signal for human beings, but it was believed that the supply of non-renewable resources was a price issue and that technological advances could be made to explore and discover new reserves, improve efficiency and reduce demand. As a matter of fact, what people have followed over the past 40 years was just such a way of responding. China, because of its underdeveloped automobile industry, was not responsive to the rising price of oil, but considered the exports in large amounts as an opportunity to get foreign exchange. As a result, China, which was short on oil resources, was a net exporter of crude oil until 1992. China exported large quantities of coal in the long term, which it considered to be abundant. In 2010, China began to massively import coal, with the importation of more than 300 million tons of raw coal in 2013. The mining of exhaustible resources is not just an issue of depleting resources. The problem of collapsing coal mining areas and the destruction of underground water systems are beginning to cause ecological disasters. The shale gasoline seems to bring a new hope for the development of fossil energy, but the massive consumption of scarce water resources and the serious pollution of groundwater are getting more kicks than halfpence from the perspectives of the environment and of resources. On the one hand, the efficiency of the utilization of resources is improving, but the rebound effect of technology and the expanding scale of demand are increasing the total consumption of energy. On the other hand, the advances in prospecting and mining technology are rapidly pushing towards the limits of the resources. Not only have the tentacles of mine prospecting spread to all corners of the land and sea, but also some low-grade minerals have been exploited. The third constraint is renewable resources. Renewable resources can be replenished, but the speed and total amount of their replenishing is limited. To a large extent, the idea of the ecological civilization is to maintain and improve the stock, rate and output of renewable resources. These resources are land, water, and systems of biological production that have linked properties. The land area is constant and cannot grow, but its quality or productivity can be enhanced by improvement or decayed by degradation. The water resources are recyclable, but their quantity and distribution in space and time are not constant. Water and soil loss can decrease the water-holding capacity of sources of water, and the degradation of the ecosystem can alter the water cycle. If we “fish out by pumping off the water” and “burn the forest for farming”, we destroy productivity and collapse the system. The security of food supplies, therefore, depends not only on the quantity of land, but also on the quality of land resulting from resource linkages. The productivity of the land with a certain level of output is not only the basis for human survival, but also has the function of supporting the biodiversity and sustaining the functioning of the ecosystem. The natural disasters in the history of China have been mostly the results of severe food shortages caused by a sudden drop in the land’s natural productivity due to extreme weather events. The restoration of farmland to forests, grassland and lakes in the late 1990s in China was an effort to restore the natural productivity.

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If the natural factors are an external limiting quantity, the biological needs of human beings are an internal constraint. The quality of food, clothing, housing and transportation can vary tremendously, but the quantity may be limited. Taking nutritional intake as an example, there will be malnutrition if the daily calorie intake is too low, and over-nutrition if it is too high. Clothing also changes according to the climate change and physical conditions. In many cases, being “natural” means “quality”. For example, if one is given the choice between natural ventilation and an artificial ventilation system, natural ventilation is more appropriate for people who are part of nature. An ecological lifestyle is not about being more modern or more artificial. Malthus’s “principle of population” or the “population boom” theory in the 1970s attempted to prove that the number of the population would increase geometrically, while the natural productive output would increase arithmetically, that the latter would never catch up with the former, and that eventually, the population growth would eat away the fruits of development. In reality, geometric growth is insidious: a pond with lotus leaves doubling every day, for example, will be completely covered in 30 days, suffocating other life, but we will not notice the danger until the 29th day, when the leaves cover only 50% of the pond. However, this tragic consequence of population increase does not necessarily become an inevitable threat in the modern, post-industrial or ecological civilization societies. The population in the developed countries has become stabilized, and some countries that have entered periods of post-industrial societies are already experiencing the long-term negative population growth. China’s “one child” policy, which was vigorously followed in the late 1970s, decreased its annual population growth rate from over 2.5% in the 1970s to less than 0.5% in the early 2010s. After more than 30 years, according to the statistics of the National Population and Family Planning Commission, by 2011, the one-child policy had covered approximately 35.4% of the total inland population; the “one-anda-half-children” policy covered 53.6% of the population; the “two-children policy” covered 9.7% of the population (some ethnic couples; both of the members of the couple are only children and they can also have two children); and the three-children policy covered 1.3% of the population (mainly Tibetan and Xinjiang ethnic nomads). The 6th national population census conducted in November 2010 revealed that the annual average population growth rate was 0.57% from 2000 to 2010, which was decreased by nearly a half compared with the annual average growth rate of 1.07% from 1990 to 2000. In 2013, the proportion of people aged 60 and over in China reached 13.26%, China was already an ageing society. The intermediate scenario of population projections revised by the United Nations in 201010 indicated that China’s population would peak at no more than 1.4 billion in 2025, fall to less than 1.3 billion in 2050 and further reduce to 940 million in 2100. In November 2013, the Third Plenary Session of the 18th CPC Central Committee clarified the decision to relax the population policy, and most families could have two children. However, the

10

United Nations, Department of Economic and Social Affairs, Population Division (2011). World Population Prospects.

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actual social reaction showed that the relaxation of the birth policy would not affect the long-term demographic trend. Since the Industrial Revolution, the capacity to and the competency for creating material assets were greatly enhanced and rapidly expanded due to technological innovations and advances in engineering means. These material assets included railways, highways, modern logistics ports, airports, large civilian buildings, energy service facilities, and large water supplies, sewerage, and sewage treatment facilities. Traditionally and historically, China’s buildings were characterized by adobe structures with a poor quality of construction and short service life, and thus had a limited inventory as physical assets. The three famous cultural buildings in the history of China—Yueyang Tower, The Yellow Crane Tower and The Pavilion of Prince Teng, were destroyed by fire or natural damage, and were always rebuilt within a short period of time. The technological means under the industrial civilization utilized reinforced concrete, which could have a life expectancy of more than one hundred years. For example, the Yellow Crane Tower in Wuhan11 was initially built in 223 A.D. during the Three Kingdoms era, repeatedly built and abandoned, and in the Ming and Qing dynasties alone, it was destroyed seven times, rebuilt and repaired ten times. The last adobe structure under the agricultural civilization was built in 1868 and destroyed in 1884. It existed only for 16 years, and the only remains after the destruction of the tower built in the Qing dynasty was a bronze cast yellow crane roof. In October 1981, the Yellow Crane Tower was rebuilt by using modern engineering technology. Compared with the 3-storey tower 100 years ago, the new tower was 5 storeys high for a total height of 51.4 m, supported by 72 columns and with a construction area of 3219 m2 , it had a larger scale, better fire and earthquake resistance and low maintenance needs. After the World Bank12 compiled data on the total length of railroads, since 1980, the United States, the European Union and other developed countries almost did not invest in extending the railway mileage, and in many countries such as the United Kingdom, the railway mileage decreased from 18,000 to 16,000 km in 2012. However, in China, the length of railway operations increased from 50,000 to 63,000 km over the same period. Thus, there was a huge difference in boosting economic growth between the investment need for maintenance and renovation and the new construction when the stock was already close to saturation or over saturation. In European countries entering the post-industrial era, after post-war reconstruction, the stock of real estate assets could largely meet or even exceed the demand, and the stock of real estate assets was already saturated, so there was no need for large-scale investment, and housing prices were unlikely to soar or exceed the payment ability of the working class. There was also a saturation point for the physical stock of other consumer durables. For example, car ownership per 1000 people in developed countries has remained essentially constant or has even declined over the past decade or so. Car ownership per 1000 people in the United

11

http://baike.baidu.com/subview/1981/11187512.htm?from_id=3558210&type=syn&fromti tle=%E6AD%A6%E6%B1%89%E9%BB%84%E9%B9%A4%E6%A5%BC&fr=aladdin. 12 http://data.worldbank.org/indicator/IS.RRS.TOTL.KM.

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Year Population

US$/person

Fig. 4.1 Trends in change in Japan’s annual average population, economic growth rate (%), car ownership (cars per ten people) and GDP Per Capita (10K USMYM, exchange rate, current prices), 1962–2013. Source The World Bank Database

States dropped from 473 in 2000 to 403 in 2011, and this indicates that household car ownership in the United States was already saturated. Japan’s economy has remained stagnant since 1990, and it was considered that the past 20 years was a lost period of 20 years for Japan. Figure 4.1 presents the changes in Japan’s average annual population, economic growth, annual GDP per capita, and car ownership over the past 50 years according to the World Bank data. Japan’s economic growth declined from 10% in the 1960s to around 5% in the 1980s, and then has plummeted to near-zero or even negative growth from 1990 to the present. It is clear that postwar industrial expansion and urbanization were closely related to the growing saturation of the accumulation of material assets in Japan. The average annual rate of population growth fell from 1% in the 1960s to 0.3% in the 1990s and has gone to a negative growth since 2006, with no Malthusian trap and no signs of population explosion, but a natural self-imposed limit. According to the above analysis, it can be seen that the development paradigm under an industrial civilization overcomes and avoids low productivity and the Malthusian population trap of the development paradigm under an agricultural civilization, material wealth is greatly enriched and rapidly accumulated, and economic growth reaches a “ceiling”. High productivity, at the expense of material consumption and pollutant emissions, has approached and even exceeded the environmental carrying capacity of the planet; when material life is secured, diseases are under control and the degree of health greatly improves, the population will not explode, but will become stabilized or even decline. Population growth in industrialized countries has gone beyond the peak. Once the material wealth needed and pursued by human beings becomes saturated in the post-industrial era, the room for further expansion will be restricted by both environmental space and social demands, thus leaving no room for an increase.

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Therefore, the limits of growth under the development paradigm of industrial civilization do not come from the catastrophe formed by the population explosion of Malthusianism, but rather from the rigid physical boundaries of the earth, the capping of the population and the saturation of the stock of physical assets. Under these triple constraints, industrialized expansionary growth becomes impossible or unnecessary after entering a post-industrial era. What kind of growth is needed or achievable for socio-economic development, given the triple constraints on the growth of industrial extension?

4.3 Ecological Growth Faced with an economic downturn, the government always has a firm line of thought under the development paradigm of industrial civilization that states: “We need growth, not recession”. Behind this immovable thought about economic growth, there is an odd logic: growth means correct policies, while recession means wrong policies. Therefore, we need only growth, not recession. This kind of mindset with growth at its core is deeply entrenched in the concept of industrial civilization. However, for the developed countries entering a post-industrial era, this “growth-stimulating” panacea does not work, and the results are actually counterproductive. When an economic cycle comes, the only way to shirk responsibility is to cover it up. The only way to cover it up is to increase government investment, which results in a reduction in the overall social efficiency. Due to the increasing importance of the government in economic operations, the degree of centralization improves, which not only suppresses private creativity, but it also leads governance along the wrong path. Forceful government intervention can only be effective in the short term, but it cannot be sustainable. By employing the institutional mechanisms of industrial civilization, the government requires stability, absolute equality, security and legitimacy of governance from the market, but this is sacrificing the future of temporary peace. The government can invest more because its capacity for debt is unparalleled, but the debts have to be repaid, either by exploiting the next generation or by diluting it with quantitative easing—the money is worthless and the debts become relatively small. It also spends tomorrow’s money to do today’s work. Each time, an economic setback means eliminating old productivity and making room for new productivity. Only by dispelling the years of accumulated ills in a concentrated manner, can the next round of development be realized. They do not recognize the market cycle, they rely on debts to postpone the problems, and imagine an infinitely high-speed economic growth. The abused public power cannot accept failure, but would rather cover up the mistakes with bigger mistakes. That is why the policy of “quantitative easing” was introduced. In the name of stimulating growth, a large amount of money is poured into the market. The generation whose consumption was stimulated is getting old, and the next generation will grow up and lead to new growth. But the problem is that “quantitative easing” has increased the cost of living dramatically,

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and young people have no hope, so they have no choice but not to get married or have children. This not only suppresses this round of development, but the next round of development as well. Although the capital of the old generation was increased, consumption was not increased, and wealth was obtained in vain. In the 1980s, Japan’s economic strength increased significantly with promising economic prospects, so its purchasing power became prominent in the world. The Japanese people also seemed to be optimistic about the growth, even making the prediction or ambition of buying the United States. However, in 1990, the bubble burst abruptly. The dream was not yet fulfilled, and the people of Japan were looking forward to high growth. Since the early 1990s, the Japanese government has been implementing a monetary policy of a low or even zero interest rate, but it has not stimulated much growth. The policy of quantitative easing adopted by the United States after the 2008 financial crisis was not effective either. The “strong” stimulus of RMB 4 trillion in China after the 2008 financial crisis was still hardly able to be fully absorbed five years later. This means that the growth pattern under an industrial civilization is staged. Once it has crossed the stage of industrialization, it must be transformed in order to seek a new growth paradigm. The United Kingdom was the cradle of the Industrial Revolution and the first country on earth that completed industrialization and entered a post-industrial era. Its level of urbanization was close to 80%, so there was little room to rely on the massive urbanization investment to secure and stimulate growth. Due to the relatively saturated stock of assets such as infrastructure, houses and cars, and a relatively stable population, the UK’s domestic market was limited, and exports were not competitive due to high labor costs. As a result, the UK long ago stopped seeking economic growth through industrialized outward expansion by high resource consumption and high input. During this period, its forest coverage was increasing, that is to say, the UK did not engage in urban expansion and industrial development to maintain growth; instead, more land was used for the conservation of nature and the building up of forests. Then, the UK transformed its growth pattern, characterized by an adjustment of its economic structure. In 1990, the tertiary sector accounted for only 66.6% of the national economy, but by 2013, the share of the tertiary sector had risen to 79%, with an average increase of almost 1 percentage point per year. In the same period, the share of the secondary sector fell from 31.8 to 20.3%, and almost all of the room for industrial restructuring came from a trade-off between the secondary and tertiary sectors (see Fig. 4.2). Japan entered a post-industrial era later than those earlier industrialized countries, but its process of urbanization was a better indicator for explaining the problem. The UK’s level of urbanization was near saturation in 1960 and has not increased since then. Japan’s level of urbanization in 1960 was only 63.3%, which was 15.1 percentage points lower than that of the UK. With a forest coverage of 68.4%, it would be possible for urban development and industrial expansion to completely transform the forest land into industrial or urban land that could be used for economic growth. However, when Japan’s level of urbanization increased from 77.8 to 92.3%, its forest coverage not only did not decline but increased by 0.2 percentage points in this period. Similarly, Japan’s industrial structure underwent dramatic changes, with the share

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Year

Forest coverage Proportion of industrial sector

Proportion of tertiary sector

Urban population

Proportion of agricultural sector

Fig. 4.2 Change in the trends of the UK’s economic and social pattern and environment, 1960– 2013. Source The World Bank Database

of the service sectors rising from 64.7 to 73.2%, and the share of the secondary sector declining from 33.4 to 25.6% in the same period in such an economy with strong industrial competitiveness and a highly developed manufacturing sector (see Fig. 4.3). The UK and Japan, with an increasing forest coverage and controlled environmental pollution, have completed their urbanization process and have obtained transformation of their industrial structures. In a sense, this can be said to be a kind of ecological transformation. Although they grew at a low speed, the level of social security and the welfare of the nationals did not decline, there was even an increase in the national income per capita to some extent, so it is an ecologically friendly growth. Then, what are the characteristics of ecological growth? First, the economy grows at a low speed, or sometimes even negative, but this kind of growth avoids the ups and downs in a toss-up type of development, and the economy remains stable. Second, the natural environment is further improved and natural assets are continually increased in value. In both the UK and Japan, the expansion of forest areas, which have the highest primary productivity and biodiversity in the terrestrial ecosystems, is one example. Third, low or even negative economic growth and the reduction in industrial and urban land areas have not led to a decline in the quality of life of the people, but an improvement. Fourth, it is consistent with the triple constraints of the stock of natural assets increasing, the stock of physical assets approaching saturation and effectively maintained, and the autonomous constraint on total population is realized, thus escaping the Malthusian “population trap”. Fifth, ecological growth

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Year

Urban population

Forest coverage

Proportion of secondary sector

Proportion of agricultural sector

Proportion of tertiary sector

Fig. 4.3 Change in the trends in Japan’s industrial structure. Source The World Bank Database

must be real growth, not spurious growth that does not create assets. There will be GDP and growth if a building is built today, demolished tomorrow and rebuilt the day after tomorrow, but this is a futile kind of growth, toss-up growth, not real growth, because there is no formation of physical social assets. However, it is important to note that the per capita fossil energy consumption and carbon emissions in developed countries are much higher than the amount of carbon budget of the allowable emissions that can protect the global climate, indicating that the patterns of consumption patterns in developed countries, at a global level, exceed the environmental carrying capacity and are not yet full ecological growth. For China, which is still in the middle and late stages of industrialization, there are two options: first, to complete the process of industrialization step by step, and implement the transition after the whole society enters the post-industrialization stage of development; second, to transition in the process of industrialization simultaneously and achieve ecological growth. As a late-developing emerging industrialized country, the resource and environmental constraints do not allow us to follow the path towards industrial development of developed countries. On the one hand, we have to continue the process of industrialization and accelerate the accumulation of material wealth, so that the physical assets can approach the saturation level as soon as possible; on the other hand, we must apply the concept of ecological civilization to transform and upgrade the traditional model of industrialization. The GDP-only theory makes us direct everything towards economic growth. Both the eastern coast and the central and western regions consider that there are not enough quotas of industrial and urban land, and the spreading urban development and land enclosure in mega-industrial parks is hindered. This objectively requires the internal expansion of reproduction and the abandonment of the traditional path

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of external expansion. We must improve economic and ecological efficiency, respect the boundary constraints of the natural environment’s carrying capacity, incorporate the transferred agricultural population into the city’s integrated development, and achieve social justice. This is precisely the transformation and upgrading of the production and lifestyle of an industrial civilization with the concept of ecological civilization. First of all, the industrializing economies and post-industrialized economies are not exactly the same in terms of growth speed. China’s infrastructure and other physical assets are far from saturation, so our growth speed is higher than that of developed countries. This does not mean that our economic growth is not ecological growth, but the key is whether it is real growth. Real growth is reflected in two aspects: first, whether there is a real accumulation of physical assets, and second, the cost of resources and environment. The resource and environmental costs of villages in the expansion of many big cities may not be very high, but these buildings are unplanned, of low quality, with mismatched infrastructure, so they cannot form real physical assets and will be demolished and rebuilt sooner or later. Due to China’s unbalanced economic development, its growth need not be identical across regions. For example, the eastern developed regions are more obviously constrained by the “triple constraints” and, therefore, grow at a slower speed than the central and western regions. Moreover, the asset stock and environmental quality of the natural environment have improved. Since China’s ecological environment is fragile with a relatively limited carrying capacity, the process of industrialization needs to consider not only the reduction of the environmental damage of growth, but also the improvement of environmental growth. Next, social justice needs to be achieved. If growth cannot benefit the general population and the poor, common prosperity cannot be achieved, there will be social instability, and this instability will pose threats to both natural assets and the physical assets accumulated as a result of development. This is why the higher the level of development, the more equitable the social distribution, and the Gini coefficient is much higher in less developed countries and those in the middle-income trap than in developed countries. This means that ecological growth is also about growth for people, not only for the few. Finally, ecological growth must be growth that is in harmony with and respectful of nature. Many cities use the technology of modern industrial civilization to build skyscrapers, which can create growth and the accumulation of physical assets, but those tall buildings require the consumption of more ecological assets to maintain and operate, and are not actually a development that is in harmony with nature.

4.4 Steady-State Economy Economic growth under an ecological civilization seeks to be ecological growth and eventually leads to a steady-state economy. There are two ways to achieve the socalled steady-state economy. One is active transformation and the other is passive transformation. Muir’s ideal steady-state economy is an active choice; while the

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steady-state economy argued by Daly is a kind of passive compliance under boundary constraints, which should also be considered as a choice in respect of nature; the Malthusian or Meadows constraint is a passive and helpless dynamic equilibrium, which is actually a non-steady state. China’s millennia-long agricultural economy has certain steady-state properties, but it is mostly a passive adaptation and grows with advances in agricultural technology and social stability, so it is a fluctuating steady-state. Due to low productivity, a low quality of life, and a lack of material wealth, it is clearly not the steady-state economy that Muir ideally seeks. More often than not, we consider it as a dynamic stability with certain Malthusian properties. After its founding, China vigorously promoted industrialization and became a developing economy with an outwardly expanding growth. Despite fluctuations, the Chinese economy has been growing (Fig. 4.4). After more than 30 years of rapid growth following the reform and opening-up, China has accumulated a certain amount of material wealth; however, it is still far from the level of developed countries, and its expectations of high economic growth are still very strong. However, due to the rapid depletion of environmental carrying capacity and natural resource stocks, the traditional model of development is being questioned. The number of cars owned per 1,000 people in China has increased from fewer than 10 in 2000 to nearly 100 today. The accumulation of physical assets is fast. Although the rate of car ownership is only a quarter of that of developed countries, China’s dependence on crude oil exports exceeds 60%, and urban traffic congestion and smog are severe, indicating that it has reached its capacity limit. On the other hand, China’s pattern of demographic development has changed dramatically, and the Malthusian population trap, which was widely feared in the 1970s, has gone far away from China. Moreover, China’s population will reach a peak around 2025, which is 15 years earlier than the peak predicted 10 years ago, with a population about 20% smaller. By 2100, China’s population will have decreased by about one-third of what it is today.

Year Population growth

GDP growth

Cars/100 persons

Fig. 4.4 China’s economic transformation: towards a steady-state economy

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It is somewhat contradictory information. On the one hand, there is still some room for material wealth accumulation in China; on the other hand, the rigidity of natural environmental constraints is becoming more and more evident, and the limits of population self-restraint are nearing. If Japan’s trajectory of growth is anything to go by, it was a high growth rate of 10% for nearly 30 years from 1950 to 1970, going to a moderate growth rate of 5% during the adjustment or transformation period in the 1980s, and to near-zero growth since the 1990s, transforming from a rapidly expanding economy to a steady-state economy. Japan’s rate of population growth in the 1980s was roughly comparable to China’s current level, at around 0.5%; it was around 0.3% in the 1990s when it entered the near-zero growth period; and it declined further after entering the twenty-first century, and has experienced negative growth since 2006. Although there is a certain degree of relaxation in China’s population policy and the pattern of demographic change may be slower than that in Japan, the overall trend in the development of China’s population is similar to, and the speed and scale of population aging is faster than that of Japan. In particular, for tens of millions of families who lost their only child, they do not need to accumulate and consume quite a few material assets. In this sense, Japan’s economic shift to near-zero, but quality, growth has implications for China. In such a scenario, the downward trend that China’s economy is facing is a normal trend, or a necessity. It is a normal phenomenon for Japan’s economy to steeply halve its growth rate from 10% in the 1970s to about 5% in the 1980s, so there is no need to make a fuss if China’s economy drops to 5% during the 13th Five-Year Plan (2016– 2020). It is not surprising that China’s growth rate will fall further to 3% or below as we enter 2020. If that is the case, we are not facing a downside risk of economic growth, but an inevitable shift from high speed to low speed and then towards near-zero growth. What we need to do now is not to preserve the growth speed, but the quality of growth, to make sure that economic growth is real growth, a kind of growth with accumulation of material wealth, but not a toss-up. In addition, or perhaps more importantly, we need to ensure social justice. Japan’s economic growth transition was very short-lived and lasted only 10 years, and the growth rate dropped steeply from about 10% to a near-zero level. One of the main reasons for the absence of social unrest is the relatively fair distribution of income in Japan, where the Gini coefficient is at a relatively low level among developed countries. In China, due to the historically formed urban–rural dual structure, the dual structure of household register and nonhousehold register within cities during the rapid economic growth after the reform and opening-up, and the dual system of a monopolistic high-income state-owned economy and a competitive relatively low-income private economy, these dualities seriously prevent the proceeds of the economic growth from benefiting all people in an equitable manner. This makes Chinese society exhibit a certain degree of vulnerability, and social stability becomes a problem if there are large fluctuations in economic growth. Finally, it is important to protect the ecological environment. Near-zero growth is actually a kind of ecological growth, where economic growth is exchangeable with the growth of natural productivity of the ecosystem, because what we consume is

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the net growth of the ecosystem, without consuming the stock of natural assets of the ecosystem. Protecting the ecosystem is protecting our home and the basis for economic growth. Thus, any paradigm of production and life that destroys nature, poisons the environment, and harms the ecology must be strictly banned. China’s demographic trend and resource environment provide internal and external conditions and pressures for our growth transformation. At present, tens of millions of families who lost their only child and a large population that has become an aging population after 2020 seek not the accumulation and possession of material assets, but a beautiful ecological environment and basic social security. The development towards a steady-state economy thus becomes conscious and inevitable.

References Bai Q, Zhu Y, Xiong H, Tian Z (2009) China 2050 economic and social development scenario. In: 2050 China energy and CO2 emission report. Science Press, p 893 Chang G (2001) The coming collapse of China. Random House, New York Dent H (2014) The demographic cliff (trans Xiao X). CITIC Press Lin JY (2005) China to overtake US in 2030, Southern Weekend, 1 Feb 2005 Mengkui W (2006) Important issues for China’s medium- and long-term development 2006–2020. China Development Press Morrison WM (2013) China’s economic rise: history, trends, challenges, and implications for the United States. Congressional Research Service, Jul 2013. PIUSE NEWSLETTER, Issue 16 (350) Subramanian A (2013) Preserving the open global economic system: a strategic blueprint for China and the United States. Policy brief PB13-16. Peterson Institute for International Economics. PIUSE NEWSLETTER, Issue 13(347)

Chapter 5

Theoretical Foundations of Efficient Ecological Economic Studies Weiguo Zhang

This paper was supported by the special fund of the “Taishan Scholar” Construction Project.

Abstract The Earth is becoming a great entropy, the ecological economic system is the organic unity of the ecological system and the economic system, the evolution of the ecological economy is experiencing a historical process from low efficiency to high efficiency; and various political, cultural and social factors that can influence the ecological economic system can be internalized into an ecological economic research model. An efficient ecological economy refers to an economic form that can be “sustainable” and maximize economic benefits by effectively regulating the flow of transformation from low-entropy ores and fossil fuels to high-entropy waste and the waste to energy generated from burning fossil fuels, before the very limited fossil energy stocks on earth are exhausted. It is also a developmental model with the most typical characteristics of an ecological economic system. The ecology of industry, the ecology of consumption, the ecological economy of benefits and the ecological civilization of the economic system will finally be manifested in the efficient operation of an ecological economic system, the organic unity of an ecological system and an economic system, and the coordinated development of economic civilization, political civilization, social civilization, cultural construction and ecological civilization. Keywords Ecological economy · Efficient ecology · Research foundations

5.1 Introduction An efficient ecological economy is in essence a kind of ecological economy, then why is the concept of an efficient ecological economy proposed when there is already the concept of ecological economy? As we all know, in countries and regions with developed market economies such as the United States, since the establishment W. Zhang (B) Institute of Economics of Shandong Academy of Social Sciences, Jinan 250002, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_5

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of a disciplinary system of the ecological economy in the 1960s, there are two versions or two disciplinary systems called “ecological economics” and “environmental economics”. The former focuses on the ecological carrying capacity, thus paying special attention to the impact of the scale of economic activities on environmental degradation; but the latter focuses on the effective allocation of environment, energy and other natural resources by means of neoclassical economics, thus paying special attention to how to internalize pollution and other external diseconomy issues through the price (value) mechanism into the theoretical model that makes the natural services efficient or optimal. In reality, countries around the world have adopted the most effective market mechanism for resource allocation so far available in order to promote economic activities, and the environmental management tools closely related to the market mechanism, such as trading permits and environmental taxes, have been applied in the US and the EU respectively (Jessua et al. 2013). The ecological values of “ecological economics” that disregard the effective role of the market mechanism in allocating resources somewhat deviate from reality; and “environmental economics” is also criticized for ignoring the premise that natural services are scarce. Moreover, environmental economics needs to be integrated with other disciplines of the social sciences, such as collective choice theory, sociology, psychology and normative ethics, in order to fully demonstrate its comprehensive appeal (Eatwell et al. 1996). After entering the 1990s, with the emergence of the theory of sustainable development, both theories have increasingly evolved towards the ideal status of simultaneously achieving ecological sustainability and economic sustainability, that is to say, “increasing human wealth” while ensuring that “the ecological footprint remains below the global carrying capacity” (Peter Bartelmus 2010). In China, since the establishment of the disciplinary system of “ecological economics” in the 1980s, it has been argued that an ecological economic system is an organic whole that integrates the ecological system and the economic system, and that the focus should be on the integration of the three systems of productivity, production relations and ecological relations and their laws, with a particular focus on this complex system for studying economic relations, economic behavior and their effects in human societies (Xu et al. 1987). This can overcome the biases of idealized ecological propositions and extreme market propositions that exist in the disciplinary systems of the “ecological economics” and “environmental economics” mentioned above. When the accumulation of various kinds of human behavior, such as “overshooting” (Meadows et al. 2013), has not yet been achieved, or is far from the complete collapse of the carrying capacity of the environment or the “limits to growth”, we should not only worry about the future of the Earth, which is already in an ecological crisis, by the paradigm of our choice (Jorgen Randers 2013), but we should also explore the theoretical model that can organically integrate and coordinate the development of the ecological system and the economic system—the typical model on how to achieve both ecologically and economically sustainable development goals. We consider the efficient model or form of ecological economic development as the best choice for achieving such goals.

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There has been research on the efficient ecological economy, which belongs to the category of ecological economics, for a relatively short period of time, and it was proposed against the background of ecological economic research becoming gradually mature. Some scholars believe that an efficient ecological economy had its origins in the United States in the 1960s (Liu Keying 2004; Zhang Yinting 2004), but there is no consensus on the essential connotation of an efficient ecological economy and how it differs from an ecological economy. The ecological economy came into being in the United States in the 1960s, but it cannot be equated with an efficient ecological economy. The research on the efficient ecological economy in China can be traced back to the year 2000. Through an investigation of the history of the research of the efficient ecological economy in China, it had the typical characteristics of practice promoting the development of the theory. In 1999, Dongying City of Shandong Province took the lead in proposing the idea of building an “Efficient Ecological Economy Demonstration Zone”, which attracted the attention of the theoretical world, gradually became a hot issue in the research of the ecological economy, and obtained a series of research findings. The Development Plan for the Yellow River Delta Efficient Ecological Economic Zone, which was approved by the State Council of the People’s Republic of China on December 1, 2009, gave the definition that “an efficient ecological economy refers to an economical and intensive economic development model with the typical characteristics of an ecological system”. Most of the related studies focused on the development of the Yellow River Delta Efficient Ecological Economic Zone. Scholars did research on the general issue of efficient ecological economic development. For example, some scholars recently conducted an empirical study on the development mode of the efficient ecological economy through the “Environmental Kuznets Curve” (EKC) against the background of China’s new normal economic development, and found that the efficient ecological economic zone showed the trends of synchronous improvements in the capacity for technological innovation and labor productivity, as well as improvements in the quality of the ecological environment and the income of urban and rural residents (Sun and He 2015). Generally speaking, the theoretical research on an efficient ecological economy is still relatively inadequate: from the perspective of the direction of the research, there are more studies on the practical development of the Yellow River Delta Efficient Ecological Economic Zone and fewer studies on the basic theory; from the perspective of the depth of the research, there are not enough studies on the regularity and depth of the development of an efficient ecological economy; and from the perspective of the content of research, there is a lack of a unified paradigm and due consensus. This article is arranged in the following structure: in the second part, it provides a reasonable concept of an efficient ecological economy; the third part gives an empirical analysis of the existence of efficient ecological economic forms, and demonstrates the rationality of the proposed concept of an efficient ecological economy; the fourth part is a further expansion of the concept of efficient ecological economy; and the conclusions come in the fifth part.

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5.2 Concept Definition 5.2.1 The First Theoretical Premise of the Concept of an Ecological Efficient Economy: The High Entropy of the Earth’s Evolution1 We first introduce the concept of entropy from thermodynamics, the first law of thermodynamics and the second law of thermodynamics. Entropy is a state function of the system, and its change depends only on the initial and final states of the system but has nothing to do with the path of change. When a small change in the state of the system occurs, there is the following relationship between the change in the system entropy and the actual process of thermodynamic entropy: ⎧ ⎪ > represents the actual irreversible process δQ ⎨ = represents the actual reversible process ds ≥ T ⎪ ⎩ < represents the impossibility of the actual process

(5.2.1)

Here, ds denotes the entropy variable of the system and δQ denotes the energy absorbed by the system from an environment with temperature T in the process. A statement of the first law of thermodynamics points out that it is impossible to build a machine that can continuously work externally without supplying energy. The Kelvin statement of the second law of thermodynamics states that it is impossible to absorb heat from a heat source and have it fully converted into work without other changes.2 In the context of ecological economics, it can be said that: In a thermodynamic system, the heat energy that cannot be used to do work can be expressed as a quotient obtained by dividing the change in heat energy by the temperature, which is called entropy.3 The second law of thermodynamics states that the entropy of any isolated system always increases. Although the matter and energy are quantitatively conserved (the first law), the mass is not. Entropy is the measurement of mass, and the basic physical means of measuring the degree of utilization, structural randomness, or availability of matter and energy. Assume that the universe is an isolated system, according to the second law of thermodynamics, the natural tendency of the universe is towards “chaos” rather than “order”. Assume that the Earth is a closed system, the fixed stocks of ores and fossil fuels (low entropy) will be continuously converted into waste and waste energy from burning fossil fuels (high entropy) through the adjustable flows (consumption rates). Ultimately, mankind will become increasingly dependent on limited low entropy 1

For the explanation of the high entropy of the Earth’s evolution and a summary of the concept of efficient ecological economy in this section, please refer to Zhang 2011, pp.16–18. 2 For the concept of entropy and its measurement, and the statements of the first and second laws of thermodynamics, please refer to College Chemistry Handbook, Shandong Science and Technology Press, 1985, pp. 731–732. 3 Dictionary Editing Office 1996, p. 1105.

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resources. Even if the tremendous solar energy in the universe system is replenished for the Earth through a fixed flow rate, the solar energy will eventually become waste heat, the low-entropy solar energy will be radiated into outer space, and the Earth will be able to use only a small fraction of it at a given time.4

5.2.2 The Second Theoretical Premise of the Concept of Ecological Efficient Economy: An Ecological Economic System is the Organic Unity of an Ecological System and an Economic System This theoretical premise must be established before reaching or far from reaching the environmental carrying capacity or the threshold of the ecological footprint, limits of economic growth, etc., and it should abandon the two unrealistic research lines of thought, that is to say, the ecological illusion of “ecological economics” in the past that pursue the ecological goals unilaterally, and the disregard for the shortage of ecological services but an overemphasis on the role of the market mechanism effectively allocating the resources by “environmental economics”. In any case, from the angle of economic philosophy, the ecological economic system is an organic combination of ecological relations, productivity and production relations. Here, science and technology make it possible to reduce the consumption of natural resources, such as ecology and energy; and the ever-improving system of a market economy makes it possible to efficiently utilize resources. More importantly, “scientific and technological progress + market system improvement” make it possible to build a university-based ecological economic model or form.

5.2.3 The Third Theoretical Premise of the Concept of an Ecological Efficient Economy: The Evolution of Ecological Economies Undergoes a Historical Process Going from Low Efficiency to High Efficiency Without losing its generality, the economic development of human society follows the law of development of social productivity and the corresponding law of the development of social production relations, and shows the development trajectory of the socio-economic form of agricultural economy → industrial economy → knowledge economy (Zhang 1998); then the ecological economic development of human society will certainly follow the development of an inefficient ecological economy (traditional agricultural economy) → ecological economy (industrial economy) → efficient ecological economy (knowledge economy) (see Fig. 5.1). This is the inevitable 4

Daly and Farley 2007, pp.28–29.

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Efficient ecological economic asymptote Inefficient ecological economic asymptote Time (t) Inefficient ecological economic era (traditional agricultural economy)

Ecological economic era (industrial economy)

Efficient ecological economic era (knowledge economy)

Fig. 5.1 Evolution of the ecological economy

result of the parallel evolution of the ecological system and the economic system, the simultaneous evolution of ecological relations, social productivity and social production relations, and the accompanying innovation of scientific and technological progress and social and economic institutions. Before the high-entropy Earth has not reached or is far from reaching the collapse of limits of the environmental carrying capacity, the thresholds of the ecological footprint, economic growth limits, etc. due to “overshooting”, this is the theoretical interpretation of “managed decline” that we can express. In Fig. 5.1, the horizontal coordinate selects the time variable rather than the economic aggregate per capita (GDP per capita) indicator used by most of the descriptors for the Environmental Kuznets Curve, because once the efficient process of an ecological economy occurs, the per capita growth of GDP is not necessarily chosen; on the contrary, while maintaining the necessary possession level of GDP per capita, the pursuit of the goal of obtaining the expected utility or well-being may be simply the increasing improvements in the level of the value of ecological services. In addition, the difference between an inefficient ecological economic asymptote and an efficient ecological economic asymptote is that the curve of the pollution index of the former changing with the time variable converges to an inevitably low line of the basic pollution level, indicating a low level of environmental pollution caused by the socio-economic activities of human beings, but the curve of the pollution index of the latter changing with the time variable converges to an inevitably high line of the basic pollution level, indicating a very high level of environmental pollution caused by the socio-economic activities of human beings. These are the results of the high entropy of the Earth, a unilateral pursuit of economic benefits by human beings, and a neglect of ecological balance and environmental protection, and also a constant that is difficult to change—an irreversible cost of the evolutional process of the Earth and an inevitable cost of the economic activities of human beings in the past. In the era of a traditional agricultural economy, the system of a market economy was not well-developed, economic efficiency was at a low level, but the level of environmental pollution was low, and there was an asymptotic line on the basic pollution level that changed slowly over time, so it belonged to the era of inefficient

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ecological economy; in the era of an industrial economy,5 the transition to a developed market economy was underway, the economic efficiency tended to improve, and the environmental pollution experienced an inverted U-shaped process of change from high to low over time, so it belonged to the era of a general ecological economy; in the era of a knowledge economy, a perfect market economy system has been established, economic efficiency has become stable at a high level, and the level of environmental pollution has been changing more slowly over time at the new level of basic pollution,6 thus forming a new asymptotic line of pollution change over time. Based on the analysis of the above three theoretical premises, we can now give a definition as follows: efficient ecological economy refers to an economic form that can be “sustainable” and maximize economic benefits by effectively regulating the flow of transformation from low-entropy ores and fossil fuels to high-entropy waste and the waste to energy generated from burning fossil fuels, before the very limited fossil energy stocks on earth are exhausted. It is also a development model with the most typical characteristics of an ecological economic system. The ecology of industry, the ecology of consumption, the ecological economy of benefits and an ecological civilization of the economic system will finally be manifested in the efficient operation of the ecological economic system, and in an organic unity of the ecological system and the economic system.

5.3 Empirical Analysis China is a developing country with a large population, economic aggregate, and total consumption of natural resources such as fossil energy, and the corresponding global shares of these indicators rank top in the world; China is also a developing country in the double transition period of development from a traditional industrial economy to a new type of industrialization and the reform from a highly centralized system of a planned economy to a system of a market economy system. The study of the realistic possibility of China’s development of an efficient ecological economy is of typical global significance. China in transition is also characterized by a typical “fiscal federalism”, in which local governments, especially those at the provincial level, as economic entities with relatively independent economic interests, play an important role in economic activities beyond the central government, enterprises and other economic entities. In particular, they participate directly in economic activities, have the power of decision-making on major issues of economic development and even become the dominant investment entities. These have already become a research consensus. For developed Western countries, economic entities studied in the mainstream economics textbooks are mainly the government and enterprises, but in China 5

This includes the two stages: traditional industrial economy and new industrialization. Because of the high level of economic development and the high entropy evolution of the Earth, this level will be higher than that in the era of a traditional agricultural economy or an inefficient ecological economy.

6

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during the transition period, it is necessary to pay special attention to local governments as economic entities. It is a special research subject between government and enterprises. By applying China’s panel data at the provincial level to analyze the relationship between local government’s investment behavior, regional administrative monopolies and long-term economic growth (from Model 3–1 to Model 3–4), we get the following two interrelated propositions:7,8 2 gdpgit = αi + β1 govinvgit + β2 divsit−1 + β3 divsit−1 + β4 f din it + β5 f doutit + β6 X it + εit

(5.3.1)

2 pergdpgit = αi + β1 divsit−1 + β2 divsit−1 + β3 perginvgit + γ X it + εit (5.3.3) 2 perginvit = αi + β1 pergdpgit + β2 divsit−1 + β3 divsit−1 + β4 f incomeit + εit (5.3.3)

divsit = αi + β1 pergdpgit2 + β2 pergdpgit + β3 perginvit + γ X it + εit (5.3.4) Proposition 1 Efficient economic growth is possible in the long run, and the continuous improvement in the system of a market economy contributes to efficient economic growth. By using Model 5.3.1, the empirical test results based on the panel data of 29 Chinese provinces from 1987 to 2007 indicate that: the local government’s investment behavior plays a significant role in promoting long-term economic growth; but at this stage, the market segmentation has an inverted U-shaped influence on regional economic growth. In the short run, the local governments have an incentive to implement a certain degree of administrative monopoly, and in the long run, the administrative monopoly is bound to be at the expense of long-term economic growth (Zhang et al. 2010). By applying Model 5.3.2 to Model 5.3.4, the panel data of Chinese provinces from 1994 to 2007 are utilized to analyze the relationship between local government’s investment behavior, regional administrative monopoly and economic growth. The results show that at the current stage, the local government’s investment and regional administrative monopoly are effective in promoting local economic growth, and they have obvious substitution effects; but in the long run, the regional administrative monopoly is not conducive to the overall national market economies of scale, and the acquisition of political rents undermines economic efficiency (Zhang et al. 2011). Proposition 2 The existence of an Environmental Kuznets Curve (EKC) is a realistic possibility in the era of an industrial economy.9 7

For details of Model 3–1, please refer to Zhang et al. 2010. For details of Model 3–2 to Model 3–4, please refer to Zhang et al. 2011. 9 The reason is, as mentioned above, the dual result of the evolution of the ecological economy from inefficiency to efficiency in the era of an industrial economy, the continuous progress of science and technology and continuous improvement in the system of a market economy. 8

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A brief theoretical analysis is given as follows.10 Assume that there is no difference among individuals in the economy and that the utility U (·) of a representative individual at time t depends not only on his/her consumption Cι but also on the environmental level Sι at which he/she survives. Just like consumption, the environmental level is a flow rather than a stock. Further, assume that the environmental level is negatively correlated with CO2 emissions, the simplest case is: St = S0 − aet where S0 can be considered the environmental level under pristine natural conditions, eι is the CO2 emission, and the increase in emissions by each unit will decrease the environmental level by a. In terms of production of the society, we also consider the simplest case: ignoring depreciation and assuming that the final product Yι is both consumable and investable, we may divide the investment into productive investment and emission reduction investment X ι , which aims at improving the environment. The capital stock of the emission reduction investment is denoted as K ιX , and the dynamic equations of production capital stock and emission reduction capital stock are: K t = Yt − Ct − X t − bt K tX = X t where bι is the expenditure on emission reductions at time t, but assume that bι does not form capital stock, and the emission eι is the output Yι . The function of the emission capital stock K ιX and the emission reduction expenditure bι is: et = e(Yt , K tX , bt ), where e K X < 0, eb < 0 Suppose that the local government decides on an optimal allocation of production, consumption and emissions in the region. Its objective function in continuous time is lifetime utility discounted by a representative individual, and the optimization problem is depicted as follows:  max

{Ct ,X t ,bt ,K t ,K tX } 0

∞

e− pt U (Ct , St )dt

s.t.K t = Yt − Ct − X t − bt K tX = X t

10

For details of the theoretical analysis and measurement and empirical analysis of this proposition, please refer to Zhang et al. 2015, pp. 14–21.

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The Current-value Hamiltonian function of this optimum control is: Hˆ = U (Ct , St ) + λ1t (Yt − Ct − X t − bt ) + λ2t X t where λ is a dynamic Lagrangian multiplier. Solve the first-order condition and the transversal condition, ∂ Hˆ = UC − λ1t = 0 ∂Ct ∂ Hˆ = −λ1t + λ2t = 0 ∂ Xt ∂ Hˆ = −Us aeb − λ1t = 0 ∂bt ∂ Hˆ = ρλ1t − λ1t = 0 ∂ Kt ∂ Hˆ = ρλ2t − λ2t = 0 ∂ K tX lim e−ρt λ1t K t = 0, and lim e−ρt λ2t K tX = 0 t→∞

t→∞

From the first and third first-order conditions, we have: a

US 1 =− UC eb

U S /UC can be regarded as the consumer’s willingness with the maximized utility as a price with the measure of consumption paid by a unit of marginal environmental level, then aU S /UC is the marginal social cost per unit of emissions. τ = −1/eb is defined as the marginal cost of emission reduction, then the above equation shows that the marginal cost of emission reduction is equal to the marginal social cost of emissions. From the last two first-order conditions, we know: λ˙ 2t λ˙ 1t = =ρ λ1t λ2t That is, the growth rate of shadow prices of the two investments should be exactly equal to the discount rate at the socially optimal point. Each flow in the Hamilton’s equation constitutes exactly one acceptability measure of the overall economic welfare: US St E W = Ct + K˙ t + K˙ tX + UC

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where K˙ t is the production investment, K˙ tX is the emission reduction investment, US S is the environmental level after adjusting the relative economic price, and it UC t only converts the environmental level into a measure of consumption if it is divided by the marginal utility of consumption. Substituting the relationship between the environmental level and CO2 emissions into the above equation, we get: E W = Ct + K t + K tX +

US S0 − τ et UC

Hence, the current level of CO2 emissions reduces economic welfare (measured by the marginal cost of emission reduction or the marginal social cost), and both production and emission reduction investments can balance the reduction of economic welfare by emissions. The CO2 emissions et gradually increase when local governments start with the high production investment, but insufficient emission reduction investment. Social economic welfare increases as long as the welfare contribution of production investment exceeds the emission effect. Once the social welfare increases, it is difficult to reduce, but the emissions become more severe, so local governments increase their emission reduction investment K˙ tX to mitigate the downward pressure on local welfare. Since the CO2 emissions et is a decreasing function of K˙ tX , they are bound to grow slowly or decrease during this period. Therefore, local government’s investment has an inverted U-shaped influence on CO2 emissions. In other words, in the early stage of local government’s investment, the production investment is high while emission reduction investment is relatively low, and CO2 emissions will gradually increase with the growth of local government’s investment; in the later stage of development, local government will increase its investment in CO2 emissions for the needs to adjust the economic structure and change the development mode. The emission reduction investment is negatively correlated with emissions, so O2 emissions will gradually decrease as the local government investment grows. Results of the econometric empirical study. By utilizing the dynamic panel models (Models 3–5 and 3–6), according to the analysis of the relationship between local government’s investment and CO2 emissions in China based on the provincial panel data from 1995 to 2010, the results indicate that in China the local government’s investment bias is significantly positively correlated with the CO2 emissions bias. At the same time, the local government’s investment has an inverted U-shaped influence on China’s CO2 emissions, that is to say, the local government’s investment promotes CO2 emissions at the initial stage, but with the gradual increase in the local government’s investment, CO2 emissions show a trend of first worsening and then improving. Cit = a + ρCi,t−1 + β1 investit + β2 investit2 + Z it δ + u i + εit

(5.3.5)

Cit = ρ Ci,t−1 + β1 investit + β2 investit2 + Z it δ + εit

(5.3.6)

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5.4 Conceptual Expansion 5.4.1 Theoretical Analysis Moving from inefficiency to efficiency in ecological economic development is a complex process involving economic, political, cultural, social and ecological development. It not only needs to rely on the continuous progress of science and technology in order to slow down the high entropy of the Earth to the maximum extent, but it also needs to continuously improve the system of a market economy in order to optimize the allocation of natural resources and socio-economic resources to the maximum extent; we must follow the law of evolution of ecological relations, productivity and production relations, and moreover, the inevitable connections of the three; and we must consider the organic unity of the ecological system and the economic system, and be fully aware of the influence of political, cultural, social and other factors on the whole ecological economic system Theoretically, the political, cultural and social factors influencing the ecological economic system can be internalized in the ecological economy research model—there are various theoretical paradigms for the methods of research on the ecological economy, which once again demonstrate that the appeal of ecological economy research lies in its disciplinary comprehensiveness. (1)

(2)

The influence of political factors. The discords between countries and regions, especially conflicts and wars, while consuming a large amount of human social wealth, is often accompanied by large-scale destruction of natural resources, ecological environment and living conditions, and the brutal conventional weapons wars, nuclear leaks and even nuclear explosions, use of biological and chemical weapons, terrorist incidents, etc., will largely lead to such destruction. In recent years, the mainstream economists incorporate the geopolitical factors that may trigger conflicts and wars into their models of economic analysis, and this is inspirational for us. Conflict of interests among different political entities, and the modernization of state governance systems and state governance capacity, etc., can have a significant impact on ecological governance. The influence of cultural factors. The “Huntington conflict” of cultures exists, and the values and institutional orientation deeply influence the cognitive level, goal pursuit and institutional design of ecological civilization; culture, as knowledge, creativity, science and technology, directly influences the effects of the development and utilization of natural resources, material production reduction, the distribution and depth of the ecological footprint, the environmental carrying capacity and sustainability, etc.; culture in a narrow sense with language, media, literature, performance, etc. as a carrier deeply affects the exchange, circulation and sharing of information on an ecological economy and on the achievements of an ecological civilization. In particular, culture can fundamentally determine the economic, political, social and other behavioral choices of human beings. Culture has great external economic effects, which will simplify the ecological footprint, the analysis of the value of ecological

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(3)

87

energy, that of ecological services and other quantity analysis methods of an ecological economy and will solve a large number of problems that cannot be solved by the green GDP accounting system. As long as there is a true human consensus and behavioral choices for an ecological civilization, all quantity analysis methods and ecological economic accounting systems seem to be only informative or useless. The influence of social factors. The ecological economic system is an organic unity of an ecological system and an economic system, and essentially a social economic system, which must deal with the relationship between man and nature, man and society, and man and self. How people get along with nature has already overcome the misconceptions of “man’s will prevails over nature” and “conquering nature”, but it has formed the concept of respecting and living in friendship with nature. How people get along with society has already formed the mainstream values of small families obeying the society and being happy before the people are happy. Anyway, as inhabitants of the global village, it is necessary to propose a unified scheme of social governance in order to address various social issues such as climate change, poverty, transboundary pollution, peace and harmonious order. Broadly speaking, various social factors, including the above political and cultural factors, can influence the historical process of ecological and economic development.

5.4.2 Experience and Implications China, a developing country in transition with a large population, economic aggregate, and total consumption of natural resources such as fossil energy, is striving to transform its national development path or model from the “Washington Consensus” of market fundamentalism to people-oriented, comprehensive, coordinated and sustainable development,11 and then move towards the “Beijing Consensus” with the “five-in-one” civilizational development of economic construction, political construction, cultural construction, social construction and ecological civilization. Further, the Party Central Committee has proposed a strategy for building a moderately prosperous society, pursuing an all-round in-depth reform, implementing a comprehensive framework for promoting the rule of law, and launching an all-out effort to enforce strict Party discipline. This strategy will surely guide ecological economic development from inefficiency to efficiency, and open up a path of ecological economic evolution with the characteristics of a large developing economy in transition. Based on the above analysis, we can expand the concept of an ecological efficient economy as follows: an efficient ecological economy refers to an economic form that can be “sustainable” and maximize economic benefits by effectively regulating the flow of transformation from low-entropy ores and fossil fuels to high-entropy waste and the waste to energy generated from burning fossil fuels, before the very 11

Zhang 2008, pp. 65–70.

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limited fossil energy stocks on earth are exhausted. It is also a development model with the most typical characteristics of an ecological economic system. The ecology of industry, the ecology of consumption, the ecological economy of benefits and the ecological civilization of the economic system will finally be manifested in the efficient operation of the ecological economic system, the organic unity of an ecological system and an economic system, and coordinated development of an economic civilization, a political civilization, a social civilization, cultural construction and an ecological civilization.

5.5 Conclusions First of all, we must unify the framework of theoretical research of an ecological economy, abandon the research perspective of ecological economics that ignores the role of the market economy but overly emphasizes the thresholds of the ecological footprint, the physical scale limits of the exploitation and utilization of natural resources, the limits of the environmental carrying capacity or the shortage of ecological services, as well as the research perspective of environmental economics that overemphasizes the limited regulatory role of the market mechanism but ignores the evolution of the Earth towards high entropy, the objective existence of ecological economic thresholds, limits to the physical scale of the exploitation and utilization of natural resources and the environmental carrying capacity, and the shortage of ecological services, and establish the scientific perspective of the ecological economic system with the organic unity of the ecological system and the economic system. We should explore the best form of realization for the organic unity of the ecological system and the economic system, that is, the optimal model for the organic unity of these two systems—the realization of an efficient economic form. Second, due to the existence of the three theoretical premises: the high entropy of the Earth, the ecological economic system is the organic unity of the ecological system and the economic system, and the evolution of an ecological economy undergoing a historical process from inefficiency to efficiency, we can give a definition as follows: an efficient ecological economy refers to an economic form that can be “sustainable” and maximize economic benefits by effectively regulating the flow of transformation from low-entropy ores and fossil fuels to high-entropy waste and the waste to energy generated from burning fossil fuels, before the very limited fossil energy stocks on earth are exhausted. It is also a development model with the most typical characteristics of the ecological economic system. The ecology of industry, the ecology of consumption, the ecological economy of benefits and an ecological civilization of the economic system will finally be manifested in the efficient operation of the ecological economic system, and the organic unity of the ecological system and the economic system. Third, it is possible for the economy to grow efficiently in the long term, and the continuous improvement of the market economy system will help the economy to

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grow efficiently; in the era of an industrial economy, the existence of the Environmental Kuznets Curve (EKC) is a realistic possibility, these two interrelated propositions are measured and proved in China in transition, thus showing that the above-mentioned concept of an efficient ecological economy is reasonable. Fourth, theoretically, the political, cultural and social factors influencing the ecological economic system can be internalized in the ecological economy research model—there are various theoretical paradigms for the methods of research on the ecological economy, which once again demonstrate that the appeal of ecological economy research lies in its disciplinary comprehensiveness. The experience of China in transition also enlightens us in that the expanded concept of an efficient ecological economy can be expressed as follows: an efficient ecological economy refers to an economic form that can be “sustainable” and maximize economic benefits by effectively regulating the flow of transformation from low-entropy ores and fossil fuels to high-entropy waste and the waste to energy generated from burning fossil fuels, before the very limited fossil energy stocks on earth are exhausted. It is also a development model with the most typical characteristics of the ecological economic system. The ecology of industry, the ecology of consumption, the ecological economy of benefits and the ecological civilization of the economic system will finally be manifested in the efficient operation of the ecological economic system, the organic unity of the ecological system and the economic system, and the coordinated development of an economic civilization, a political civilization, a social civilization, cultural construction and an ecological civilization. This indicates once again that the history of research on the efficient ecological economy in China has the typical feature of practice driving the development of theory. Fifth, culture has a decisive role in the development of human civilization, including ecological civilization. Perhaps it is a long process to solve the “Huntington conflict” or it may never be solved, but the concepts of global village, human consensus on ecological crisis, and global ecological governance are becoming increasingly popular. The development of an efficient ecological economy is not only a historical necessity, but also a human consensus on “ecological communism”.

References [Germany] Bartelmus P (2010) Quantitative eco-nomics: how sustainable are our economies? Social Sciences Academic Press (China), p 232 Daly HE, Farley J (2007) Ecological economics—principles and applications (Chinese Translation), The Yellow River Water Conservancy Press, pp 28–29 Dictionary Editing Office (1996) Institute of linguistics. Modern Chinese Dictionary, The Commercial Press, CASS, p 1105 Eatwell J, Milgate M, Newman P (eds) (1996) The new palgrave dictionary of economics, vol 2: E-J, Economic Science Press, p 176 Jessua C, Labrousse C, Vitry D, Gaumont D (eds) (2013) Dictionnaire des Sciences Économiques, Social Sciences Academic Press (China), pp 236–237 Liu K (2004) Research on accelerating the efficient ecological economic development in the yellow river delta, Doctoral Thesis, Princeton University

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Meadows D, Randers J, Meadows D (2013) The limits to growth, China Machine Press, p 2 [Norway] Randers J (2013) 2052: a global forecast for the next forty years, Yilin Press, pp 18–19 Sun X, He X (2015) Empirical analysis of the development of an eco-efficient economy in the new normal. J Quantitative Tech Econ 7 Xu D (ed) (1987) Ecological economics. Zhejiang People’s Publishing House, pp 3–11 Yin Y (ed) (1985) College chemistry handbook. Shandong Science and Technology Press, pp 731–732 Zhang Y (2004) Problems existing in China’s efficient ecological economic development and countermeasures. Commercial Res 13 Zhang W (ed) (2011) Shandong economic blue paper 2012: efficient ecological economy wins the future. Shandong People’s Publishing House, pp 16–18 Zhang W (ed) (1998) Knowledge economy and future development. Qingdao Ocean University Press, pp 3–5 Zhang W, Ren Y, Hou Y (2010) The local government investment effects on long-term economic growth—evidence from China’s economic transformation. China Indus Econ 8 Zhang W, Ren Y, Hua X (2011) Local government investment, administrative monopoly and economic growth—evidence from chinese provincial panel data. Econ Res J 8 Zhang W, Liu Y, Han Q (2015) Local government investment, CO2 emission and CO2 reduction— evidence from Chinese provincial panel data. Ecol Econ 7 Zhang W (2008) From “marshall convergence” to “viability in transition”: the experiences of China’s economic transformation. Acad Monthly 12

Chapter 6

Resource and Environmental Situations and Policy Options of Rural Ecological Governance in China Fawen Yu

Abstract Rural ecological governance is an important part of the construction of a beautiful countryside, an important measure for promoting the construction of an ecological civilization in rural areas, and more importantly, a major issue that concerns the immediate interests of the majority of rural residents and the harmony and stability of rural society. This paper explores the situations regarding resources that the rural ecological governance faces from the four ecological systems, namely farmland, water resources, forest and grassland, and it discusses the environmental situations such as water pollution, farmland pollution, rural solid waste and domestic wastewater pollution. On this basis, the ideas for policy options are proposed to strengthen rural ecological governance from the aspects of advancing the reform of the system of government assessment, improvement of the system of social economic evaluation, and the implementation of a system for the strictest farmland protection, the water resource management system, the environmental protection system, paid use of resources, as well as systems for ecological compensation, environmental accountability and environmental compensation. Keywords Rural ecological governance · Resource situations · Environmental situations · Policy options · China

6.1 Introduction In 2013, the No. 1 Document of the Party Central Committee proposed to “promote the construction of an ecological civilization in rural areas, strengthen rural ecological construction, environmental protection and comprehensive treatment, and strive to construct a beautiful countryside”. Since then, the beautiful countryside is becoming one of the hot issues for academic studies, and scholars in different fields are studying the relevant issues for the construction of a beautiful countryside from different perspectives. Rural ecological governance is an important part of the construction F. Yu (B) Rural Development Institute, Chinese Academy of Social Sciences, Beijing 100732, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_6

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of a beautiful countryside, an important measure for promoting the construction of an ecological civilization in rural areas, and more importantly, a major issue that concerns the immediate interests of the majority of rural residents and the harmony and stability of rural society. How to strengthen rural ecological governance is important to the success of building up a beautiful countryside, and it also has important practical significance for this topic. To this end, it is necessary to have a comprehensive and clear understanding of the situation faces rural ecological governance both regarding resources and the environment, as well as the policy options based on this. The logical framework of this paper is given as follows: The second part focuses on the situations of resources and of the environment of rural ecological governance, and investigates the four ecological systems: farmland, waters, forest and grassland; the third part discusses the policy options to strengthen rural ecological governance.

6.2 Analysis of the Situations of Resources and of the Environment Facing Rural Ecological Governance in China 6.2.1 Analysis of the Situations Regarding Resources In general, the changes in the ecological environment are mainly reflected in the changes in the four ecological systems: farmland, waters, forest and grassland. Therefore, this section analyzes the changes in these four ecological systems in terms of quantity and quality in order to have an overall understanding of the changes in China’s rural ecological environment.

6.2.1.1 (1)

The Situation of Farmland Resources

Increase/decrease in farmland. According to the China’s Land & Resources Bulletin 2014, in terms of quantity, from 2009 to 2013, China’s farmland area continued to decrease from 135,384,600 ha to 135,163,400 ha, with a decrease of 221,200 ha or 0.16%. In 2013, the net increase in farmland area was 4900 ha.

A total of 403,800 ha of land was approved for construction use in 2014, and this area decreased by 24.4% from 2013. It included 160,800 ha of farmland. After entering the stage of rapid industrialization and urbanization, the occupation of farmland in all regions showed a trend of strong increase, particularly the increased occupation of high-quality farmland with high land productivity. In the composition of China’s farmland resources, the proportion of high-quality farmland area is relatively low, and in the context of industrialization and urbanization, the proportion of

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Slight, 0.112 Light, 0.023

Moderate, 0.015

Severe, 0.011

Fig. 6.1 The structure of the degree of pollution of the soil environment

high-quality farmland will further decline. In the long run, the safety of agricultural products in China will be seriously threatened. (2)

Soil pollution of farmland.1 According to the 2014 National Soil Pollution Survey Bulletin, the soil environment in China showed the following characteristics: First, the overall situation was not optimistic; second, some regions were heavily polluted; third, the quality of the farmland was worrying; and fourth, the problems regarding soil in the industrial and mining waste land areas were prominent. The main causes of the soil pollution included: industry and mining, agriculture and other human production activities and high background values of the soil environment.

From the point of view of overlimit, the rate of total soil overlimit in the country is 16.1%, and the structure of the degree of pollution of the soil environment is shown in Fig. 6.1. Soil pollution is mainly inorganic pollution, and the overlimit of inorganic pollutants accounts for 82.8% of all. It is followed by organic pollution, and compound pollution accounts for a smaller proportion. Furthermore, soil pollution varies considerably by region. In general, soil pollution in South China is more serious than that in North China, and the rate of the overlimit of heavy metal pollution in the soils of the southwestern and south-central regions is much larger; in the Yangtze River Delta, the Pearl River Delta and other more economically developed regions, as well as the northeastern old industrial bases, pollution of the soil is also more prominent; the content of the four inorganic pollutants, namely cadmium, mercury, arsenic and lead, also shows a gradual increasing trend in the directions from northwest to southeast, from northeast to southwest.

1

Ministry of Environmental Protection of the People’s Republic of China: National Soil Pollution Survey Bulletin, 2014.

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The quality of the soil environment in the farmland is the most important guarantee for ensuring the safety of agricultural products; once polluted, the safety of agricultural products will become groundless, and it will finally harm the health of the nation. Therefore, the environmental issue of water and soil resources and the resulting safety issue of agricultural products will be the two major issues related to the health of the nation, as well as an important strategic issue for the sustainable development of the Chinese people. (3)

Soil erosion. According to the Bulletin of First National Water Census for Soil and Water Conservation, the total area of soil erosion nationwide was 2,949,100 km2 , accounting for 31.12% of the total area surveyed, of which 1,293,200 km2 were eroded by water, accounting for 43.85%, and 1,655,900 km2 were eroded by wind, accounting for 56.15%. Table 6.1 shows the areas and composition of water and wind erosion by different intensities in China in 2013. It can be seen from the table that in the area of the composition of both water and wind erosions, the areas with mild erosion have the largest proportions, being 51.62% and 43.24% respectively. The proportions of areas with extremely strong and severe erosion vary considerably. Erosion by wind is much greater than that by water. For wind erosion, the areas with extremely strong and severe erosion account for 13.31% and 17.15%, respectively, but for water erosion, these two types of areas account for 5.90% and 2.26%, respectively.

In terms of the distribution of river basins, erosion in the Yangtze River Basin is 555.1 million tons, accounting for 46.28%; erosion in the Yellow River Basin is 382.6 million tons, accounting for 31.90%; and these two basins account for 78.18% of the total amount of erosion. In the Haihe River Basin, erosion is 0.6 million tons, accounting for 0.05%; in the Huaihe River Basin, erosion is 1.8 million tons, accounting for 0.15%; in the Pearl River Basin, erosion is 66.8 million tons, accounting for 5.57%; in the Songhua River Basin, erosion is 32.3 million tons, accounting for 2.69%; in the Liaohe River Basin, erosion is 34.3 million tons, accounting for 2.86%; in the Qiantang River Basin, erosion is 14.8 million tons, accounting for 1.23%; in the Min River Basin, erosion is 1.63 million tons, accounting for 0.13%; in the Talimu River Basin, erosion is 104.2 million tons, accounting for 8.69%; and in the Heihe River Basin, erosion is 5.4 million tons, accounting for 0.45%. Compared with the annual average erosion from 1950 to 1995, soil erosion in the Songhua and Qiantang River Basins is on the increase, but that of other basins is decreasing. The Yangtze River Basin and the Yellow River Basin are not only green ecological barriers and areas of water sources for the lower reaches, but they are also important areas for China’s ecological security. Therefore, it is of great practical significance to further strengthen the ecological construction of the two major river basins, improve their vegetation cover and reduce water and soil loss.

129.32

165.59

Water erosion

Wind erosion

71.60

43.24

51.62 21.74

35.14

Area

66.76

Moderate

Area

Proportion

Mild

13.13

27.18

Proportion

Source Bulletin of First National Water Census for Soil and Water Conservation

Total area

Erosion type

21.82

16.87

Area

Strong

13.17

13.04

Proportion

22.04

7.63

Area

13.31

5.90

Proportion

Extremely strong

Table 6.1 Areas and composition of water and wind erosions by different intensities in China in 2013. Unit: × 104 km2 ; % Severe

28.39

2.92

Area

17.15

2.26

Proportion

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Table 6.2 Reductions in the areas of land desertification and sandification and the structure. Unit: × 104 km2

(4)

Moderate

Severe

Extremely severe

Area of desertified land

1.69

0.68

2.34

Area of sandified land

0.99

1.04

1.56

Soil desertification.2 At present, the area of desertification and sandification is still large in China. According to the Results of the Fourth National Desertification and Sandification Monitoring, by the end of 2009, there were still 2,623,700 km2 of desertified land, accounting for 27.33% of the country’s total land area, and 1,731,100 km2 of sandified land, accounting for 18.03% of the country’s total land area. These data indicated that, although land desertification and sandification were contained to some extent in China, there were still some local areas that showed a trend towards further expansion.

It should be noted that the total area of desertification and sandification in China showed a net reduction. During the fourth monitoring, the area of land desertification and sandification decreased by 12,500 km2 and 8587 km2 respectively, with an annual average decrease of 2491 km2 and 1717 km2 , respectively. Moreover, the degree of desertification and sandification of land was reduced. Compared with the third monitoring results, the reductions in the area of land with moderate, severe and extremely severe desertification and sandification as well as the structure are shown in Table 6.2. In addition, the areas of mobile and semi-fixed sand also decreased by 7100 km2 .

6.2.1.2

The Situation of the Water Resources

Generally speaking, China’s water resources, besides few per-capita water resources and uneven spatial and temporal distribution, have two obvious characteristics: First, the scarcity of resource-oriented water, engineering-oriented water, and qualityoriented water coexist; second, four phenomena coexist, namely abundance, scarcity, dirtiness and muddiness of water. (1)

2

The structure of the distribution of water resources. As we all know, the spatial distribution of water resources in China is seriously mismatched. If the Yangtze River is taken as the boundary, the farmland to the south of the Yangtze River accounts for only 35.2%, but there are 80.4% of the water resources; the farmland to the north of the Yangtze River accounts for 64.8%, but there are only 19.6% of the water resources (see Fig. 6.2), and most of these areas are key provinces and cities for the country’s grain production. The characteristics of

State Forestry Administration: Fourth National Desertification and Sandification Monitoring Results, 2011.

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Farmland Areas to the south of the Yangtze River

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Water resources

Areas to the north of the Yangtze River

Fig. 6.2 Spatial distribution of water resources in China

the spatial distribution have, to some extent, seriously affected the country’s supply of agricultural products. (2)

(3)

The utilization and consumption of water resources. According to the 2014 Statistical Bulletin of National Economic and Social Development, China’s total water consumption in 2014 was 622 billion m3 , which increased by 0.6% compared with 2013. Within these figures, the consumption of water for domestic use increased by 2.7%, that for industrial use increased by 1.0%, that for agriculturaluse increased by 0.1%, and the ecological replenishment of water increased by 0.6%. The consumption of water per 10,000 yuan of GDP was 112 m3 , which decreased by 6.3% compared with 2013; the consumption of water per 10,000 yuan of industrial added value was 64 m3 , which decreased by 5.6% compared with 2013; and the per capita consumption of water was 456 m3 , which increased by 0.1% compared with 2013. Discharge of wastewater and pollutants. According to the 2014 Environmental Status Bulletin of China, the COD discharge in the wastewater was 22.946 million tons, which decreased by 2.47% compared with 2013; and the total discharge of ammonia nitrogen was 2.385 million tons, which decreased by 2.90% compared with 2013.

For the source of the main pollutant discharges in the wastewater, among the 22.946 million tons of COD, 3.113 million tons came from industrial sources, accounting for 13.57%; 8.644 million tons came from domestic sources, accounting for 37.67%; 11.024 million tons came from agricultural sources, accounting for 48.12%; and 165,000 tons came from centralized sources, accounting for 0.72%. Among the 2.385 million tons of ammonia nitrogen, 232,000 tons came from industrial sources, accounting for 9.73%; 1.381 million tons came from domestic sources, accounting for 57.90%; 755,000 tons came from agricultural sources, accounting for 31.66%; and 17,000 tons came from centralized sources, accounting for 0.71%.

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The status of the monitoring of the quality of water in bodies of water.3 According to the 2014 Environmental Status Bulletin of China, the monitoring of the quality of water was carried out at 968 state-controlled surface water monitoring stations (points) of 423 major rivers and 62 key lakes (reservoirs) across the country. The stations achieving Classes I, II, III, IV, V and below V water quality accounted for 3.4%, 30.4%, 29.3%, 20.9%, 6.8% and 9.2%, respectively, and the main pollutant indicators were Chemical Oxygen Demand (COD), Total Phosphorus (TP) and Five-day Biochemical Oxygen Demand (BOD5).

The quality of river water: In 2014, in the seven major river basins of the Yangtze River, the Yellow River, the Pearl River, the Songhua River, the Huaihe River, the Haihe River and the Liaohe River and the state-controlled sections of the rivers of Zhejiang and Fujian, northwestern rivers and southwestern rivers, the stations obtaining Class I water quality accounted for 2.8%, which was 1.0% point more than that in 2013; those obtaining Class II water quality accounted for 36.9%, which was 0.8% point less than that in 2013; those obtaining Class III water quality accounted for 31.5%, which was 0.7% points less than that in 2013; those obtaining Class IV water quality accounted for 15.0%, which was 0.5% points more than that in 2013; and those obtaining Classes V and below V water quality accounted for 4.8% and 9.0%, respectively, which were equal to those in 2013. The main pollution indicators are COD, BOD5 and TP. The quality of lake (reservoir) water: In 2014, among the 62 key lakes (reservoirs) in the country, 7 obtained Class I water quality, accounting for 11.29%; 11 obtained Class II water quality, accounting for 17.74%; 20 obtained Class III water quality, accounting for 32.26%; 15 obtained Class IV water quality, accounting for 24.19%; 4 obtained Class V water quality, accounting for 6.45%; and 5 obtained below Class V water quality, accounting for 8.06%. The main pollution indicators were TP, COD and PI (permanganate index). The quality of underground water: In 2014, the monitoring of the quality of underground water was conducted in 202 cities at the prefecture level and above, with a total of 4896 monitoring points, including 1000 national monitoring points. The monitoring results show that: the proportion of monitoring points with excellent water quality is 10.8%, the proportion with good water quality is 25.9%, the proportion with relatively good water quality is 1.8%, the proportion with poor water quality is 45.4%, and the proportion with very poor water quality is 16.1%. The main indicators for an excess of the limit include total hardness, total dissolved solids, iron, manganese, “three nitrogen” (nitrite nitrogen, nitrate nitrogen and ammonia nitrogen), fluoride, sulfate, etc., and some monitoring points exceed the limit of arsenic, lead, hexavalent chromium, cadmium and other heavy (semi-) metals. The total number of monitoring points for water quality with continuous monitoring data is 4501, distributed in 195 cities. Compared with 2013, the proportion of monitoring points with stable water quality was 65.3%, the proportion of monitoring 3

Ministry of Environmental Protection of the People’s Republic of China: 2014 Environmental Status Bulletin of China, 2015.

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points with better water quality was 16.7%, and the proportion of monitoring points with worse water quality was 18.0%.

6.2.1.3 (1)

(2)

4

The Situation of Forest Resources4

General situation of forest resources. According to the Main Results of the Eighth National Forestry Survey (2009–2013), China’s forest area was 208 million ha, with a forest coverage rate of 21.63%. Among those ha, the areas of natural forest and man-made forest were 122 million ha and 69 million ha respectively, accounting for 58.65 and 33.17% of the forest area. The total volume of standing stock reached 16.433 billion m3 , and the stock volume of forest was 15.137 billion m3 , including the stock volumes of natural forest and man-made forest of 12.296 billion m3 and 2.483 billion m3 , accounting for 81.23% and 16.40% of the stock volume of forest respectively. Changes in forest resources. Compared with the results of the seventh national forestry survey, the changes in China’s forest resources showed the following characteristics. First, the stock volume of forest continued to grow. The net increase in the forest area was 12.23 million ha; the rate of forest coverage increased by 1.27% points; the net increase in the stock volume of forest was 1.416 billion m3 , and of the net increase in the stock volume of forest, the net increase in the stock volume of natural forest and man-made forest accounted for 63% and 37% respectively. Second, the forest quality gradually improved. Changes in the quality of the forest could be reflected in the stock volume of forest per unit area, the annual average growth of forests, the number of plants per unit area and the structure of the forest. The results of the comparison indicate that the stock volume of forest per unit area and annual average growth increased by 3.91 and 0.28 m3 /ha respectively; in addition, the number of plants per hectare increased by 30, the average diameter at breast height of the plants increased by 0.1 cm, the proportion of near-mature forest and over-mature forest in the forest area increased by 3% points, and the proportion of mixed forest increased by 2% points. Third, the project for the protection of the natural forest made achievements to some extent. The results of the survey indicated that both the area and the stock volume of natural forest increased to some extent, by 2.15 million ha and 894 million m3 respectively. Here, the project for the protection of the natural forest area accounted for the main part, with an increase of 1.89 million ha and 546 million m3 in area and stock volume, accounting for 87.91% and 61.07% of the increase in natural forest area and stock volume respectively. Finally, the ecological service value of forests was further enhanced. The expansion of the area of forest resources, the increase in the stock volume, and the improvements in structure and quality laid the basis for enhancing the service functions of the forest ecosystems. According

State Forestry Administration: Main Results of the Eighth National Forestry Survey (2009–2013), 2014.

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to the results of the estimation, the total biomass of forest vegetation in China is 17.002 billion tons, the total carbon storage is 8.427 billion tons, the annual capacity for the conservation of water is 580.709 billion m3 , the annual capacity for the conservation of the soil is 8.191 billion tons, the annual capacity for the retention of fertilizer is 430 million tons, the annual capacity for the absorption of pollutants is 38 million tons, and the annual capacity for the retention of dust is 5.845 billion tons. These data show that the potential for the service value of China’s forest ecosystems is huge. Problems in the protection and utilization of forest resources are still serious. Although the quality of China’s forest resources has generally improved, it still lags far behind the world average level in terms of forest coverage, per capita forest area and per capita forest stock volume, etc. The rate of forest coverage is far below the global average level of 31%, the per capita forest area is only 1/4 of the world’s per capita level, and the per capita forest stock volume is only 1/7 of the world’s per capita level. Compared with China’s land area, the total volume of forest resources is still relatively insufficient, with low quality and uneven distribution. Further improvement of the quality of forest resources and the realization of the development of forestry are facing more serious challenges, which are highlighted in the following two aspects:

First, the space for expanding the forest area yet further is becoming smaller and it is more difficult. In the eighth forestry survey, the increase in the forest area was only 60% of what it was in the seventh forestry survey, and the growth rate of the forest area has begun to slow down; at present, the area of non-forested land for afforestation is only 6.5 million ha, which is 3.96 million ha less than what it was in the seventh survey; at the same time, only 10% of the land suitable for afforestation is of good quality, while 54% is of poor quality; two-thirds of the land suitable for afforestation is distributed in the northwestern part of the country, where the scarcity of water is severe, and in the southwestern part of the country, where the condition of the land is poor, and it has become increasingly difficult to further expand the forest area. Second, the phenomenon of illegal occupation of forest land remains serious. According to the results of the survey, in the five years from 2005 to 2009, the annual average area of forest land occupation exceeded 2 million mu, and about 50% was forest land. It could be said that these forest areas have been illegally occupied by various types of construction, and this phenomenon is particularly serious in the vast mountainous areas. With the acceleration of industrialization and urbanization, the destruction of forests in mountainous areas will become more serious, and the space for ecological construction would be further compressed.

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The Situation of Grassland Resources5

Basic situation of grassland. About 40% of China’s land area is covered by grassland, nearly 400 million ha, which is 3.2 times and 2.3 times the area of farmland and forest, respectively; regarding regional distribution, natural grassland is mainly distributed in the north and west of China. The grassland areas in the 12 western provinces (autonomous regions and municipalities) account for 84.2% of the country’s total grassland area, reaching 331 million ha. Among them, the six pastoral provinces (regions), namely Inner Mongolia, Xinjiang, Tibet, Qinghai, Gansu and Sichuan, have a grassland area of 293 million ha, accounting for about 75% of the country’s total grassland area. Most of the grasslands in South China are distributed in mountainous and hilly areas, mainly being grassy hills and slopes, covering an area of about 67 million ha, accounting for 16.75% of the country’s total grassland area.

According to the 2014 National Grassland Monitoring Report, in 2014, the overall covering in vegetation of the grasslands nationwide was 53.6%, which was 0.6% points less than what it was in 2013; the total output of fresh grass in the natural grasslands nationwide was 1.022 billion tons, which was 3.18% less than what it was in 2013; converted hay was about 315 million tons, the livestock carrying capacity was about 248 million sheep units, and both decreased by 3.20% compared with 2013. However, the production of fresh grass increased by 4.04% compared to the average of the last decade. (2)

Grassland utilization and construction. In terms of grassland utilization, the pastoral areas saw the implementation of the grassland rewards policy as an opportunity to effectively reduce the pressure of grazing on natural grasslands by increasing the construction of stalls and artificial forage land, improving livestock breeds, optimizing the structure of livestock herds, and promoting shed-feeding and in half shed-feeding, but there was still a widespread overload. In 2014, the average rate of livestock overload in key natural grasslands nationwide was 15.2%, which decreased by 1.6% points compared with 2013. Among them, the average rate of livestock overload in Tibet was 19%; the average rate of livestock overload in Inner Mongolia was 9%; the average rate of livestock overload in Xinjiang was 20%; the average rate of livestock overload in Qinghai was 13%; the average rate of livestock overload in Sichuan was 17%; and the average rate of livestock overload in Gansu was 17%.

In terms of grassland contracting, with the promotion of projects for the construction of grassland protection and grassland rewards policies, the pastoral areas accelerated the grassland contracting work. A total of 283 million ha of grasslands were contracted nationwide, including 223 million ha contracted to households, and 54 million ha contracted to joint households. 5

Ministry of Agriculture of the People’s Republic of China: 2014 National Grassland Monitoring Report, 2015.

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The project of returning grazing to grassland has been implemented since 2003, and by 2014 a total of RMB 21.57 billion of central government funds had been invested in the project, which played an important role in protecting the ecological environment of grassland and improving the people’s livelihood in the pastoral areas by arranging grazing prohibition and the resting of grazing land, dividing areas into rotational grazing fences, constructing artificial forage lands, and managing rockdeserted grasslands. In 2014, the central government invested RMB 2.0 billion in continuing the project of returning grazing to grassland in 12 provinces (regions), namely Inner Mongolia, Sichuan, Guizhou, Yunnan, Tibet, Gansu, Qinghai, Ningxia, Xinjiang, Heilongjiang, Jilin and Liaoning, as well as Xinjiang Production and Construction Corps, and arranged for the construction of grassland fencing for 3,083,000 ha, control of rock desertification in 80,000 ha, replanting and improvement of degraded grasslands in 1,061,000 ha, the construction of artificial forage lands in 139,000 ha, and the construction and renovation of sheds for livestock feedings for 118,000 households. Generally speaking, the continuing deterioration of China’s grassland ecology is effectively under control, mainly reflected by the controlled trend towards degradation of some typical grassland areas and the decreasing amount of sandy grassland areas; for the composition of the grassland ecosystem, the proportion of perennial pasture grasses showed an obvious tendency to increase, and the community structure also became increasingly stable. The construction of grasslands made obvious achievements. According to the monitoring of 82 counties (banners) in the project of returning grazing to grassland, the average covering of vegetation in the project area in 2014 was 65%, which was 6% points higher than the non-project area; the height and fresh grass yield were 18.9 cm and 3755.1 kg/ha, respectively, which had an increase of 53.6% and 30.8% compared with the non-project area. (3)

Serious problems in grassland utilization and management. The ecological construction of grasslands has always been one of the major issues of concern to the Party Central Committee and the State Council. Especially since the Twelfth Five-Year Plan, for promoting the development and ecological protection of pastoral grassland areas, the State has successively introduced a series of important policies, and has continued to increase its investments and promote the ecological protection and construction of grasslands. However, the building up of grasslands is still under tremendous pressures, which are highlighted in the following aspects:

First, the task of restoring the grassland ecosystem is still arduous, especially the restoration of moderately and severely degraded grasslands, which still account for more than one-third of the grassland area; meanwhile, the quality of the grassland ecosystem that has been initially restored is not high, and the vulnerability of the system is large, so that it will be degraded again in case of external disturbance. Second, the phenomenon of grassland destruction is still serious. Industrialization and urbanization are exerting an increasing amount of pressure on the grassland resources and environment. In some regions, the overuse of grassland by grazing

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and illegal exploitation of grasslands by industry and mining are widespread, causing serious and irreversible damage to the grassland ecology.

6.2.2 Analysis of the Environmental Situation 6.2.2.1 (1)

Agricultural Production Non-Point Source Pollution

The application of chemical fertilizers was strongly growing widespread.6 In the process of agricultural production, the replacement of organic fertilizers with chemical fertilizers led to increasingly serious environmental problems, and the use of applying fertilizer increased from 41,464,100 tons in 2000 to 58,388,500 tons in 2012, which had an increase of 16,924,400 tons, or 40.82%. Among those fertilizers, the use of agricultural nitrogen fertilizer increased from 21,615,600 tons in 2000 to 23,998,900 tons in 2012, which had an increase of 2,383,300 tons, or 11.03%; the use of agricultural phosphorus fertilizer increased by 1,381,000 tons, which meant an increase of 20.00%; the use of agricultural potash fertilizer increased by 2,411,200 tons, which meant an increase of 64.07%; and the use of agricultural compound fertilizer increased by 10,721,000 tons, which meant an increase of 116.80%.

The intensity of fertilizer applications could reflect the consumption of fertilizers, which was generally the use of fertilizers per unit of sown area. The above-mentioned calculations show that from 2000 to 2012, the application of agricultural fertilizers increased by 40.82%, while the area sown by crops increased by 4.55% during the same period. The results of the calculation indicate that the intensity of fertilizer application increased from 265 kg/ha in 2000 to 357 kg/ha in 2012, which witnessed an increase of 92 kg/ha or 34.69%. (2)

(3)

6

White pollution was becoming increasingly serious. Statistics showed that the use of agricultural plastic films increased from 642,100 tons in 1991 to 2,383,000 tons in 2012, which saw an increase of 1,740,900 tons, or 2.71 times. The time for the degradation of plastic films could be as long as 200–300 years, and their long-term use would result in serious white pollution. At present, the white pollution of plastic films is being solved around the world in two ways: First, the recycling of plastic films, but due to the large use and coverage area of mulches in China, films produced by enterprises are too thin, only 6 microns, which is less than the required 8 microns, 24 microns in the United States, 20 microns in South Korea, and 15 microns in Japan, and it is very difficult and economically unfeasible to recycle; second, the development of biodegradable agricultural films. This is the trend of agricultural film development. The pollution due to packaging materials of pesticides became an issue of increasing concern. The pollution due to packaging materials of pesticides,

Yu (2014).

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insecticides and herbicides (especially pesticide bottles) was increasingly becoming an important part of pollution of the rural ecological environment. In 2012, the use of pesticides nationwide was 1.8061 million tons, which could produce 3.61 billion packages as per the standard of 0.5 kg/piece. If the package weighed 0.25 kg/piece or 0.125 kg/piece, the number of packaging materials would be doubled or quadrupled. Crop straw became an important part of rural ecological governance. In the past, crop straw could only be used as energy for rural life and livestock feed, but now the range of its use has gradually expanded to fertilizer, fodder, edible fungus base material, industrial raw material, fuel, etc.

According to the FAO data, the coefficient of straw of various crops (K-value) is: 2.5 for maize, 1.3 for wheat and rice, 2.5 for soybeans and 0.25 for potatoes. The product of the coefficient of the residue of each crop and its food production is equal to its straw amount. Through this calculation, the straw amount produced by China’s crops reached 988.37 million tons in 2012. At present, the rate of utilization of crop straw in China reaches 69%, with 681.97 million tons of straw being utilized, but there are still 306.39 million tons of straw not being utilized. (5)

Pollution from large-scale farming is still not taken seriously. In recent years, the pollution caused by large-scale farming developed by farmers has shown a clear trend to increase. The survey finds that most rural large-scale farm owners are concerned about how to improve livestock and poultry production and quality and how to increase efficiency, while ignoring the impact of pollutants produced by livestock and poultry farming on the ecological environment, leading to a serious lag in pollution prevention and control measures. Due to arbitrary discharge and the piling of sewage and manure, on the one hand, water and soil ecological environments around the farms are seriously polluted; on the other hand, the surrounding air environment is also greatly affected.

6.2.2.2 (1)

(2)

Rural Domestic Pollution

Rural domestic waste. With the improvement of the living standard of farmers, the problem of rural domestic waste has become increasingly serious, bringing enormous pressure to the rural ecological environment. Compared with the past, the composition of rural domestic waste is more and more complex, including kitchen waste, women’s and children’s products, plastic products, etc., and the amount of waste generated is also increasing. However, the rate of treatment of rural domestic waste is extremely low, even sometimes no treatment is carried out. Relevant data show that by the end of 2013, only 218,000 of the country’s 588,000 administrative villages, or only 37%, treated domestic waste; and the proportion was less than 30% in 14 provinces, or even less than 10% in a few provinces. Rural domestic sewage. At present, the vast majority of rural households do not have sewers, and domestic sewage is dumped indiscriminately on the

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roads outside their yards or dumped with solid waste. The pollution caused by domestic sewage to the ecological environment has shown a marked increasing trend, and is becoming a serious problem for the rural ecological environmental. In Table 6.3, it can be seen that in 2012, villages produced 32.20 million m3 of domestic sewage per day, but the rate of treatment was only 8%, far lower than 87% in cities, 75% in counties and 28% in towns, with 29.27 million m3 of domestic sewage still untreated. In terms of changes in the rate of treatment of domestic sewage in China’s rural areas, since 2008, the rate of treatment increased by one percentage point per year (see Fig. 6.3), indicating that the treatment of rural domestic sewage received increasing attention. Table 6.3 Discharge and treatment of domestic sewage in China in 2012 Category

Discharge of domestic sewage (104 m3 /d)

Rate of treatment of domestic sewage (%)

Untreated domestic sewage (104 m3 /d)

Cities

11,418

87

1450

Counties

2336

75

578

Towns

2677

28

1926

Villages

3220

8

2927

Year Cities

Counties

Towns

Villages

Fig. 6.3 Changes in the rate of treatment of domestic sewage in China

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6.3 Policy Options for Strengthening Rural Ecological Governance 6.3.1 Mechanisms for the Appraisal of the Performance Ofgovernment Officials 6.3.1.1

Mechanism of Appraisal of Reform Performance

We should further adjust the content of the performance appraisal of leading cadres, dilute the GDP appraisal, and incorporate ecological construction indicators into the appraisal system in order to establish a target system, appraisal methods, and reward and punishment mechanisms that reflect the requirements of an ecological civilization.

6.3.1.2

Establish a Mechanism for Resource and Environmental Auditing for Government Officials

During the term of office of each government, two resource and environmental audits are conducted, one at the start and one at the end. At the beginning of the term, an audit of regional resources and the environmental situation is carried out; when the term ends, another audit is done to determine the level of resource use and how the environment is according to the level of regional economic development, and if the level exceeds what it should be, it is considered unqualified.

6.3.2 Improving the Evaluation System of Economic and Social Development To a certain extent, the evaluation system for economic and social development is the direct cause of the ecological environmental problems, so it should be improved in accordance with the statement that “clean, clear waters and lush mountains are invaluable assets”. For this purpose, first, the indicators reflecting the construction of a resource-saving and environment-friendly national economic system need to be incorporated into the evaluation system, such as the proportion of the fiscal expenditure spent on investing in environmental protection, the proportion of the GDP for investment in social environmental protection, the rate of output of resources, and the intensity of pollution emissions. Second, the indicators reflecting the completion of energy conservation and the binding indicators of emission reduction should be included in the evaluation system, such as the proportion of non-fossil energy in primary energy consumption, energy consumption per unit of GDP, carbon dioxide emissions per unit of GDP, and pollutant emissions per unit of GDP. Third, the

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indicators of the ecological environment and the situations of the resources should be contained in the evaluation system, indicators such as surface water quality, air quality in cities above the prefecture level, forest resources and so on. Fourth, the indicators reflecting the resolution of prominent environmental problems should be absorbed in the evaluation system, such as heavy metal pollution of soil, domestic sewage and garbage treatment and resource utilization. Fifth, the indicators reflecting the public participation in environmental protection and social satisfaction should be incorporated into the evaluation system, indicators such as public participation in environmental protection, social satisfaction, etc.

6.3.3 Strictest Farmland Protection System In terms of farmland protection, in the past, we always emphasized the 1.8-billion-mu red line in the protection of farmland, which is a mere quantitative concept, but there was a lack of a qualitative concept. Therefore, in implementing the strictest farmland protection system, first, we should adhere to both quantity and quality, and strictly designate the permanent basic farmland; second, land productivity should be used as a criterion to ensure the red line of 1.8 billion mu of farmland; third, the quality of the farmland should be improved for the goal of increasing land productivity; fourth, we should strengthen the ecological remediation of soil pollution for the goal of improving the quality and safety of agricultural products; fifth, we should integrate land consolidation technology and shorten the cycle of cultivating land power; and sixth, a mechanism for economic compensation for farmland protection should be established.

6.3.4 Strictest Water Resource Management System We should strictly implement the water resource management system. In terms of the control of total water consumption, a management plan and a water resource demonstration should be carried out, the total amount of water intake in river basins and regions should be strictly controlled, the water intake permits, paid use of water resources, and underground water management and protection should be strictly enforced, and the unified dispatch of water resources should be enhanced; in terms of the control of water efficiency, we should fully strengthen the management of both water conservation and water quotas, and accelerate the technological transformation of water conservation; in terms of pollution limitation in water functional areas, we should have strict supervision and management of those areas, reinforce the protection of the sources of drinking water, and promote the protection and restoration of the water ecosystem.

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6.3.5 Strictest Environmental Protection System The environmental protection system is a complex systemic project involving many sectors, and there is a need to strengthen cooperation among the sectors in order to implement the system as a genuine national policy. To this end, it is necessary to work in the following areas: First, we should speed up the systematic study and top-level design of the strictest environmental protection system. In the field of environmental protection, we must accelerate the systematic study of the strictest environmental protection system; and the top-level design of the strictest environmental protection system should be completed on the basis of a full review of the current environmental protection system and an analysis of the needs of central and local environmental management. Second, we should expedite the revision and enactment of laws and regulations related to environmental protection. The revision of laws and regulations such as the Environmental Protection Law and the Law on the Prevention and Control of Air Pollution should be carried out; meanwhile, the formulation of laws and regulations on controlling soil pollution and nuclear safety should be expedited. Third, we should strengthen the building up of the capacity of environmental management at the grassroots level, including building up organizations, human resources, environmental protection facilities and technical capacity. Fourth, a recycling mechanism for pesticide packages and plastic films should be established as soon as possible. Incentives for the recycling of pesticide packages and plastic films should be stipulated to increase the participation of farmers, and bring into play the role of sales enterprises in the recycling of pesticide bottles, fertilizer bags and other packaging materials. In the form of partial subsidies, the pesticide operators should be encouraged to take charge of recycling, and qualified enterprises should centralize the treatment, so as to reduce pollution of the environment and of the sources of water. Fifth, we should gradually build an innovative mechanism for models of rural infrastructure and environmental management, overcome the problem of emphasis on construction while ignoring management, ensure that the projects are built for the goal of serving the masses in the specific area, clarify management subjects and management responsibilities, strengthen the technical training for managers, and improve their knowledge and management skills. Sixth, we should establish an industrial system for the coordinated development of planting and breeding, and develop circular agriculture.

6.3.6 Paid Use of Resources and a System of Ecological Compensation First, we should have regulations on the paid use of resources and ecological compensation, establish an evaluation system, and broaden the financing channels, and consideration may be given to issuing a lottery ticket for the paid use of resources and an ecological compensation fund; second, the price reform of natural resources and their products should be accelerated to fully reflect the market supply and demand,

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the scarcity of resources, the cost of ecological environmental damage and the benefits of restoration; third, we should adhere to the principles of paying for the use of resources, and whoever pollutes the environment and destroys the ecology, should be the ones who pay for it, and gradually extend the resource tax to the occupation of various natural ecological spaces; fourth, the mechanism for ecological compensation regarding key ecological functional areas should be improved, and a horizontal ecological compensation system should be promoted among the regions.

6.3.7 Accountability System for Ecological Environmental Protection 6.3.7.1

Implementation of a Lifelong Accountability System for Ecological Environmental Damage

A backtracking mechanism should be set up to investigate the responsibility of the leaders and responsible persons pursuant to the law and discipline for the occurrence of major environmental emergencies, obvious deterioration of environmental quality during their tenure, blind decision-making without regard for the ecological environment, causing serious consequences, and the use of power to interfere with and hinder environmental regulation and law enforcement. The level of accountability should be raised, and whoever makes the decision should be held accountable, so as to enhance the awareness of key leaders regarding the ecological risks, especially those first-in-command, and put an end to “making decisions arbitrarily and ending terms of office without accountability”!

6.3.7.2

Enforcement of Criminal Liability of the Subject Responsible for Environmental Damage

Enterprises that cause major accidents regarding environmental pollution should be strictly enforced and held criminally liable. The punishments should not be used as a substitute for laws, otherwise China’s ecological environmental protection can only be empty words.

6.3.8 A Compensation System for Environmental Damage First, we will further improve the environmental protection enforcement agencies, strengthen the independent enforcement powers and implement a compensation system. Second, we should reinforce the legislation in key areas and further enhance and improve laws and regulations relating to ecological environmental protection.

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Through judicial channels, we will sue against those who pollute the environment and destroy the ecology, seek compensation for damage to the ecological environment, and protect the rights and interests of citizens with a sound compensation system for environmental damage. Finally, the environmental demands of the public should be incorporated into institutionalized and legal channels to safeguard environmental justice, protect the environmental rights and interests of the public, maintain social harmony and stability, and protect the natural ecological environment.

Reference Yu F (2014) Eco-environmental problems and its policy suggestions for the construction of rural eco-civilization. J Poyang Lake 3

Chapter 7

Study on the Simulation Model of the System Dynamics of Urban Comprehensive Carrying Capacity Wenlong Li

Abstract This paper develops the research on a simulation model of urban comprehensive carrying capacity based on the research theory of a system for urban comprehensive carrying capacity. A model of system dynamics is applied to simulate the changes in the urban comprehensive carrying capacity under different socioeconomic scenarios of Hohhot in the next 10 years, obtain a relatively optimum solution, and put forward the countermeasures for the urban carrying capacity of Hohhot according to the results of the simulation. Keywords Urban comprehensive carrying capacity · System dynamics · Hohhot

7.1 Introduction With the improvement of the level of the world’s urbanization, the government and experts gradually attach importance to the research on the issues related to the urban comprehensive carrying capacity, which have become the popular issues for research in recent years. The urban comprehensive carrying capacity not only affects the development of the city itself, but it also has an important influence on the development of the region, thus being of great significance to the sustainable development of the city and the region. The term “carrying capacity” was first proposed by Malthus in An Essay on the Principle of Population in 1812, for expressing the relationship between population carrying capacity and food carrying capacity. There is already a history of nearly 100 years for the research on the urban carrying capacity at home and abroad. The research can be divided into two types: one type of research mainly studies the carrying capacity of a single resource element, such as urban land resource carrying capacity, water resource carrying capacity, mineral resource carrying capacity, population carrying capacity and so on. For example, Allan (1949) defined the concept of land carrying capacity, including farmland carrying capacity, forest carrying capacity W. Li (B) College of Resources and Environmental Economics, Inner Mongolia University of Finance and Economics, Hohhot 010070, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_7

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and grassland carrying capacity; Millington (1973) took the carrying capacity of Australian land resources as his research object, applied the multi-objective method of analysis of decisions and calculated the carrying capacity of Australian land resources. In China, the research of urban carrying capacity originated in the 1980s. Chen Baiming et al., from the perspective of the relationship between the productivity of land resources and the size of the population, conducted a classification study of China’s land resources; Yang Xiaopeng (1993) established a system for the evaluation of the indicators of land population carrying capacity to study the population carrying capacity of Qinghai Province; Deng Yongxin (1994) added the concept of environmental carrying capacity based on the system of the carrying capacity established before, built a more complete system of indicators of the carrying capacity and studied the population carrying capacity of the land in Talimu, Xinjiang; Xu Xinyi (1997), with a number of cities in North China as the object of research, built a system for the evaluation of the indicators of the water resource carrying capacity and predicted and evaluated the carrying capacity of water resources; Xu Qiang (1996) regarded the urban mineral resources as the object of evaluation, established a system of indicators for the evaluation of the mineral resources and studied the mineral resource carrying capacity of the city. Another type of research mainly focuses on how to concentrate single elements of urban resources for the evaluation and research of the comprehensive potential of urban resource elements, such as integration of land resources, water resources and mineral resources for the potential evaluation of the urban area. For example, Schneider (1978) first proposed that the foundation of the research on carrying capacity should have the natural or man-made systems as the object of research, the urban carrying capacity should be studied from a systematic viewpoint, that is, urban comprehensive carrying capacity; Oh Jeong (2002) enriched the content of the urban comprehensive carrying capacity, and he proposed that the urban comprehensive carrying capacity should include population carrying capacity, land carrying capacity, water resource carrying capacity and other elements that allow for urban sustainable development. In China, the research mainly pays attention to the size of city capacity and appropriate city size, such as the studies made by Qiao Jianping, Wu Wenheng, Li Wangming, Tang Jianwu, etc. Thus, in recent years, with the improvement of the level of urbanization, the research on urban carrying capacity is also gradually enriched, especially with a focus on the urban comprehensive carrying capacity. Since a city is a huge system, the urban carrying capacity does not depend on the carrying capacity of a single resource element in the city, or its simple arithmetic relationship. The reasonable mix of internal elements of a city has an important influence on the urban carrying capacity. Therefore, this paper regards the urban comprehensive carrying capacity as the research prospective and believes that the research must be systematic, dynamic and open. Especially in recent years, the urban population has increased, the environmental quality is declining, and the systematic carrying capacity of the urban environment is very important for the urban comprehensive carrying capacity, which is explored in this paper from the aspects of population carrying capacity, economic carrying capacity, environmental carrying capacity, and land carrying capacity. The system of urban comprehensive carrying capacity includes the

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four systems: environmental carrying capacity—population carrying capacity—land carrying capacity—economic carrying capacity. Due to the different research perspectives on the urban carrying capacity as mentioned above, the methods of research of urban comprehensive carrying capacity are also different, including: the single factor method of evaluation, the multi-factor multi-objective planning method, the agricultural ecosystem evaluation method, and the method of analysis of system dynamics. The first three methods mainly study the carrying capacity from the angle of single factors, which can play a certain role in the research of urban carrying capacity, but without some deficiencies. They only carry out the analysis of the single factor, and they carry out the processing of the simple mathematical relationship of the results of the influence of the analyzed factor, but fail to notice the relationship between each element. Hence, they cannot systematically and dynamically study the urban comprehensive carrying capacity, and there are often big errors between their research results and the actual urban comprehensive carrying capacity. The model of system dynamics (abbreviated as “SD model” for short) is a model of structure–function and dynamic behavior characteristics, based on the close mutual dependence between system behavior and internal mechanism, acquired through the process of mathematical modeling and manipulation, and gradually discovers the cause and effect of generating changes in morphology, which is called structure in system dynamics. It is premised on the realistically existing system, builds a dynamic simulation model according to the historical data, practical experience and the relationship of the system’s internal mechanism, carries out experiments on the systematic changes possibly caused by various influencing factors, thus seeking opportunities and ways to improve the system behavior. Hohhot is a city located in the belt where there is agricultural and pastoral interweaving, where the ecosystem is fragile, the urban comprehensive carrying capacity is small, and there is an influx of rural population, the quality of urban environment is declining. The systematic research of the urban comprehensive carrying capacity of Hohhot is of great significance for its sustainable development. Therefore, this paper utilizes the system dynamics model to simulate the urban comprehensive carrying capacity of Hohhot in the next 10 years under different states of the system.

7.2 The Establishment of the System for the Evaluation of the Indicators of the Urban Comprehensive Carrying Capacity 7.2.1 Principles for the Establishment of the System of Indicators The system of the urban comprehensive carrying capacity is made up of multiple components with complex relationships. In order to correctly embody such a complex

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multi-dimensional vector, the following principles should be followed in determining the evaluation indicators: (1) the principle of appropriate evaluation of the right place: to reflect the characteristics of the regional natural, social and economic conditions of Hohhot; (2) the principle of comprehensiveness: the selected indicators can comprehensively reflect the urban comprehensive carrying capacity; (3) the principle of universality: the indicators with the commonalities should be selected as far as possible; (4) the principle of hierarchy: the urban comprehensive carrying capacity is a complex system, and the system of hierarchical indicators should be established according to different degrees of importance and with the inclusion relationship of the system indicators.

7.2.2 Framework of the System of Indicators A system of indicators of urban comprehensive carrying capacity (see Table 7.1) is built according to the principles stated above.

7.3 Study of the System of Urban Comprehensive Carrying Capacity 7.3.1 Relationships Among the Factors of the System of Urban Comprehensive Carrying Capacity According to the basic principles and composition of system dynamics, the system analyzes the degree of interaction of the components of urban carrying capacity (population factors, economic factors, land factors and environmental factors), hence forming a multi-positive and negative feedback structure of multi-circuit relationships among the factors (see Fig. 7.1).

7.3.2 Establishment of the SD Model Equations for the Urban Comprehensive Carrying Capacity The meanings of the symbols in the equation are as follows: L is the equation of state variable; R is the equation of rate; V is the auxiliary variable; P is the parameter; G, X, J, GX, XJ are events used to distinguish the sequence of events; G is a time point in the past; X is the present; J is a time point in the future; GX is a period of time from a time point in the past to the present; XJ is the period from the present to a time point in the future; DT is the event step.

Population carrying capacity

Urban comprehensive carrying capacity (D)

Environmental carrying capacity

Land carrying capacity

Economic carrying capacity

Criterion layer

Target layer

Table 7.1 The system of indicators of urban comprehensive carrying capacity

Rate of change in water area

Forest coverage rate

Rate of change in urban green space

Growth rate of residential land

Growth rate of industrial land

Grassland area

Farmland area

Engel’s coefficient

Value of tertiary sector

Value of secondary sector

GDP growth rate

Mortality

Family planning factor

Percentage of women of childbearing age

Natural growth rate

Factor layer

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Urban comprehensive carrying capacity

Livestock carrying capacity

Food-based population carrying capacity

Residents’ consumption expenditure

Grain production per unit area

Total grain production

Food-based population carrying capacity

Farmland area

Grain planting area

Scientific and technological progress Residents’ Engel coefficient

Non-agricultural population

Level of urbanization

Grain supply/demand gap Garden area

Water consumption in agriculture, forestry and animal husbandry

Grain demand

Environmental eco-benefits Forestry area

Birth population Currency-based population carrying capacity

Death population

Total population

GDP per capita

Value of tertiary sector

Floating population

Water resource carrying capacity

Domestic water consumption Industrial water consumption

Death population

Ecological water use

Three-waste discharge

Forest coverage rate

Area of unused land

Water consumption

Volume of water supply

Water area

Construction land

Area of residential, industrial and mining land Waste treatment

Financial input

Land area for transportation

Fig. 7.1 Cause and effect of factors of the system of urban comprehensive carrying capacity

7.3.2.1

SD Model Equations for the Population Module LFNRK · K = FNRK · J + DT × FNRKZL · JK NRK · K = NRK · J + DT × NRKZL · JK RFNRKZL · KL = FNRK · K × FNRKZR NRKZL · KL = NRK · K × NRKZR AZRK · K = FNRK · K + NRK · K

where FNRK denotes the number of the members of the non-agricultural population, NRK denotes the number of the members of the agricultural population, FNRKZL denotes the annual increase in the non-agricultural population, FNRKZR denotes the annual growth rate of the non-agricultural population, NRKZL denotes the annual increase in the agricultural population, NRKZR denotes the annual growth rate of the agricultural population, and ZRK denotes the total population; and the other symbols in the equations have the following meanings: L represents the equation of state variable, R represents the equation of rate variable, A represents the equation of the auxiliary variable; K, J, and JK are used as time subscripts to indicate the sequence of time, K represents the present, J represents the moment of the very recent past, JK represents the period from a time point in the past to the present, and KL represents the period from the present to a time point in the future.

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SD Model Equations for the Economic Module LGYCZH · K = GYCZH · J + DT × GYCZHZL · JK RGYCZHZL · KL = GYCZH · K × CYCZHZR ALSCL · K = LSDC · K × KGGDMJ · K

In the equations, GYCZH is the value of the industrial output, GYCZHZR is the annual increase in the value of the industrial output, GYCZHZL is the annual growth rate of the value of the industrial output, LSCL is the grain production, and LSDC is the grain production per unit area.

7.3.2.3

SD Model Equations for the Land Module

LDXSL · K = DXSL · J + DT × DXSLBL · JK DBJL · K = DBJL · J + DT × DBJLBL · JK KGGDMJ · K = GYCZH · J + DT × (KGGDMJZ · JK - KGGDJ · JK) RDXSLBL · KL = DXSL · K × DXSLBR DBJLBL · KL = DBJL · K × DBJLBR AKLSZL · K = DXSL · K + DBJL · K + LYDS · K IWSD · K = (XSZL · K - KLSZL · K)/XSZL · K RJGMJ · K = KGGDMJ · K/ZRK · K where DXSL is the area of construction land, DXSLBL is the increase in construction land, and DXSLBR is the annual rate of changes in construction land.

7.3.2.4

SD Model Equations for the Environment LLDMJ · K = LDMJ · J + DT × LDMJBL · JK CDMJ · K = CDMJ · J + DT × CDMJBL · JK

where LDMJ is the area of urban green space, LDMJBL is the net increase in the area of green space, CDMJ is the grassland area, and CDMJBL is the annual net increase in the area of grassland.

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7.4 Analysis of the Results of the Simulation of the Urban Comprehensive Carrying Capacity SD Model System of Hohhot According to the dominant factors and correlation factors of the urban comprehensive carrying capacity and their relations, the urban comprehensive carrying capacity of Hohhot is simulated by applying the system dynamics model, with the results of the simulation as follows. Proposal 1 (see Table 7.2). This is a low standard input proposal based on the city’s current construction land and the efficiency of the use of the urban construction land. It can be used as a basic reference proposal for the urban comprehensive carrying capacity. The results of the simulation are shown in Table 7.3, where it can be found that under the current speed of urban development, the urban comprehensive carrying capacity of Hohhot city is declining year by year. It can meet the well-off level, but within a short period. With the massive development and destruction of resources, the quality of the urban environment will continue to decline, the carrying capacity will become smaller and smaller, so this development model cannot meet the requirements of the sustainable development of Hohhot. Proposal 2 (see Table 7.4). Results of the simulation results (see Table 7.5). Under this proposal, the urban comprehensive carrying capacity of Hohhot shows an increasing trend, but the rate of the increase in urban carrying capacity is lower than the population growth rate, the population that Hohhot can carry is still lower than the expected population, and the population is always overloaded. Proposal 3 (see Table 7.6). This is a high-input proposal (see Table 7.7). Under this proposal, the rate of increase in the urban comprehensive carrying capacity of Hohhot is larger than the urban population growth rate. The main reasons are that the city continuously increases its investment in infrastructure, improves the scientific nature of resource development and increases its efforts to address environmental problems. Table 7.2 Results of the prediction of the system of indicators of Hohhot’s urban comprehensive carrying capacity Year

Total urban population (×104 people)

Urbanization level (%)

GDP (100 M RMB)

2005

211.8

47.2

545.80

570,876

685,208

17.92

2010

271.13

60.15

1455.50

551,193

656,942

23.47

2014

316.50

66.52

3511.26

537,550

637,469

28.5

2025

375.14

72.6

524,245

618,573

36.2

10,360.2

Farmland area (km2 )

Grassland area (km2 )

Forest coverage rate (%)

Total urban population (×104 people)

211.8

271.13

316.50

375.14

Year

2005

2010

2014

2025

221.81

217.52

213.26

207.51

277.07

271.67

266.38

259.15

316.52

310.35

304.31

296.04

Food carrying capacity

1229.62

956.32

694.23

352.64

1860.30

1432.12

1047.64

528.81

2271.99

1756.01

1274.35

646.25

Economic carrying capacity

Table 7.3 Results of the prediction of the system dynamics model of Hohhot’s urban comprehensive carrying capacity

731.21

587.99

454.90

281.36

1067.85

856.32

657.12

394.01

1287.60

1024.21

778.20

470.11

Urban comprehensive carrying capacity

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Table 7.4 Results of the prediction of the system of indicators of Hohhot’s urban comprehensive carrying capacity Year

Total urban population (×104 people)

Urbanization level (%)

2005

213.86

45.71

2010

248.13

56.24

2014

276.12

62.73

2025

308.23

68.11

GDP (100 M RMB)

Farmland area (km2 )

Grassland area (km2 )

Forest coverage rate (%)

407.52

570,876

685,208

17.92

1456.02

562,932

670,948

23.47

3623.47

557,325

660,943

28.5

9013.05

551,774

651,089

36.2

7.5 Conclusions and Suggestions This paper uses the principles of system dynamics to establish a model of urban comprehensive carrying capacity. The conclusion derived from the research of the comprehensive carrying capacity of Hohhot is that: since 2008, the comprehensive carrying capacity of Hohhot has been overloaded, and in 2014, it reached the degree of serious overload. This indicates that, although Hohhot has achieved rapid economic development in recent years, especially the fastest developing real estate industry, with obvious economic benefits, the urban population has increased year by year along with economic growth, and there are certain contradictions between the economic and social development and the sustainable development of Hohhot. In order to improve the urban comprehensive carrying capacity of Hohhot, this paper suggests: (1)

(2)

(3)

That Hohhot needs to strictly control its urban population, reduce the pressure on the urban environment, and decrease the excessive consumption of resources. These are the effective ways to improve the urban carrying capacity of Hohhot. Hohhot must accelerate the optimization and upgrading of its industrial structure and the adjustment of the economic structure within the industry, develop a low-carbon economy and a circular economy, reduce the speed of the development of the energy economy at the cost of resource consumption, improve the efficiency of resource utilization, and enhance the urban carrying potential of Hohhot. Hohhot should accelerate the completion of its supporting sewage interception projects and the construction of a system of pipeline network collection to ensure that the stable discharge of sewage meets the standard and that the rate of sewage treatment meets the requirements. It should focus on solving the problem of sorting and treating industrial solid waste and domestic garbage, and reasonably adjust the facilities to solve the current overload of some facilities.

Total urban population (×104 people)

213.86

248.13

276.12

308.23

Year

2005

2010

2014

2025

210.01

209.97

208.26

207.50

273.07

271.00

267.95

258.15

300.06

297.57

294.10

293.04

Food carrying capacity

1129.62

907.32

653.23

351.57

1762.30

1437.12

1045.64

522.81

2270.9

1757.0

1274.3

648.25

Economic carrying capacity

Table 7.5 Results of the prediction of the system dynamics model of Hohhot’s urban comprehensive carrying capacity

724.21

569.99

454.90

283.36

1046.85

857.32

657.12

394.01

1241.60

1014.21

772.20

468.11

Urban comprehensive carrying capacity

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Total urban population (×104 people)

218.89

248.13

276.06

307.29

Year

2005

2010

2014

2025

68.26

62.71

56.3

45.72

Urbanization level (%)

4371.55

2178.60

1080.25

406.21

GDP (100 M RMB)

551,774

557,325

562,932

570,876

Farmland area (km2 )

651,089

660,943

670,948

685,208

Grassland area (km2 )

Table 7.6 Results of the prediction of the system of indicators of Hohhot’s urban comprehensive carrying capacity

36.9

28.5

23.80

17.98

Forest coverage rate (%)

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Total urban population (×104 people)

218.89

248.13

276.06

307.29

Year

2005

2010

2014

2025

211.01

209.97

208.26

207.50

277.07

271.00

266.95

259.15

301.06

299.57

298.10

296.04

Food carrying capacity

1129.62

906.32

654.23

352.57

1760.30

1432.12

1047.64

528.81

2271.9

1756.0

1274.3

646.25

Economic carrying capacity

Table 7.7 Results of the prediction of the system dynamics model of Hohhot’s urban comprehensive carrying capacity

731.21

587.99

434.90

280.36

1067.85

856.32

657.12

394.01

1245.60

1024.21

778.20

470.11

Urban comprehensive carrying capacity

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References A1LAN WA (1949) Studies in African land usage in northern rhodesia,rhodes livingstone papers and No.15. Cape Town, Oxford University Press Chen B (2001) A blueprint of the land use region based on the regional indicator system for sustainable land use in China. Progress Geogr 3 Danlin Y, Hanying M et al (2003) Study on regional carrying capacity: theory, method and example—take the bohai-rim area as an example. Geogr Res 2:201–211 Jianping Q, Huachang W (1997) Study on the scale of cities. Urban Studies 4:48–49 Jianwu T, Haicheng G, Wenhu Y (1997) Environmental carrying capacity and its application on environmental planning. China Environ Sci 1:6–9 Millington R, Gifford R et al (1973) Energy and how we live. Australian UNESCO seminar,committee for man and Biosphere Oh K, Jeong Y, Lee D et al (2002) An intergrated frame work for the assessment of urban carrying capacity. Korea Plan Assoc 37(5):7–26 Qiang X (1996) An exploration of several problems regarding the analysis of the carrying capacity of regional mineral resources. J Nat Resour 2:135–144 Schneider D (1978) The carrying capacity concept as a planning tool. Chicago, American P1anning Association Wangming L, Rong P, Weifeng Q (2003) The research of urban population capability based on the concept of a fine environment with Hangzhou city as a case. Econ Geogr 1:38–41 Wenheng W, Shuwen N, Xiaozu H, Mingming Z (2006) A study on valley-city population capacity in western China—taking Tianshui city as an example. Econ Geogr 4:615–618 Xiaopeng Y, Zhiliang Z (1993) System dynamics of the population carrying capacity of land resources in Qinghai Province. Scientia Geographica Sinica 1:69–77 Xu X (1997) Macroeconomic water resources planning theory and methods in North China, The Yellow River Water Conservancy Press Yongxin D (1994) Population carrying capacity system and study—the case of Talimu Basin. Arid Zone Res 2:28–34

Chapter 8

Construction and Practice of the Mechanism for Public Participation for Ecological Civilization Construction Based on the TAM Model Shuai Zhai Abstract The construction of an ecological civilization has an important role and significance in the new normal of China’s economic development, but the mechanism for public participation has not yet formed a system despite attracting widespread attention. In order to build a mechanism for public participation for the construction of an ecological civilization that meets public demands and practical operational needs, this paper utilizes the TAM model to analyze the motivation of public participation in the construction of an ecological civilization from the three dimensions of “ease of knowledge, ease of use, and ease of interest” of public participation, it builds a mechanism for public participation for the construction of an ecological civilization based on the “O2O” model, and proposes the corresponding suggestions and countermeasures for the three important entities of the construction of an ecological civilization: government, community and public. Keywords TAM model · Construction of an ecological civilization · Mechanism for public participation

8.1 Introduction The 18th CPC National Congress has elevated ecological civilization to a key position that is important for the well-being of the people and the future of the nation, and the construction of an ecological civilization has also become an important part of socialism with Chinese characteristics. In 2005, when Xi Jinping, then Secretary of the CPC Zhejiang Provincial Committee, visited Anji, he put forward the famous theory that “clear, clean waters and lush mountains are invaluable assets” (“Two Mountains Theory”). In 2014, Huzhou was approved as the “National Ecological Civilization Pilot Demonstration Zone”.

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In the process of the construction of an ecological civilization, the government is the most important promoter, and the public is the most important basis for participation. The Clean Air Act in the United States, the Energy Conservation Act in Japan, the “4000-people Environment Group” in Brazil and the “Environmental Movement” in Australia are just some of the examples. These foreign experiences prove the possibility and importance of public participation in the process of the construction of an ecological civilization. Since the beginning of the twenty-first century, domestic scholars have conducted a lot of theoretical and practical research on public participation in the construction of an ecological civilization from the perspectives of motivation for public participation, implementable plans and the possibility for public participation. Ten years after the “Two Mountains Theory” was proposed, both Zhejiang Province and Huzhou City have made some achievements and summed up some experiences regarding the construction of an ecological civilization. But on the whole, no theoretical system or systematic mechanism has yet been formed; hence, exploring new paths and mechanisms for public participation in the construction of an ecological civilization is of great theoretical and practical significance to the future construction of an ecological civilization pilot demonstration zone in Huzhou, and to the construction of a “beautiful Zhejiang” and a province with an ecological civilization.

8.2 Literature Review The research on mechanisms for public participation was first applied in political science, and in the mid-twentieth century, it was extensively applied to the research on consumer behavior and other socio-economic aspects. Wang Shuming and Yang Hongxing (2011) took the Xiamen PX incident, a typical case of public participation in the construction of an ecological civilization as an example, analyzed the importance of public participation in that construction in China and its current status by revealing the connotation of public participation and its theoretical basis, and proposed the countermeasures to strengthen public participation in the construction of an ecological civilization. Pei Shu’e et al. (2010), starting from the contradiction between population and resources, analyzed the drive of economic development and economic interests. The seriously lacking environmental education and poor public awareness of environmental protection were the constraints on public participation, and there were also limitations at the operational level. Li Zongyun (2009), Wang Yue and Fei Yanying (2013) analyzed various constraints of public participation in the construction of an ecological civilization, and concluded that there was a lack of a guarantee of a sound legal system as well as authority and accountability of government; the influence and role of non-governmental organizations (NGOs) needed to be strengthened; and the information disclosure system for the construction of an ecological civilization was not sound.

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Tang Wenhua and Duan Yanfeng (2014), Zhu Xiaoxiao (2013), Qin Shusheng and Zhang Hong (2014) also arrived at the conclusion that public participation in the construction of an ecological civilization was a lack of proactiveness, without an effective mechanism for incentives and guidance. Yang Qile (2014) explored and sorted out the government’s ecological environmental governance from a political science perspective, with consideration to the multiple disciplines and perspectives, and emphasized the government’s role in guiding the public to participate in the construction of an ecological civilization in terms of institution building, publicity and guidance. Hao Weining (2013), Nan Haofeng (2013), Liu Shan and Mei Guoping (2014), Li Ying and Liu Ben (2012) et al. analyzed the motivations and demands for public participation by the sample surveys in Jiangxi, Hunan and Heilongjiang, with the hope to design a comprehensive system that is community-based, obeying the public’s wishes and dominated by the government. Mao Mingfang (2009), Zhang Jiagang (2012) and Shao Guangxue (2014) et al. stressed that we should strengthen the construction of an ecological civilization from four aspects: economy, institution, technology, ideology and culture, and they explored the establishment of a longterm mechanism of ecological civilization by strategic planning, a legal system and industrial support. TAM (Technology Acceptance Model) was first proposed by the American scholar Davis in 1967 based on the TRA model. It is “an explanatory model for the degree to which and way the public accepts the technology mechanism”, which integrates the self-efficacy theory and expectancy theory, and takes full account of the fact that “useful” technology can improve the performance and ease of operations under certain circumstances, and enhance user satisfaction, etc., (Fig. 8.1). In the 50 years that followed, the TAM model has been used extensively in the research of many aspects such as consumer behavior, e-government mechanisms. The research of Negash and Igbaria (2003) pointed out that the perceived usefulness and ease of use could greatly enhance the public acceptance of the technology and allowed them to be satisfactory with voluntary public participation in the mechanism and feedback on its use. DeLone and McLean (2003) indicated that the public must start from their motivation for participation in the government-guided technology

Perceived usefulness Perceived usefulness Perceived ease of use

Fig. 8.1 TAM model

Perceived usefulness

Perceived usefulness

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mechanism, and they could have greater satisfaction and enhance the participation only when they had a deep perception of the mechanism. A Chinese scholar Lin Hui (2007), in the research of the community volunteer behavior in the United States, utilized the TAM model to analyze the mechanisms of volunteer participation in community public services and considered that an effective mechanism for participation must enhance the ease of use and ease of knowledge of the participants. A large number of studies by scholars at home and abroad have provided the theoretical basis and empirical data for this paper, but most of relevant literature still adopts the qualitative analysis and lacks quantitative research. There are many theoretical suggestions for the building up of a mechanism, but few empirical tests. Therefore, based on the TAM model, this paper empirically analyzes the motivations and demands of the public to participate in the construction of an ecological civilization and combines the existing theories to establish a “mechanism for public participation in the construction of an ecological civilization” that meets the public demands and government expectations from both online and offline dimensions.

8.3 Model and Hypotheses 8.3.1 Research Model With reference to the results of previous research, this research model was constructed based on the public participation theory and the TAM model, and on the improvement of the TAM model by Davis (1989), Negash and Igbaria (2003) and Lin Hui (2007) et al., with the addition of the indicator of “ease of interest” for evaluating the interest of public participation. As shown in Fig. 8.2, the degree of satisfaction with the mechanism for participation in ecological civilization and the degree of public

Ease of knowledge

Ease of use

Degree of satisfaction

Participatory behavior

Ease of interest

Fig. 8.2 Research model of degree of satisfaction and participation behavior of public participation in th construction of an ecological civilization

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participation were analyzed from the three dimensions, namely “ease of use”, “ease of knowledge” and “ease of interest”. Here, “ease of knowledge” means that the mechanism for public participation in the construction of an ecological civilization is transparent, and its mechanism and operation are easy for the public to learn about; “ease of use” means that it is not very difficult to use the mechanism for public participation in the construction of an ecological civilization, and the public can easily participate in life or at work or in leisure time; “ease of interest” means that the mechanism for public participation in the construction of an ecological civilization is interesting and can increase the public’s interest in their daily work and life and be attractive to the public.

8.3.2 Research Hypotheses Grewal, Gotlieb and Marmorstein (1994) confirmed that when consumers purchased a product or service, the simple and clear description of the product or service, or a simple mastery of the core content, was a decisive factor that influenced the consumers’ intention to purchase. Agarwal and Teas (2001) pointed out that the proposal difficult to understand could reduce public participation. In the mechanism for public participation in the construction of an ecological civilization, the public’s level of participation is determined by their understanding of the mechanism. H1: The ease of knowledge of the mechanism for public participationin the construction of an ecological civilization is positively correlated to the public participation behavior. Sun and Jin (2011) indicated that the reputation and awareness of an enterprise or government could lead to an increase in perceived value. Dawar and Parker (1994) found that the transparency of the public mechanism could help the public to judge the level of the mechanism. Because it took a lot of time and expenses to establish the satisfaction with a public mechanism, consumers believed that the establishment of public policy or public affairs reflected the reputation of the public sector. If the public had a thorough understanding of the public mechanism and considered that it was transparent and easy to understand, then the public’s satisfaction with the mechanism would increase. Therefore, this paper makes the following hypothesis: H2: The ease of knowledge of the mechanism for public participation in the construction of an ecological civilization n is positively correlated to the satisfaction of public participation. According to Davis (1989), the definition of “ease of use” is the ease with which the public uses the target mechanism. In this paper, “ease of use” is defined as “the ease of the public participation in the construction of an ecological civilization”. A complex participation process will reduce the public’s pro-activeness to participate, while an easy-to-use way will be more attractive to the public. Therefore, this paper makes the following hypothesis:

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H3: The ease of use of the mechanism for public participation in the construction of an ecological civilization is positively correlated to the satisfaction of public participation. Crespo et al. (2009) analyzed the influence of user’s interest in the experience process. The results of this research confirmed that: the interesting experiences had a positive influence on the experience of public participation, while the mechanical and tedious mechanism had a negative influence on public experience. In this research, whether the mechanism of public participation in the construction of an ecological civilization can increase the public interest and enjoyment plays an important role in enhancing the degree of satisfaction of public participation. Therefore, this paper makes the following hypothesis: H4: The ease of interest of the mechanism for public participation in the construction of an ecological civilization is positively correlated to the satisfaction of public participation. H5: The ease of interest of the mechanism for public participation in the construction of an ecological civilization is positively correlated to public participation. According to the TPB (Theory of Planned Behavior), the attitude of the public is a determinant of behavior, and the attitude towards the result and evaluation of the expected behavior determines the implementation of behavior. Fishbein and Ajzen (1975) considered public behavior as the result of a carefully ghought-out and repeatedly planned process. Although the degree of satisfaction and public participation behavior of the mechanism for participation in an ecological civilization can be convertible, this conversion has some conditions and limitations. According to the research of Noel (1998) and Skovmand (2007), the satisfaction of the public with public affairs can greatly increase their participation. Therefore, this paper makes the following hypothesis: H6: The degree of satisfaction of the public with the mechanism for participation in the construction of an ecological civilization is positively correlated to their participation behavior.

8.4 Empirical Results 8.4.1 Descriptive Statistics The questionnaire used in this paper was designed by combining relevant literature and reviews from home and abroad, aimed at the mechanisms for the public’s participation in the participation in an ecological civilization and was revised several times in collaboration with experts and scholars in consumer behavior, psychology and mechanisms for public participation. All data in this paper were collected by the research team through the online survey on the website WJX.CN, and the offline

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Table 8.1 Descriptive statistics of the survey on the mechanism for public participation in the construction of an ecological civilization Measure

Item

Frequency

Percentage

Gender

Female

158

56.47%

Male

121

43.53%

Senior high school

36

12.94%

Education

Frequency of participation in public or welfare affairs

Duration of participation in public or welfare affairs

University

168

59.41%

Postgraduate

66

23.53%

Above postgraduate

11

4.12%

Never

0

0.00%

Fewer than 3 times in two years

15

5.29%

Fewer than 3 times in one year

53

18.82%

More than 5 times in one year

135

48.24%

More than 10 times in one year

77

27.65%

Less than 1 year

10

3.53%

1—2 years

46

16.47%

2—3 years

67

24.12%

3—5 years

115

41.18%

More than 5 years

41

14.71%

279

100%

Total

random interviews in Huzhou, Zhejiang Province, and acquired after more than one month’s sorting. This research distributed a total of 310 questionnaires, 307 responded, and 279 valid questionnaires were obtained after excluding 28 invalid ones. The effective response rate was 90%, thus meeting the need of this research and conforming to the relevant statistical requirements. This questionnaire consists of two parts: one part regards the basic characteristics of the respondents’ demographic indicators such as gender, education, age, frequency and duration of participation in public or welfare affairs as shown in Table 8.1; the other part consists of the questions designed for the ease of knowledge, ease of use and ease of interest of the mechanism for public participation in the construction of an ecological civilization, based on the research of other scholars at home and abroad. The questionnaire adopts the 5-point Likert scale and gives the points of 5–1 for the degree of “accept”, “satisfy”, “agree” and “willing”. The respondents were asked to select the answers for questions according to their own situation.

8.4.2 Analysis of Reliability and Validity The questionnaire mainly sets five latent variables: ease of knowledge, ease of use, ease of interest, degree of satisfaction and participation, and also sets four, four, three,

132 Table 8.2 Source of the indicators of latent variables for the questionnaire

S. Zhai Indicator

Source of questions

Ease of knowledge

Grewal, Gotlieb, Marmorstein (1994)

Ease of use

Dawar and Parker (1994)

Ease of interest

Crespo (2009)

Degree of satisfaction

Fishbein and Ajzen (1975)

Participation

Noel (1998), Skovmand (2007)

three and one measured variables, and the details of indicators and questions of each latent variable are given in Table 8.2. According to the Likert scale, this research first uses Cornbach’s α coefficient to test the consistency of the results of the questionnaire. The reliability is the consistency of or stability among the results obtained from multiple tests, and also includes the measuring error estimated by the test, so as to actually reflect the true quantitative degree. Generally, 0.7 given by Peterson (1994) is taken as the criterion for passing the test. SPSS 22.0 is used for the preliminary test of the questionnaire. Cornbach’s α values of all parts are 0.815, 0.782, 0.768, 0.779 and 0.794, respectively, which are all greater than 0.7, indicating that the questionnaire has a good consistency in each part. As shown in Table 8.3, LISERL8.7 is utilized for the analysis of the confirmatory factor of the questionnaire, and the standardized loading coefficients of the latent variables are greater than 0.55. According to Fidell (2006), this indicates that the model can explain at least 30% of the variance well in the latent variables. The average variance of the values extracted (AVE are all greater than 0.6 and the values of the composite reliability (CR) are all greater than 0.8, indicating that this questionnaire has good convergent validity. As analyzed above, the structure of the contents of the questionnaire meets the requirements of this research and the level of reliability allowed by theory. In order to test the theoretical quality of latent variables and the consistency with the expectations, this paper also uses SPSS 22.0 software to analyze the construct validity of the questionnaire. The KMO measure and Bartlett’s test of sphericity are used to determine whether the content of this questionnaire is suitable for the factor analysis. Then, the matrix of factor structure for each item obtained from the factor analysis is compared with the test values. The results are shown in Table 8.4, and we can see that the KMO values for the latent variables are greater than 0.5. Bartlett’s test of sphericity and chi-square value are also significant. As analyzed above, the scale of this research has good validity and reliability and meets the relevant requirements of this research and related theories.

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Table 8.3 Convergence test of the measured variable Variable

Measured variable

Standardized loading coefficient

Ease of knowledge

Ease of knowledge 1

0.9459

6.2701

Ease of knowledge 2

0.9054

4.2594

Ease of knowledge 3

0.9108

3.7468

Ease of knowledge 4

0.9001

5.5920

Ease of use 1

0.8372

7.3516

Ease of use 2

0.9114

9.8514

Ease of use 3

0.8978

7.9844

Ease of use 4

0.9284

9.5104

Ease of interest 1

0.8915

3.8731

Ease of interest 2

0.9314

4.6991

Ease of interest 3

0.9147

2.2689

Degree of satisfaction 1

0.8895

30.2852

Degree of satisfaction 2

0.9137

29.5594

Degree of satisfaction 3

0.9101

30.7765

Participation 1

0.8649

13.7823

Ease of use

Ease of interest

Degree of satisfaction

Participation

t-value

C.R

AVE value

Cornbrash’s α value

0.923

0.857

0.815

0.867

0.766

0.782

0.908

0.831

0.768

0.897

0.813

0.779

0.873

0.875

0.794

Table 8.4 KMO and Bartlett’s test of sphericity of measured variables Independent variable

KMO value

J approximate chi-square value

Bartlett’s Test Df. Sig. (significance) (degree of freedom)

Ease of knowledge

0.762

112.891

3

0

Ease of use

0.771

168.459

1

0

Ease of interest

0.687

129.397

1

0

Degree of satisfaction

0.735

177.356

3

0

Participation

0.804

284.428

1

0

134 Table 8.5 Goodness of fit test of the model for the mechanism for public participation in the construction of an ecological civilization

S. Zhai Indicator

Evaluation criteria

The model

Acceptable

Good

χ2 / df

< 3.0

< 2.0

GFI

0.7—0.9

> 0.9

0.957

AGFI

0.7—0.9

> 0.9

0.741

CFI

0.7—0.9

> 0.9

0.929

RMESA

< 0.1

< 0.08

0.056

NFI

> 0.8

> 0.9

0.975

1.548

8.4.3 Goodness-Of-Fit Test In order to test the consistency of the sample data with the proposed theoretical hypothesis and the creditability of the results, this model is tested for goodness of fit by using the method of the maximum likelihood, with the specific indicators shown in Table 8.5. The absolute goodness of fit indices (χ2/df = 1.548, GFI = 0.957, AGFI = 0.741, RMESA = 0.056) and incremental goodness of fit indices (NFI = 0.975, CFI = 0.929) of the model are basically acceptable relative to the criteria for evaluation, and some of them reach the criteria of good. Overall, the fit indices of this model can basically explain the theoretical hypotheses presented above and be convincing.

8.4.4 Path Test In this paper, AMOS 22.0 is used to test the model of the structural equation of the research. Based on the path relationships between 5 latent variables and 15 measured variables, the factor test parameters and the path coefficients are tested. If the P values are less than 0.05, the C.R. values are greater than 1.96 and the path coefficient sign is consistent with the hypothesis, the original hypothesis is considered as accepted, otherwise the original hypothesis is rejected. Thus, for the SEM test results shown in Table 8.6, the path coefficients of all the hypotheses are positive, the P values are less than 0.05, the C.R. values are greater than 1.96, and the model explanatory power R2 is 0.697, which means very strong, so the six hypotheses of this research can be accepted. To summarize the results of the comprehensive test of the model of the structural equation, the path for the research on the model of the mechanism for the public participation in the construction of an ecological civilization is shown in Fig. 8.3. The ease of knowledge of this mechanism has an explanatory coefficient of 0.602 (p < 0.01) for public participation behavior and 0.587 (p < 0.001) for the degree of satisfaction with public participation, the ease of use has an explanatory coefficient of 0.624 (P < 0.01) for the degree of satisfaction with public participation, the ease

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Table 8.6 Path coefficient and explanatory power of the model of the mechanism for public participation in the construction of an ecological civilization Hypothesis

Relationship

Standardized Estimate

S.E

C.R

P value

Result

H1

Ease of knowledge → participation

0.602

0.209

2.818

0.006

Supported

H2

Ease of knowledge → degree of satisfaction

0.587

0.088

7.009

0.000

Supported

H3

Ease of use → degree of satisfaction

0.624

0.085

3.866

0.007

Supported

H4

Ease of interest → degree of 0.716 satisfaction

0.224

2.604

0.000

Supported

H5

Ease of interest → participation

0.728

0.097

4.207

0.021

Supported

H6

Degree of satisfaction → participation

0.622

0.089

2.874

0.000

Supported

R2

0.697

Ease of knowledge

Ease of use

Degree of satisfaction

Participatory behavior

Ease of interest

Fig. 8.3 Path of the model of research on public participation in the construction of an ecological civilization. Note ∗ , ∗ ∗ and ∗ ∗ ∗ denote p < 0.05, p < 0.01 and p < 0.001, respectively

of interest has an explanatory coefficient of 0.716 (P < 0.001) for the degree of satisfaction with public participation, and 0.728 (P < 0.05) for public participation behavior, and the public satisfaction with the mechanism for participation in an ecological civilization has an explanatory coefficient of 0.622 (P < 0.001) for their participation behavior.

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8.5 Establishment of the Mechanism for Participation Based on the research model of the degree of satisfaction and participation behavior of the public participation in the construction of an ecological civilization, and considering the designs for the mechanism of participation in an ecological civilization by other scholars at home and abroad, this research focuses on the three participating subjects: “government—community—public”, takes account of “ease of knowledge, ease of use and ease of interest” of public participation, and builds the comprehensive mechanism based on the “O2O” online and offline, as shown in Fig. 8.4. First, the operating procedures of the mechanism should be simplified, the Internet, new media, and online methods familiar to the public should be used, such as a dedicated website for the construction of an ecological civilization, a WeChat public account and Weibo, so as to improve the publicity of the ecological civilization. This is also the publicity and guidance role that the government should play. Second, as the grassroots organizations that the public relies on, communities, villages and towns also need to play an important role in the mechanism for public participation. By considering the characteristics of the public’s daily life and work, they should carry out the offline propaganda of the ecological civilization on the district bulletin board or public notice board, and publicize the construction of an ecological civilization on posters, in household leaflets, at weekend family activities and in other offline forms. Third, based on the public’s modern lifestyle, the government should carry out activities such as online article soliciting, inviting Internet VIPs and celebrities to participate in the construction of an ecological civilization, arousing the public’s enthusiasm for participation, especially that of the young students, and using the

Construction of an ecological civilization

Online mechanism

Offline mechanism

Ecological civilization website

Ecological civilization public account

Ecological civilization Weibo

Ecological civilization online article soliciting

Online big VIP star participation

12345 combined

Online public feedback information

Online supervision

Ecological civilization virtual community

Community, village public billboard Ecological communities

Community, village publicity activities

Ecological Ecological villages schools

Garden, mountain, wetland, river

Government guidance

Ecological families

Ecological little stars

Community organizing

Ecological civilization excellent community Ecological civilization excellence activities

Ecological civilization network master Ecological civilization best proposal

Public participation

Fig. 8.4 Mechanism for public participation in the construction of an ecological civilization based on the “O2O” model

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popular SNS model to build an ecological civilization online community. The pictures and texts of the public’s daily participation in the construction of an ecological civilization are posted on the Internet to increase their adhesiveness to participate. Meanwhile, offline activities such as “ecological communities, campuses, villages and families” should be organized by the government and community organizations to facilitate public participation. They can not only nliven up the atmosphere of the construction of an ecological civilization, but they can also arouse the enthusiasm of public participation in the construction of an ecological civilization. Fourth, the government should make active use of the Internet resources to carry out online supervision and feedback activities, not to be afraid of the public opinions from the civilians, and deal with problems in a timely manner to enhance the credibility of the government in the process of the construction of an ecological civilization. At the same time, the achievements of the construction of an ecological civilization by community organizations should be actively displayed, such as visits to the demonstration base of the construction of an ecological civilization. Through the real experience of clean, clear waters and lush mountains, public satisfaction and pride can be enhanced. These measures can play an important role in the public’s active participation in the construction of an ecological civilization. Fifth, for the public to participate in the construction of an ecological civilization, in addition to the construction and improvement of the overall ecological environment and the enhancement of public satisfaction, there should be some incentive feedback. Through the online “ecological civilization masters” and “public proposals for the construction of an ecological civilization”, in combination with the offline activities regarding an ecological civilization, public participation behavior can be enhanced.

8.6 Suggestions and Countermeasures The construction of an ecological civilization is key to the sustainable and healthy development in the new normal of China’s economic development and an effective response to tight resource constraints, environmental pollution treatment and prevention of ecological degradation. According to the four strategic tasks of “optimization, saving, protection and construction” proposed by the 18th CPC National Congress and the practice of the construction of an ecological civilization in Huzhou, in the whole process, it is necessary not only to bring into play the leading role of the government, but also to stimulate the motivation of community organizations at the grassroots level and mobilize widespread public participation. In order to improve the satisfaction of public participation and build a good mechanism for public participation, the following measures should be taken.

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8.6.1 Formulating a Master Plan to Strengthen the Safeguards of the Construction of an Ecological Civilization The first and foremost task in the construction of an ecological civilization is top-level design. From the government level, a master plan should be formulated and a series of safeguards for public participation in the construction of an ecological civilization should be promulgated, so as to guarantee the right of the public to participate in the construction of an ecological civilization, and arouse public enthusiasm for participation through local legislation, the promulgation of local regulations and by other means. Under the planning and guarantee system, the public is encouraged to use the Internet and other resources, submit proposals and activity plans about the construction of an ecological civilization, and monitor the activities regarding the construction of an ecological civilization on the part of the government, enterprises and institutions at all levels.

8.6.2 Using New Media to Strengthen the Publicity of the Construction of an Ecological Civilization We must give full play to the role of various media, especially the Internet new media, which can be used to set up online columns, carry out the publicity and education online of the ecological civilization and environmental culture, advocate the public’s concept of green consumption, publicize the ecological ethics, combine with offline activities, organize the public welfare activities of ecological construction, bring into full play the role of schools, communities and NGOs, and enhance the imitativeness of participation in the construction of an ecological civilization. In addition, it is also necessary to strengthen the publicity of ecological civilization in rural areas and actively promote the coordinated development of urban and rural areas in the construction of an ecological civilization.

8.6.3 Evaluation and Incentive to Enhance the Effect of Participation in the Construction of an Ecological Civilization Based on the overall plan, we should strengthen the evaluation of organizations at all levels, regularly evaluate the construction of an ecological civilization, and give the public the power to monitor the polluting enterprises and environmental regulatory departments. Public participation in the evaluation of the construction of an ecological civilization can not only exert the public’s supervising power, but also

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enhance the public’s sense of accomplishment in participation. The results of the public supervision can also be used as a reference for encouraging the supervised entities and the public to participate in the construction of an ecological civilization, as well as for offline public competitions such as the “masters of the construction of an ecological civilization”.

8.6.4 Diversified Forms to Showcase the Progress of the Construction of an Ecological Civilization We should actively use the ecological green construction activities and innovative methods to form a system integrated with eco-campus, eco-community, eco-family, etc. Especially in the process of urbanization, the construction of urban villages and shantytown renovation, we should adhere to the idea of the construction of a comfortable, clean and livable environment, allow the public to obtain the dividends of the construction of an ecological civilization, and display the new achievements of the construction of an ecological civilization by the visits to clean, clear waters and lush mountains, so that the public can really experience the happiness brought by the construction of an ecological civilization. Acknowledgments This paper gratefully acknowledges the funding from the Start-up Fund for Returned Overseas Students of the Ministry of Education and the General Project of Zhejiang Provincial Education Department (Y201430695).

References Davis FD, Bagozzi RP, Warshaw PR (1989) User acceptance of computer technology: a comparison of two theoretical models. Manage Sci 35(8):982–1103 DeLone WH, McLean ER (2003) The DeLone and McLean model of information systems success: a ten-year update. J Manage Inf Syst Spring 19(4):9–30 Guangxue S (2014) On the four dimensions of the construction of an ecological civilization. Technoeconomics Manage Res 12:129–131 Haofeng N (2013) Exploring community participation in the construction of an ecological civilization. Econ Res Guid 31:111–114 Jiagang Z (2012) Establish and perfect the mechanism of public participation to promote the construction of an ecological civilization. J Green Sci Technol 12:96–99 Li Z (2009) Research on China’s pluralistic participatory mechanism for the construction of an ecological civilization, Master’s Thesis, Chang’an University, p 77 Mingfang M (2009) Efforts to build a long-term mechanism for the construction of an ecological civilization. Ascent 3:76–79 Negash S, Ryan T, Igbaria M (2003) Quality and effectiveness in web-based customer support systems. Inform Manage 40:757–768 Shan L, Guoping M (2013) Building of an effective expression mechanism for public participation in the construction of ecological civilization cities. Green Econ 4:34–47

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Shuming W, Hongxing Y (2011) On public participation in the construction of an ecological civilization—thinking based on Xiamen PX protest. Sci Manage 2:5–9 Shu’e P, Zuo X, Wang D (2010) Research on the current situation and path of citizen participation in the environmental awareness and in the construction of an ecological civilization 17:140–142 Shusheng Q, Hong Z (2014) Exploring public participation in the construction of an ecological civilization. Acad J Zhongzhou 4:86–90 Wang Y, Fei Y (2013) Research on the mechanism for public participation in the construction of an ecological civilization. Soc Sci Xinjiang 5 Weining H (2013) Practice and thinking on engaging the public in the construction of an ecological civilization in Tianjin. Green Leaf 11:107–113 Wenhua T, Yanfeng D (2014) Problems and countermeasures of public participation in ecological construction. Special Zone Econ 7:120–122 Xiaoxiao Z (2013) Summary of the symposium on the construction of an ecological civilization and governmental responsibility in Yangtze river delta cities. Soc Sci Perspect Higher Educ 5:9–12 Yang Q (2014) Research on governmental ecological environmental governance in the construction of an ecological civilization in contemporary China, Doctoral Thesis, East China Normal University, pp.44–50 Ying L, Ben L (2012) Residents’ participation in urban ecological civilization progress: its influencing factors and measures—studying the questionnaire survey of Harbin. Acad Exchange 2:80–82 Yongmin D (2009) The mechanism for participation of urban community residents in ecocivilization. J Guizhou Univ Ethnic Minorities (philos Soc Sci Edition) 3:56–59

Chapter 9

Study on the Ecological Footprint of Tourism in the Beijing Jiufeng National Forest Park Based on the Component Method Ying Zhang, Jing Pan, and Ke Chen Abstract The ecological footprint of tourism in the Beijing Jiufeng National Forest Park is calculated based on the theory and method of the component method for the ecological footprint. This study indicates that in 2013, the total ecological footprint of tourism in Jiufeng National Forest Park was 183.08 ha, the total ecological carrying capacity was 225.16 ha, the total ecological surplus of tourism was 42.07 ha, and the per capita ecological surplus of tourism was 0.0004 ha/person. This means that the tourism in Jiufeng National Forest Park is in a state of ecological surplus and ecological security. However, compared with the overall ecological deficits of forest parks in Beijing, this study suggests that the flow of visitors in forest parks with large ecological deficits should be directed to those with ecological surpluses, and the management of forest park development should be strengthened to improve the efficiency of forest entertainment resources, to enhance the environmental awareness of tourists and promote the sustainable development of forest park tourism. Keywords Forest tourism · Ecological footprint · Ecological carrying capacity · Ecological deficit · National forest park · Beijing

9.1 Introduction In recent years, the analysis of the ecological footprint has been given great importance in the study of the evaluation of sustainable development. Its fields of application are expanding, not only for the general macroscopic evaluation of the status of sustainable development and the utilization of regional resources, but also for the planning and policy evaluation of specific engineering and construction projects. In 2002, the application of the analysis of the ecological footprint in tourism was proposed by Hunter, and after the improvements by many experts, the method of tourism ecological footprints was formed. Foreign scholars began with the analysis of the ecological footprint of tourism elements, mainly studied the impact of tourism Y. Zhang (B) · J. Pan · K. Chen School of Economics and Management, Beijing Forestry University, Beijing 100083, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_9

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activities on the ecological environment, and then calculated the various areas of ecological space for tourism activities on this basis, so as to further compare them with the ecological carrying capacity and judge the state of sustainable development of tourism. Related studies of the ecological footprint of tourism in China started late, mostly focusing on the state of entertainment of a certain park, with few studies regarding the ecological footprint of forest tourism in forest parks. These studies adopted the same methods as overseas studies, mainly calculated the ecological footprint of tourism elements, and then judged the tourism sustainability of a certain park. In this paper, the ecological footprint of tourism is used to study the sustainability of forest tourism in the Beijing Jiufeng National Forest Park, thus further providing a basis for forest park management and decision-making.

9.2 Overview of Jiufeng National Forest Park and Methods of Calculation 9.2.1 Overview of Jiufeng National Forest Park Jiufeng National Forest Park is located at Bei’anhe, Haidian District, Beijing, with a total area of 832.04 ha. The park is situated at 39 54 N 116 28 E, in the northern part of the Taihang Mountains in the northwest suburbs of Beijing and the eastern part of the Yan Mountains, straddling the two districts of Haidian and Mentougou. Within the Taihang Mountains, the lowest elevation of the park is 100 m, and the highest peak is 1153 m. The park has an annual average temperature of 12.2 °C, an annual rainfall of nearly 700 mm, a plant growing period of 220 days, a frost-free period of 180 days, a late frost in early April and an early frost in early September. The special geographical location and climatic conditions provide a suitable environment for the growth of plants and animals in the park. The park is rich in natural resources, with a forest coverage rate of 96.2%. The vegetation in the park belongs to the mountain forest and Pinus tabulaeformis forest in the temperate deciduous forest belt, mainly being natural secondary Populus davidiana forest and mixed forest of Quercus dentata and Populus davidiana. The park has 684 species of open plants in 313 genera of 110 families, including some varieties. The scenic resource of the park has very obvious characteristics of distribution and a certain degree of independence and integrity. At present, the scenic area has about 371 species in 72 families of 12 orders of insect resources, with as many as 800 varieties of insects. In the park, the topography is richly varied, the vegetation conditions are good with little human damage, and there are many species of birds such as pheasants, as well as small animals such as roe deer and hares. Jiufeng National Forest Park has a long and well-preserved cultural history. The historical sites in the park include Xiufeng Temple built in the Ming Dynasty, Jiufeng Mountain Resort and Xiangtang Temple built in the Qing Dynasty, Xiaozhai Temple built during the Republic of China, Jiufeng Seismic Station, the first seismic station in China, as

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well as Chaoyang Guanyin Cave, Xiufeng Temple and Jinxian Temple. The various historical sites in the park provide the abundant natural and cultural resources in Jiufeng National Forest Park. Jiufeng National Forest Park is about 30 km away from the downtown area of Beijing and 18 km away from the northern gate of the Summer Palace. The park has received more than 80,000 visitors annually since it was officially approved as a national forest park in 2004, making it a national forest park in the suburbs, but the closest one to the downtown area of Beijing.

9.2.2 Methods of Calculation The ecological footprint of tourism has two types of methods of calculation: one type is the integrated method, which is a top-down method of calculation. In general, according to the regional or national statistics, it gets the total data of items of tourism consumption, and then calculates the per capita consumption of tourism according to the number of tourists. This method is suitable for large-scale calculations of ecological footprints. Another type is the component method, which is a bottom-up method of calculation. This method divides the consumption in the course of tourism activities into categories such as food, accommodation, transportation, travel, shopping, and entertainment, and then gets the per capita consumption data of tourism through field surveys and other means. This method is suitable for small-scale calculations of ecological footprints. In this paper, the component method is used to study the ecological footprint of tourism in the Beijing Jiufeng National Forest Park.

9.2.2.1

Calculation of the Ecological Footprint of Tourism

The calculation of the ecological footprint of tourism is based on the basic methods of ecological footprints, and converts the various resources occupied and consumed by tourism activities into the biologically productive land area. In the calculation, tourism activities are generally divided into six categories: transportation, accommodation, food, shopping, travel, and entertainment, and the resources needed to support a certain amount of tourism activities and the land area to absorb the waste produced by tourism activities are calculated. The component method for calculating the ecological footprint of tourism usually estimates by items with the specific formulas as follows: 1.

The ecological footprint of transportation

The calculation of the ecological footprint of transportation consists of two parts: first, energy consumption and occupancy of tourist transportation facilities by tourists travelling to and from their usual place of residence to tourist destinations; second, the energy consumption and occupancy of tourist transportation facilities by tourists traveling within the tourist destination. In the calculation, energy consumption mainly

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refers to the energy consumed by tourists traveling by various means of transportation, and tourist transportation facilities also mainly refers to airports, stations, roads, railways, ship wharves, parking lots, etc. The formula for the calculation is: T E Ftranspor t = a1



(Si × Ri ) + a2



qk Nj × Dj × Cj × rk

 (9.1)

In Eq. (9.1): a1 is the equivalence factor of the construction land of transportation facilities; S i is the area of the i-th transportation facility; Ri is the rate of tourist use of the i-th transportation facility; a2 is the equivalence factor of the fossil energy land; Nj is the number of tourists using the j-th transportation facility; Dj is the average distance traveled by tourists using the j-th transportation facility; C j is the per capita energy consumption per unit distance of tourists using the j-th transportation facility; qk is the amount of energy contained per unit of the kth energy; and rk is the world’s average heat output per unit of the kth fossil fuel-producing land area. 2.

The ecological footprint of accommodation

The calculation of the ecological footprint of accommodation also includes two parts: first, the ecologically productive land area occupied for the accommodation provided to tourists, mainly those occupied by different grades of inns, hotels, resorts, guest houses, etc.; second, the energy consumption of various services provided to tourists, such as cooling, heating, cleaning, lighting, Internet access, television, etc. The specific calculation formula is: T E Faccommo = a1



(Ni × Si ) + a2

  Ci 365 × Ni × K i × r

(9.2)

In Eq. (9.2): a1 is the equivalence factor of the construction land of tourist accommodation facilities; N i is the number of beds in the i-th tourist accommodation facility; S i is the area of construction land occupied by each bed in the i-th tourist accommodation facility; a2 is the equivalence factor of the fossil energy land; K i is the average annual rate of room occupancy for the i-th tourist accommodation facility; Ci is the energy consumption by each bed in the i-th tourist accommodation facility; and r is the world’s average heat output per unit of the fossil fuel-producing land area. 3.

The ecological footprint of food

The calculation of the ecological footprint of food mainly includes three parts: first, the construction land occupied by facilities providing food services to tourists; second, the biological resource land occupied by biological resources such as grain, meat, vegetable, fruit and other biological resources consumed by tourists during tourism; third, the fossil energy land area corresponding to the energy consumption of providing food services. The formula for calculating the ecological footprint of food is:

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T E F f ood = a1



S + a2



Nj × Dj ×

Cj Pi

 + a3

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Nj × Dj ×

 Ej rj (9.3)

In Eq. (9.3): a1 is the equivalence factor of the built-up area of food facilities; S is the built-up land area of various food facilities; a2 is the equivalence factor of the biological resource production land; N j is the number of tourist visits; Dj is the average number of travel days; C j is the daily per capita consumption of the j-th food by tourists; Pi is the annual average productivity of biologically productive land corresponding to the i-th food; a3 is the equivalence factor of the fossil energy land; E j is the daily per capita consumption of the jth energy by tourists; and r j is the average heat output per unit of the fossil fuel-producing land area of the jth energy. 4.

The ecological footprint of tourist shopping

The ecological footprint of tourist shopping is an extension of tourism activities. It mainly refers to the activities of tourists buying some souvenirs, special local products and other daily necessities in the tourist places. The calculation of the ecological footprint of tourist shopping also includes two parts: first, the construction land of facilities for the production and sale of tourist goods; second, the biological resources, industrial products and energy consumption of tourist goods purchased by tourists during tourism activities. In the calculation, the ecologically productive land includes farmland, forest land, water and fossil fuel land. In addition, the goods purchased by tourists at tourist destinations are diverse and vary greatly, and different types of tourism goods correspond to different types of ecologically productive land. For general calculations, it is assumed that the goods purchased by tourists are concentrated in a few main sectors. Also, because the production and sale of tourism goods consumes relatively little energy, they are often ignored in the calculation of the ecological footprint. The formula for calculating the ecological footprint of tourist shopping is: T E Fshopping = a1



Si + a2

  R j  Pj

 ÷ gj

(9.4)

In Eq. (9.4): a1 is the equivalence factor of the construction land occupied by production and marketing facilities of tourism goods; S i is the built-up land area of the production and marketing facilities of the i-th tourism goods; a2 is the equivalence factor of the fossil energy land; Rj is the consumption expenditure of tourists purchasing the j-th tourism goods; Pj is the local average selling price of the j-th tourism goods; and gj is annual average productivity of local biologically productive land which the j-th unit tourism goods corresponds to. 5.

The ecological footprint of tourist visits

The calculation of the ecological footprint of tourist visits mainly refers to the total area of construction land and energy consumption of tourist trails, roads and viewing spaces in the various types of scenic areas visited by tourists. It is different from the

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actual land area and total energy consumption of a scenic area. In the calculation, the energy consumption of the activities of visiting is often neglected. The formula for calculating the ecological footprint of tourist visits is: T E Fvisiting =



Pi +



Hi +



Vi

(9.5)

In Eq. (9.5): Pi is the built-up area of the tourist trails in the i-th tourist attraction; H i is the built-up area of roads in the i-th tourist attraction; and V i is the built-up area of the viewing space in the i-th tourist attraction. 6.

The ecological footprint of tourist entertainment

The ecological footprint of tourist entertainment mainly calculates the area of construction land for theme parks, golf courses and other large outdoor entertainment facilities. Indoor entertainment facilities for tourists are often attached within accommodation and dining facilities, so this portion of construction land area is also not calculated. In the calculation, the energy consumption of entertainment activities is relatively small and negligible. The specific formula for calculation is: T E Fenter tainment =



Si

(9.6)

In Eq. (9.6): S i is the area of construction land for the i-th outdoor tourist entertainment facility. 7.

Ecological carrying capacity of tourism

The calculation of ecological carrying capacity of tourism first of all calculates the area of various ecological productive land in the scenic area; second, it standardizes the different types of land area through the equivalence factors and calculates the average ecological carrying capacity of all types of land; finally, it summarizes the ecological carrying capacity of each tourist land area and obtains the total ecological carrying capacity of tourism.

9.2.2.2

Calculation of Environmental Capacity

Environmental capacity is a concept emerging due to the conflict between tourism development and environmental protection. It refers to the maximum amount of tourism activities that a forest park is allowed to accommodate within a certain tourist area without affecting the environmental quality or reducing the effect of tourism. At present, there are two methods to estimate environmental capacity: empirical measurement and the method of theoretical prediction. This paper adopts the more commonly used method of theoretical prediction. The formula is as follows:  Rs = S × f Sk

(9.7)

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In Eq. (9.7): Rs is the environmental capacity; S is the area of forest park; and f is the rate of forest coverage of the forest park.

9.3 Sources of the Data All the data in this paper have as their reference the research conducted by scholars in recent years on Jiufeng National Forest Park. The sources of the data include the relevant literature such as the Study on the Tourist Market and the Characteristics of Tourists’ Behavior in Jiufeng National Forest Park, A Comparison of Entertainment Carrying Capacity between Fragrant Hills Park and Jiufeng Forest Park, the Study on the Evaluation of the Ecological Benefits of Jiufeng National Forest Park, and the Assessment on Forest Park Tourism Resource Factors in the Beijing Xishan Area. For the parameters consistent with the national level, this paper refers to the values of relevant parameters from the studies on the ecological footprint of tourism in relevant forest parks in China, such as energy consumption per capita per unit distance, energy consumption of ordinary beds, energy consumption of star beds, etc., and refers to the parameter values in the The Study of the Ecological Footprint of Traveling in Mt. Erlang National Forest Park in Sichuan. Furthermore, the equivalence factors used in the calculations of this study adopt the values for the six major land types in Beijing. Other data, such as indicators of the rate of usage of the Jiufeng parking lot, the area of restaurants in the scenic area, and the area of tourism shopping facilities, were obtained from the field survey.

9.4 Analysis of the Results 9.4.1 The Ecological Footprint from Tourism 9.4.1.1

The Ecological Footprint from Transportation

The ecological footprint of tourism transportation can be divided into two parts: the ecological footprint from transportation facilities and that from tourists travelling by means of transportation. The main transportation facilities in Jiufeng are the parking lots. According to a survey conducted by Song Yunjuan, three parking lots have been built in Jiufeng National Forest Park, covering a total area of nearly 10,000 m2 , with an occupancy rate of 76.1%. In terms of the means of transportation chosen by tourists, the majority of tourists of Jiufeng travel from Beijing and take vehicles as their main means of transportation. According to Chen Song’s survey on the tourist market of Jiufeng, 99% of the tourists of Jiufeng National Forest Park come from Beijing, with Haidian District accounting for the largest proportion, followed by Mentougou and Xicheng. According to the

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Table 9.1 Global average calorific value and conversion factor for some energy consumption

Type of energy resources

Calorific value (CJ/hm2 )

Conversion factor (CJ/t)

Coal

55

20.934

Crude oil

93

41.868

Gasoline

93

43.124

Diesel oil

93

42.705

Natural gas

93

38.978

Liquefied petroleum gas

71

50.2

Source Xiao et al. (2010)

tourist percentage of that study, this paper selects and weighs the distance from the people’s government of each district to Jiufeng for calculating the average traveling distance of tourists. Moreover, according to a survey made by Xiao Suili et al., all tourists arrive at Jiufeng by vehicles, including 47.4% by bus, 43.2% by private car, 3.2% by cars of their work units and 6.2% by tour buses. The energy consumption of transportation is mainly gasoline, whose calorific value and conversion factor refer to global standards, as shown in Table 9.1. Hence, the ecological footprint of tourism transportation calculated according to the formula of the ecological footprint for tourism is shown in Table 9.2. In the calculation, the type of land for transportation facilities is construction land. The ecological footprint of transportation facilities calculated according to Eq. (9.1) is 1.48 ha; the ecological footprint of tourists taking transportation is 14.61 ha, and the total value of the ecological footprint from transportation is 16.09 ha.

9.4.1.2

The Ecological Footprint from Accommodation

In recent years, the basic tourism service facilities of Jiufeng National Forest Park have been gradually improved, with the construction of a four-star reception center for the ancient temples of the Ming Dynasty and a science popularization activity area for young people, which have a daily reception capacity of 400–500 people. There are also 15 high-grade villas in the Zhai’eryu Guhe Area, with an average room occupancy rate of 42.60% in the whole year. According to the rating standards for tourism facilities and field surveys, the energy consumption standards of various accommodation facilities at all levels and the built-up land area per bed are determined, the calculated ecological footprint of the land occupied by tourism accommodation facilities is shown in Table 9.3 and the ecological footprint of energy consumption of tourism accommodation is shown in Table 9.4. Thus, according to the calculation, the ecological footprint of land occupied by accommodation facilities is 0.19 ha, the ecological footprint for the energy consumption of tourism accommodations is 55.39 ha, and the total ecological footprint of

Equivalence factor

0.32

Item

Vehicles

120,000

By vehicles (persons)

41.02

Average traveling distance of tourists (km)

Table 9.2 Calculation of the ecological footprint from transportation

0.02

Energy consumption per capita per unit distance (kg/km·person) 93

Amount of energy contained per unit of coal (CJ/hm2 )

43.124

Conversion factor (CJ/t)

14.61

The ecological footprint from transportation (ha)

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Table 9.3 Ecological footprint of land for tourism accommodation facilities Item

Equivalence factor

Bed area (m2 )

Number of beds (beds)

Ecological footprint of accommodation facilities (ha)

Ordinary hotels

1.94

2

400

0.16

Star hotels

1.94

4

45

0.03

Total

0.19

Table 9.4 The ecological footprint of energy consumption of tourism accommodations Item

Equivalence Number Number Room Energy factor of days of beds occupancy consumption (days) (beds) rate (%) per bed (MJ/bed/day)

Average heat output (107 J/ha)

Ecological footprint of energy consumption of accommodation (ha)

Ordinary 0.32 hotels

365

400

42.60

30

1280.10

46.64

Star hotels

365

45

42.60

50

1280.10

8.75

0.32

Total

55.39

tourism accommodation is 55.58 ha, including the ecological footprint of ordinary hotels of 46.80 ha, and that of star hotels of 8.78 ha.

9.4.1.3

The Ecological Footprint from Food

The ecological footprint of food for tourism mainly includes land area occupied by food facilities, biologically productive land area of food consumed by tourists, and the area occupied by fossil energy land for the energy consumption of providing food services. According to the market survey of Chen Song et al. on the statistics of tourist sources of Jiufeng National Forest Park, 46.2% of the tourists stay in the scenic area for 1 day, 34.8% stay 1–2 days for picnic and camping, 7.8% are students staying more than 2 days for research and other activities, and 11.2% stay only half a day. Therefore, the average time of stay of tourists in Jiufeng National Forest Park is 1.09 days, and the average daily number of tourists = annual number of tourists (120,000) × average number of days staying in Beijing Jiufeng National Forest Park (1.09)/average annual number of days (365), and the calculation result is 300. In addition, the data on food consumption are obtained from the field survey when calculating the ecological footprint for the food of tourists. In this paper, only several types of food with the largest amount of consumption are calculated, and the average

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production is calculated according to the unit production of biological resources in Beijing (see Table 9.5). The energy resource consumed by food for tourists is mainly coal. In the study, other less consumed energy sources are not counted. The energy resources consumed by food for tourists are converted into the fossil energy land area. In the calculation, the per capita consumption of coal by tourists is taken as 0.78 kg/person with reference to the study of Han Guangwei. The average global heat output per unit of fossil fuel-producing land area refers to the global standard. Therefore, the calculated ecological footprint of energy consumption from food for tourists is shown in Table 9.6. The land type for food facilities is construction land. According to the field survey, the restaurant area in Jiufeng National Forest Park is approximately 0.2 ha. Hence, through calculations, the ecological footprint of the land occupied by food facilities is 0.39 ha; the ecological footprint of food consumption is 50.81 ha; the ecological Table 9.5 Ecological resource consumption of the ecological footprint of food for tourists Food category

Equivalence Number factor of tourist arrivals (persons)

Average Consumption number per capita of days (kg/person/day) of tourists (days)

Average productivity of corresponding land (kg/ha)

Ecological footprint for food (ha)

Grain products

1.94

300

1.09

0.14

27.30

3.34

Vegetables

1.94

300

1.09

0.17

4.99

21.94

Edible oil

1.94

300

1.09

0.02

6.26

2.26

Fruit

0.17

300

1.09

0.08

2.29

1.92

Aquatic products

1.59

300

1.09

0.00

64.57

0.03

Meat products

31.04

300

1.09

0.13

343.12

3.72

Milk products

31.04

300

1.09

0.03

33.57

9.79

Eggs

31.04

300

1.09

0.02

20.60

Total

7.80 50.81

Table 9.6 Ecological footprint of the energy consumption from food for tourists Item

Number of tourist arrivals (persons)

Average number of days (days)

Daily energy consumption per capita (kg/person/day)

Average global energy occupancy (GJ/hm2 )

Conversion factor (GJ/t)

Ecological footprint (ha) from energy consumption

Coal

300

1.09

0.78

55

20.934

0.10

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footprint of energy consumption for providing food is 0.1 ha, and the total ecological footprint of food for tourists is 51.30 ha.

9.4.1.4

Ecological Footprint of Tourist Shopping

Influenced by the service facilities and the grade of the overall tourism resources in the scenic area, the potential spending power of the source market of Beijing Jiufeng National Forest Park is at a medium to low level of consumption. The largest proportion of tourists, 39.6%, spends less than 200 yuan; 27.9% of the tourists spend 200–400 yuan; 16.9% of the tourists spend 400–600 yuan; 6.9% of the tourists spend 600–800 yuan; and 8.7% of tourists spend more than 800 yuan. According to Chen Song’s survey of tourist spending in Jiufeng National Forest Park in 2007, the per capita spending of tourists on shopping was about 44.87 yuan. Jiufeng National Forest Park is rich in products such as matsutake mushrooms, wild jujubes, mulberries, hawthorns, mountain apricots and peaches. According to the field survey and interviews with relevant staff, we obtain the average prices and average production and consumption of these products: the average price of matsutake mushrooms is 50 yuan/kg, with an annual consumption of about 500 kg; the average price of wild jujubes is 30 yuan/kg, with an annual consumption of about 250–500 kg; the average price of mulberries is 40 yuan/kg, with an annual consumption of about 250–500 kg; the average price of hawthorns is 20 yuan/kg, with an annual consumption of about 500 kg; the average price of mountain apricots is 20 yuan/kg, with an annual consumption of about 5000 kg; and the average price of peaches is 9 yuan/kg, with an annual consumption of about 5000–7500 kg. Therefore, the ecological footprint of tourist shopping is calculated as shown in Table 9.7. Table 9.7 The ecological footprint of the purchasing of commodities by tourists Commodity

Equivalence factor

Matsutake mushrooms

0.17

25,000

50

67.47

1.26

Hawthorns

0.17

10,000

20

36,750

0.002

Mulberries

0.17

15,000

40

13,000

0.005

Wild jujubes

0.17

11,250

30

263.23

0.24

Mountain apricots

0.17

100,000

20

89.74

9.47

Peaches

0.17

28,125

9

21,240

0.05

Total

Total consumer Average local Average spending by price (yuan/kg) production tourists on the (kg/ha) product (yuan)

Ecological footprint of the purchasing of commodities by tourists (ha)

1.51

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Furthermore, the built-up area of shopping facilities in the scenic area is about 0.2 ha, and the land type of the shopping built-up area is construction land. Hence, the ecological footprint of construction land occupied by shopping is calculated as 0.39 ha, the ecological footprint of purchasing commodities is 1.51 ha, and the total ecological footprint of tourist shopping is 1.9 ha.

9.4.1.5

The Ecological Footprint of Tourists’ Visits

The ecological footprint of tourists’ visits in Jiufeng National Forest Park consists of trails, roads and sightseeing spots. The visiting paths are few and inadequately hardened. The trails are 19 km long and 1.5 m wide, with a built-up area of 2.85 ha; the total length of the roads is about 8 km, with a width of about 4.5 m, and there are asphalt and fireproof roads, with a built-up area of about 3.6 ha; the area of viewing space is calculated according to the visitable areas in each scenic spot within Jiufeng National Forest Park, with a built-up area of 16.78 ha. Thus, the calculated ecological footprint of tourists’ visits in Jiufeng National Forest Park is 23.23 ha in total.

9.4.1.6

Ecological Footprint of Tourist Entertainment

Entertainment activities in Jiufeng National Forest Park include camping, hunting, horseback riding and participatory agricultural and forest production activities. According to the field survey and interviews with relevant staff, we find that the entertainment facilities in the park cover an area of 30–40 ha, with a median value of 35 ha being taken during the calculation, and the land type is built-up land. Since less energy is consumed in the entertainment process, it is not included in the calculation. The ecological footprint for tourist entertainment of Jiufeng National Forest Park is 35 ha.

9.4.1.7

Total Ecological Footprint of Tourism

According to the definition and methods of calculation of the ecological footprint of tourism based on the component method, the ecological footprint of tourism is the sum of the ecological footprint of transportation, that of food, that of shopping, that of visits and of entertainment. Therefore, the ecological footprint of tourism in Jiufeng National Forest Park is shown in Fig. 9.1. In Fig. 9.1, it can be observed that the proportion of the ecological footprint of accommodation is the largest, accounting for 30.36%, followed by that of food, accounting for 28.01%, and that of shopping is the smallest, with 1.9 ha, accounting for only 1.04% of the total ecological footprint of tourism. Also, according to the average annual number of tourists in Jiufeng National Forest Park, the ecological footprint of tourism per capita is calculated to be 0.0015 ha/person.

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(ha)

Ecological footprint of transportation for tourism

Ecological footprint of accommodation for tourism

Ecological footprint of food for tourism

Ecological footprint of shopping for tourism

Ecological footprint of visits for tourism

Ecological footprint of entertainment for tourism

Fig. 9.1 Composition of the ecological footprint of tourism

9.4.2 Calculation of the Ecological Carrying Capacity of Tourism The ecological carrying capacity of tourism depends mainly on the area and type of ecologically productive land in the study area. Data on the areas of various types of land in Jiufeng National Forest Park are obtained by the field survey. Jiufeng National Forest Park is a typical mountainous forest park with good mountainous terrain and abundant plant resources, but scarce water resources and ordinary animal resources. The ecological carrying capacity of Jiufeng National Forest Park is calculated based on the equivalence factor and yield factor of each type of land in Beijing, as shown in Table 9.8. Thus, the results of the calculation show that the ecological carrying capacity of tourism in Jiufeng National Forest Park is 225.16 ha and the per capita ecological carrying capacity in 2013 was 0.0019 ha/person. Table 9.8 Ecological carrying capacity of tourism in Jiufeng national forest park Land type Farmland Forest land Construction land

Area (ha)

Equivalence factor

Yield factor

Ecological carrying capacity of tourism (ha)

6.7

1.94

1.66

21.58

800.42

0.17

0.91

123.83 79.28

24.62

1.94

1.66

Water

0.3

1.59

1

Total

832.04

0.48 225.16

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9.5 Conclusions and Suggestions 9.5.1 Main Conclusions 1.

2.

The total ecological footprint of tourism in Jiufeng National Forest Park in 2013 was 183.08 ha, with a total ecological carrying capacity of 225.16 ha, in a state of ecological surplus. The total ecological surplus of tourism was 42.08 ha and the per capita ecological surplus of tourism was 0.0004 ha/person. This means that Jiufeng National Forest Park can still carry more tourists and meet the demand of forest tourism, and it is in a state of ecological security. Although the ecological footprint of Jiufeng National Forest Park is in a state of ecological surplus, according to the related survey, the forest parks in Beijing are in state of ecological deficit, and the ecological deficit/surplus of each forest park is not consistent. Therefore, the flow of visitors to forest parks with large ecological deficits should be directed to those with ecological surpluses. This is one of the directions that the forest park management in Beijing should strive for.

9.5.2 Policy Suggestions 1.

Strengthening the management of forest park development

Air, water, solids, noise and other pollutions, which are the major hazards to Beijing’s current forest tourism, are mainly caused by the excessive flow of visitors in some parks in Beijing. Moreover, the excessive flow of visitors in some parks can also cause damage to the biodiversity and biological habitats of the parks, resulting in overloading of the park ecosystem. Therefore, when developing forest parks, consideration should be given to maintaining the completeness of ecological functions and the structure of forests and developing them within the permissible scope of the ecological capacity, while taking into account the economic, ecological and social benefits. Measures should be taken to restrict the flow of visitors in popular scenic areas that are overloaded with tourists, or to take turns at opening the forest entertainment areas, so as to minimize the overloaded operating state of forest parks and reduce the total ecological footprint from the number of tourists. The tourism facilities built in scenic areas, such as entertainment, food, accommodation and other facilities, should not be repeatedly constructed. They should be restricted to minimize possible ecological damage in the construction process, and increase investment in the ecological restoration of forest ecosystems that have been severely damaged, in order to prevent further deterioration of ecological conditions. 2.

Improving the efficiency of the utilization of forest entertainment resources

To alleviate the ecological deficit state of Beijing’s forest entertainment, it is not only necessary to control the number of tourists, but also to reasonably improve

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the utilization efficiency of forest entertainment resources. The promotion of forest parks with rich forest resources but a relatively small tourist carrying capacity should be enhanced, and without causing damage to the environment, the relevant tourist facilities should be improved, and the convenient tourist routes should be reasonably arranged, in order to distribute the tourists in the relevant forest parks and alleviate the pressure of an overloaded operation of forest parks. Also, due to the obvious seasonal features of forest tourism, it is also possible to make use of the rich forest resources for carrying out various themed activities and control the number of tourists in different seasons, so as to achieve the purpose of improving the efficiency of the utilization of forest entertainment resources. 3.

Raising the environmental awareness of tourists

The relevant authorities should advocate green methods of consumption, raise the environmental awareness of tourists, guide tourists to change their traditional manners of tourism consumption, and awaken tourists to the fact that ecological deficits can lead to a state of unsustainable development of the ecosystem, so that they consciously reduce damage to the ecosystem. This is the path to fundamentally reducing the ecological footprint. Acknowledgments Foundation supports: National Social Science Fund of China Key Project “Research on Policy Evaluation and System Improvement of the Ecological Construction of Forestry in Western China” (11&ZD042); Ministry of Environmental Protection “Research on International Experience in Environmental Asset Accounting” (HBXM141116).

References Chengzhong C, Zhenshan L, Dunxin J (2007) Spatiotemporal analysis of sustainable ecosystems in the world based on the ecological footprint index. Geogr Geo-Inf Sci 11:68–72 Xiao S, Jia L, Du J, Tang D, Wang P, Li J (2010) A comparison of recreation carrying capacity between fragrant hills park and Jiufeng forest park. J Beijing For Univ (Soc Sci) 4:38–43

Chapter 10

Study on the EKC Characteristics of Regional Industrial Pollution Emissions in an Open Economic Environment Guimei Zhao, Lizhen Chen, and Huaping Sun Abstract Based on the basic principles of the nonlinear science and research hypothesis, and according to the statistical data of Jiangsu Province from 2002 to 2013, this paper measures the status and extent of industrial pollution emissions, it studies the EKC characteristics of industrial pollution emissions in an open economic environment, and further develops the theory and method of environmental regulation. Keywords Regional economic growth · Export trade · Industrial pollution emissions · EKC curve · Environmental regulation

10.1 Introduction China’s worsening environmental issues during economic growth and opening-up to the outside world have become an undisputed fact. With the increasing emphasis on the importance of the environment in the development process and the widespread recognition of the definition of sustainable development, the Chinese government has clearly put forward a strategic guideline to “strengthen the conservation of energy resources and ecological environmental protection, and enhance the capacity for sustainable development”. In the academic community, the question of how to achieve economic growth under a more open policy without causing serious environmental degradation and losing potential growth capacity in the future has become one of the major issues for the research on China’s economic development. Grossman and Krueger (1995) presented various kinds of quantitative evidence, both favorable and unfavorable, on the relationship between economic growth and environmental pollution. The results of their quantitative research indicated that in the early stages of economic development, without the intervention of any environmental policy, the increase in per capita income would lead to environmental degradation; when the economy grew further and the per capita income reached a certain level (with G. Zhao (B) · L. Chen · H. Sun School of Finance and Economics, Jiangsu University, Zhenjiang 212013, Jiangsu Province, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_10

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an annual national income per capita of over $5000), the income would increase with environmental improvements. This correspondence between environmental pollution and real income levels is called the “Environmental Kuznets Curve” (EKC). After Grossman and Krueger’s study, many scholars consider that there is an inverted Ushaped curve relationship between the degree of environmental pollution and per capita national economic income. Based on previous studies, this paper focuses more on the curve characteristics of the EKC hypothesis in specific regions and the changes in the EKC curve after adding the variable of export trade, thus applying the non-linear scientific theories and methods to study the EKC curve characteristics of industrial pollution emissions in an open economic environment, reveal the complex mechanisms by which the regional economic growth and foreign trade affect the environment, and further explore the theory and method of environmental regulation.

10.2 Research Design 10.2.1 Model Building Since a large number of nonlinear problems cannot be solved by linearization, the researchers must directly study complex things in order to reflect the essence of the problems more accurately and comprehensively, and hence the nonlinear science for studying complex phenomena has emerged. Through a review of relevant literature, the basic functions of the EKC model have emerged to include the quadratic and cubic functions, and the mixture model of quadratic, cubic and logarithmic combinations. The quadratic and cubic function models of industrial pollution emissions Q and per capita income level A are constructed as follows: Q = β0 + β1 A + β2 A2 + ε

(10.1)

Q = β0 + β1 A + β2 A2 + β3 A3 + ε

(10.2)

In Eqs. (10.1) and (10.2), the industrial pollution emissions are described with a capital letter Q, which intrinsically contains sub-indicators for industrial waste gas, wastewater and solid waste. Changes in the economic level are described by the capital letter A, and all control factors that can have an influence on the economic level, other than environmental quality, are described by ε. The following conclusions are drawn from the mathematical analysis: 1.

If β 1 > 0, β 2 = 0 and β 3 = 0, it means that there is a linear relationship and a positive correlation between the environmental quality and the level of economic development and that an increase in the level of economic development brings about environmental degradation;

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2.

3.

4.

5.

6.

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If β 1 < 0, β 2 = 0 and β 3 = 0, it means that there is a linear relationship and a negative correlation between the environmental quality and the level of economic development and that an increase in the level of economic development leads to environmental improvement; If β 1 > 0, β 2 < 0 and β 3 = 0, it means that the environmental quality will first improve and then deteriorate with economic growth, that is, there is a U-shaped non-linear relationship; If β 1 > 0, β 2 < 0 and β 3 > 0, it means that there is a non-linear relationship between the state of environmental pollution and the level of economic development, showing the characteristics of an N-shaped curve; If β 1 < 0, β 2 > 0, β 3 < 0, it means that there is a non-linear relationship between the state of environmental pollution and the level of economic development, showing the characteristics of an inverted N-shaped curve; If β 1 = 0, β 2 = 0 and β 3 = 0, it means that there is no relationship between the level of environmental pollution and the level of economic development, that is, the EKC curve does not exist.

In order to further analyze the relationship between regional economic growth, export trade and industrial pollution emissions, the quadratic and cubic function models of industrial pollution emissions Q, per capita income level A and total export EX are constructed, and the total export EX is added as a variable to the original quadratic and cubic models (1) and (2) to obtain models (3) and (4): Q = β0 + β1 A + β2 A2 + β3 E X + ε

(10.3)

Q = β0 + β1 A + β2 A2 + β3 A3 + β4 E X + ε

(10.4)

10.2.2 Variable Measurement and Data Source The indicator of industrial pollution emissions is further divided into three subindicators: industrial wastewater emissions, industrial waste gas emissions and industrial solid waste generation. The indicator of export trade is based on the total exports, and the indicator of regional economic growth is based on the annual per capita GDP calculated with 1990 as the base year. The source of the data is the calculation and sorting according to the China Statistical Yearbook, the Statistical Yearbook of Jiangsu and the Bulletin of the Environmental Status of Jiangsu (Table 10.1).

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Table 10.1 GDP per capita, total exports and industrial waste statistics for Jiangsu: 2002–2013 Year

Per capita GDP (RMB)

2002

14,369

2003

16,743

2004

Total exports (100 million USD)

Industrial wastewater emissions (100 million tons)

Industrial waste gas emissions (100 million cu m)

Industrial solid waste generation (10 thousand tons)

384.80

26.27

14,287.00

3796.00

591.40

22.35

14,617.93

3596.72

20,031

874.97

25.88

24,286.00

5774.00

2005

24,616

1229.82

26.58

20,196.58

5424.39

2006

28,526

1604.19

25.84

24,880.86

6672.71

2007

33,837

2037.33

23.60

23,547.12

6689.84

2008

40,014

2380.36

25.93

25,244.70

7091.33

2009

44,253

1992.43

23.67

27,431.75

7345.84

2010

52,840

2705.5

26.38

24,435

9062.5

2011

62,290

3126.23

24.96

27,464.03

2012

68,347

3285.4

23.52

23,967

10,189.4

2013

74,607

3288.5

22.06

31,212.9

11,443.77

10,398.9

Source Statistical Yearbook of Jiangsu (2002–2014), official website of Jiangsu Provincial Bureau of Statistics

10.3 Empirical Analysis The models of EKC curves are constructed based on the industrial waste emissions, per capita GDP and total exports of Jiangsu from 2002 to 2013, and Eviews 6.0 software is utilized to make the quadratic and cubic linear regression test and judgment of the relationship among industrial pollution emissions, regional economic growth and export trade: (1) the coefficient of the per capita GDP and its quadratic term is used to judge whether the industrial pollution emissions in Jiangsu are consistent with the EKC curve, and if so, to judge the shape of the EKC curve; (2) after adding the trade variable, the influence of the export trade on the industrial pollution emissions and the shape and characteristics of the EKC curve are judged based on the results of the quadratic and cubic fitting.

10.3.1 Model Regression According to the data in Table 10.2, the relationship and the shape of the curve of the industrial waste emissions and per capita GDP is: Industrial wastewater emissions: Q water = 23.4203 + 0.0001A − 1.72E − 09A2 (nonlinear relationship, U-shape)

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Table 10.2 Quadratic regression of industrial pollution emissions and total economic growth Industrial pollutants

Constant term

A

A2

R2 &A-R2

F value

Industrial wastewater

23.4203 (10.1735)

0.0001 (0.9692)

−1.72E−09 (−1.2449)

0.2802 (0.1202)

1.7514 (0.2278)

Industrial waste gas

9386.495 (1.9727)

0.5744 (2.2684)

−4.48E−06 (−1.5705)

0.6697 (0.5963)

9.1236 (0.0068)

Industrial solid wastes

1913.264 (2.2263)

0.1528 (3.3419)

−3.73E−07 (−0.7240)

0.9587 (0.9495)

104.3260 (0.0000)

Industrial waste gas emissions: Q gas = 9386.495 + 0.5744 A − 4.48E − 06A2 (nonlinear relationship, U-shape) Industrial solid waste emissions: Q solid = 1913.264 + 0.1528A − 3.73E − 07A2 (nonlinear relationship, U-shape) According to the data in Table 10.3, the relationship and the shape of the curve of industrial waste emissions and per capita GDP is: Industrial wastewater emissions: Q water = 27.1331 − 0.0002 A + 7.08E − 09A2 − 6.70E − 14 A3 (nonlinear relationship, inverted N-shape) Industrial waste gas emissions: Q gas = −10.125.81 + 2.3600 A − 5.07E − 05A2 + 3.52E − 10 A3 (nonlinear relationship, N-shape) Industrial solid waste emissions: Q solid = 307.6863 + 0.2998A − 4.18E − 06A2 Table 10.3 Cubic regression of industrial pollution emissions and total economic growth Industrial pollutants

Constant term

A

A2

A3

R2 &A-R2

F value

Industrial wastewater

27.1331 (4.8267)

−0.0002 (−0.4573)

7.08E-09 (0.5819)

−6.70E−14 (−0.7280)

0.3249 (0.0717)

1.2833 (0.3444)

Industrial waste gas

−10,125.81 (−1.0911)

2.3600 (2.9576)

−5.07E−05 (−2.5248)

3.52E−10 (2.3176)

0.8024 (0.7283)

10.8272 (0.0034)

Industrial solid wastes

307.6863 (0.1483)

0.2998 (1.6804)

−4.18E−06 (−0.9303)

2.90E−11 (0.8530)

0.9621 (0.9479)

67.6888 (0.0000)

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Table 10.4 Quadratic regression of industrial pollution emissions, total economic growth and total export trade Industrial pollutants

Constant term

A

A2

EX

R2 &A-R2

F value

Industrial wastewater

24.7857 (6.8020)

−3.56E−05 (−0.1063)

−7.99E−10 (−0.3422)

0.0015 (0.4987)

0.3019 (0.0401)

1.1530 (0.3855)

Industrial waste gas

8303.256 (1.0882)

0.6969 (0.9936)

−5.20E−06 (−1.0637)

−1.2099 (−0.1889)

0.6712 (0.5478)

5.4426 (0.0247)

Industrial solid wastes

2790.195 (2.1167)

0.0537 (0.4433)

2.16E−07 (0.8854)

0.9795 (0.8854)

0.9623 (0.9482)

68.1423 (0.0000)

Table 10.5 Cubic regression of industrial pollution emissions, total economic growth and total export trade Industrial pollutants

Constant term

Industrial 30.2768 wastewater (4.1567)

A

A2

−0.00056 1.10E−08 (−0.8109) (0.8036)

A3

EX

−8.65E−14 0.0023 (−0.8751) (0.7139)

R2 &A-R2 F value 0.3707 (0.0111)

1.0309 (0.4542)

Industrial waste gas

−16,601.81 3.0442 (−1.4096) (2.7598)

−5.88E−05 3.93E−10 (−2.6522) (2.4545)

−4.7492 0.8233 (−0.9095) (0.7223)

8.1518 (0.0090)

Industrial solid wastes

1367.666 (0.5057)

−2.85E−06 2.24E−11 (−0.5589) (0.6106)

0.7773 (0.6483)

47.1933 (0.0000)

0.1878 (0.7415)

0.9642 (0.9438)

+ 2.90E − 11A3 (nonlinear relationship, N-shape) According to the data in Table 10.4, the relationship and the shape of the curve of the industrial waste emissions, per capita GDP and total exports is: Industrial wastewater emissions: Q water = 24.7857 − 3.56E − 05A − 7.99E − 10 A2 + 0.0015E X (nonlinear relationship, inverted U-shape) Industrial waste gas emissions: Q gas = 8303.256 + 0.6969A − 5.20E − 06A2 − 1.2099E X (nonlinear relationship, inverted U-shape) Industrial solid waste emissions: Q solid = 2790.195 + 0.0537A + 2.016E − 07A2 + 0.9795E X (nonlinear relationship, U-shape)

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According to the data in Table 10.5, the relationship and the shape of the curve of the industrial waste emissions, per capita GDP and total exports is: Industrial wastewater emissions: Q water = 30.2768 − 0.00056A + 1.10E − 08A2 − 8.65E − 14 A3 + 0.0023E X − 10 A3 − 4.7492E X (nonlinear relationship, inverted N-shape) Industrial waste gas emissions: Q gas = 166601.81 + 3.0442 A − 5.880E − 05A2 + 3.93E E − 10 A3 − 4.7492E X (nonlinear relationship, N-shape) Industrial solid waste emissions: Q solid = 1367.666 + 0.1878A − 2.85E − 06A2 + 2.24E − 11A3 + 0.7773E X (nonlinear relationship, N-shape)

10.3.2 Regression Results 1.

Relationship between industrial wastewater emissions and per capita GDP as well as total exports

According to Figs. 10.1 and 10.2, after regressions of industrial wastewater, per capita GDP and total exports respectively, it can be found that the correlation between

Fig. 10.1 Scatter plot of the relationship between industrial wastewater emissions and per capita GDP

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Fig. 10.2 Scatter plot of the relationship between industrial wastewater emissions and total exports

industrial wastewater and the total exports is higher than its correlation with per capita GDP. The quadratic and cubic regressions of industrial wastewater emissions and per capita GDP, industrial wastewater emissions and total exports are performed, and it can be judged that the correlation between industrial wastewater emissions and the total number of exports is higher than the correlation between industrial wastewater emissions and per capita GDP. As shown in Table 10.2, R2 = 0.2802, F = 1.7514, which does not meet the requirements of the confidence interval of more than 95%, it is judged that the results of the quadratic regression fit of industrial wastewater emissions and per capita GDP is poor; as shown in Table 10.3, R2 = 0.3249, F = 1.2833, the cubic fit effect of industrial wastewater emissions and per capita GDP is still poor, but the cubic fit effect is better than the results of the quadratic regression. The quadratic curve of industrial wastewater emissions and per capita GDP shows a nonlinear relationship, U-shaped, which conforms to the basic shape of the EKC curve; according to the data of industrial wastewater emissions in the past ten years, it can be found that the industrial wastewater emissions show a fluctuating trend with the increase in per capita GDP, and the cubic curve of industrial wastewater emissions and per capita GDP is in an inverted N shape, indicating a relatively complex nonlinear relationship between industrial wastewater emissions and per capita GDP. As shown in Tables 10.4 and 10.5, after adding the trade variable, the result of the quadratic fit of industrial wastewater emissions and total exports is R2 = 0.3019, F = 1.1530, and the result of the cubic fit is R2 = 0.3707, F = 1.0309, indicating that the result of the cubic fit of industrial wastewater emissions and total exports is better than the effect of the quadratic curve. 2.

Relationship between industrial waste gas emissions and per capita GDP as well as total exports

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According to Figs. 10.3 and 10.4, after regressions of industrial waste gas, per capita GDP and total exports respectively, it can be found that the correlation between industrial waste gas and total exports is less than its correlation with per capita GDP. After regressions of industrial waste gas emissions, per capita GDP and total exports, it can be found that the correlation between industrial waste gas emissions and total exports is lower than the correlation between industrial waste gas emissions and per capita GDP. As shown in Table 10.2, R2 = 0.6697, F = 9.1236, which do not meet the requirements of the confidence interval of more than 95%, but the effect of the quadratic fit of industrial waste gas emissions and per capita GDP is good; as shown in Table 10.3, R2 = 0.8024, F = 10.8272, the effect of the cubic fit still fails to reach above 95%, but it indicates that the effect of the cubic fit of industrial waste gas emissions and per capita GDP is better than the results of the quadratic regression fit. After regressions, the quadratic curve of industrial waste gas emissions

Fig. 10.3 Scatter plot of the relationship between industrial waste gas emissions and per capita GDP

Fig. 10.4 Scatter plot of the relationship between industrial waste gas emissions and total exports

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and per capita GDP shows a nonlinear relationship, a U shape, which conforms to the basic shape of the EKC curve, and the cubic curve shows an N shape, indicating a relatively complex non-linear relationship between industrial waste gas emissions and per capita GDP. As shown in Tables 10.4 and 10.5, after adding the trade variable in the model, the result of the quadratic curve fit of industrial waste gas emissions and total export is R2 = 0.6712, F = 5.4426, and the result of the cubic curve fit is R2 = 0.8233, F = 8.1518, indicating that the result of the cubic curve fit of industrial waste gas emissions and total exports is better than the effect of the quadratic curve. 3.

Relationship between industrial solid waste emissions and per capita GDP as well as total exports

According to Figs. 10.5 and 10.6, after regressions of industrial solid waste, per capita GDP and total exports respectively, it can be found that the correlation between industrial solid waste and total exports is less than its correlation with per capita GDP. After

Fig. 10.5 Scatter plot of the relationship between industrial solid waste emissions and per capita GDP

Fig. 10.6 Scatter plot of the relationship between industrial solid waste emissions and total exports

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regressions of industrial solid waste emissions and per capita GDP, industrial solid waste emissions and total exports, it can be judged that the correlation between industrial solid waste emissions and total exports is lower than the correlation between industrial solid waste emissions and per capita GDP. As shown in Table 10.2, R2 = 0.9587, F = 104.3260, which do not meet the requirements of the confidence interval of more than 95%, but the effect of the quadratic fit of industrial solid waste emissions and per capita GDP is the best; as shown in Table 10.3, R2 = 0.9621, F = 67.6888, the effect of the cubic fit of industrial solid waste emissions and per capita GDP is better than the effect of the quadratic curve, and the fit effect reaches above 95%. After regressions, the quadratic curve of industrial solid waste emissions and per capita GDP shows a nonlinear relationship, of a U shape, which conforms to the basic shape of the EKC curve, and the cubic curve shows an N shape, indicating a relatively complex non-linear relationship between industrial solid waste emissions and per capita GDP. As shown in Tables 10.4 and 10.5, after adding the trade variable, the result of the quadratic curve fit is R2 = 0.9623, F = 68.1423, and the result of the cubic curve fit is R2 = 0.9642, F = 47.1933, indicating that the result of the cubic curve fit is better than the quadratic curve. Meanwhile, the fit effect of industrial solid waste emissions to per capita GDP and export trade is the best among the three industrial wastes, both reaching more than 95% and passing the quadratic and cubic model F-tests.

10.4 Conclusions and Implications Based on the nonlinear perspective and research hypothesis, we build a theoretical model of the relationship among regional economic growth, export trade and industrial pollution emissions, and conduct an empirical test of the theoretical model and hypothesis with statistical data from Jiangsu Province, and the specific research conclusions are presented as follows: First of all, the relationship among regional economic growth, export trade and industrial pollution emissions has non-linear characteristics. After adding the trade variable, the regression fit of industrial wastewater, industrial waste gas and industrial solid waste emissions and export trade are all better than the fit of per capita GDP and the three industrial wastes. This indicates that the influence of export trade on industrial pollution emissions is more significant than that of regional economic growth on industrial pollution emissions, and the influence on industrial pollution emissions also shows non-linear characteristics. On the one hand, it is because of the scale effect, structural effect and technology effect; on the other hand, it is because the export trade not only influences the environment directly by increasing the GDP, but also through the paths of environmental regulation, trade barriers and transfer of polluting industries. Second, the relationship among regional economic growth, export trade and industrial pollution emissions has dynamic characteristics. After conducting the quadratic and cubic curve regression simulations of industrial waste emissions, per capita GDP and export trade, it can be found that the shape of the EKC curve shows dynamic

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changes from linear to nonlinear and from simple nonlinear to complex nonlinear. The study indicates that in the short term, the positive effect of ecological environmental protection has a significant impact, but in the long term, with an increase in per capita GDP and in exports, the industrial waste emissions continue to increase, the environment may further deteriorate, and the externalities of regional economic growth and export trade on industrial pollution emissions will be more significant. Third, the relationship between regional economic growth, export trade and industrial pollution emissions has complex characteristics. The inverted U shape is the basic shape of the EKC curve, indicating that the environmental condition will improve with the GDP growth after the GDP reaches a critical value. However, after the cubic curve regressions of industrial waste pollution, per capita GDP and export trade, it indicates that the EKC curve does not just have a simple inverted U shape, but also the complex situations of an N shape and an inverted N shape. Therefore, the improvement of environmental pollution depends on technological progress, production optimization and economic development, and it cannot be simply assumed that the environment can improve itself when the per capita GDP or export trade reaches a certain level. Acknowledgements Foundation projects: National Statistical Science Research Project: Research on the Effect of Spatial Transfer of Carbon Emissions on Regional Coordinated Development (2014LY036); Jiangsu Postgraduate Research Innovation Program: Research on Key Factors and Guiding Strategies of Regional Industrial Structure Adjustment Based on the Complex Adaptation System (KYZZ_0293); Jiangsu University Natural Science Research Project: Research on the Effects of the Economic Structure of Spatial Transfer of Carbon Emissions Based on Computational Experiments (14KJB170002).

Reference Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353– 377

Chapter 11

Study on the Ecological Capital Investment Against the Background of Ecological Governance Xun Yang, Congrui Qu, and Yuanjian Deng

Abstract Ecological capital is a very important form of capital, and the basic capital for sustainable economic and social development in the future. Carrying out the positive operation of ecological capital and maintaining the non-diminishing nature of ecological capital stock are the preconditions and important foundation for constructing a resource-conserving, environment-friendly, population-balanced society. In this paper, with a full awareness of the background of ecological governance, we explore the mechanism of ecological capital investment: ecological capital is formed by defining property rights and capitalization of ecological resources, and further, the ecological capital is invested by the investment subjects so that it becomes the ecological product, the ecological product forms the ecological benefit by a certain model of ecological investment, and finally the ecological benefit guarantees the non-diminishing of ecological resources through ecological compensation. Then, the specific paths of ecological capital investment are proposed, including ecological path and economic path. Keywords Ecological governance · Ecological capital investment · Path selection

11.1 Introduction With the growth of the population, the demand of human beings for resources is increasing and putting tremendous pressure on the Earth’s biodiversity. At the same time, the environmental damage is also very serious, mainly reflected in heavy surface water pollution, aggravating water and soil loss, frequent hazy weather, heavy air pollution in some cities, a significant increase in the number of patients suffering heart and lung diseases, and an obviously declining biodiversity. China has worked miracles of economic growth in the past 30 years. However, China cannot avoid the industrial development path of “pollute first, clean up later”. The traditional extensive X. Yang (B) · C. Qu · Y. Deng School of Business Administration, Zhongnan University of Economics and Law, Wuhan 430073, Hubei Province, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_11

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growth at the expense of sacrificing the environment and destroying resources has added tremendous ecological pressure to the economy and to society. Fortunately, the country woke up in reflection, quickly took redemptive action, and launched the ecological governance movement. In 2012, the 18th National Congress of the Communist Party of China (CPC) proposed that “we must give high priority to making ecological progress and incorporate it into all aspects and the whole process of advancing economic, political, cultural, and social progress, work hard to build a beautiful country, and achieve lasting and sustainable development of the Chinese nation.” On March 24, 2015, the Political Bureau of the CPC Central Committee held a meeting to consider and adopt the Opinions on Accelerating the Construction of an Ecological Civilization, which paid special attention to the needs of strengthening the natural ecological system and environmental protection, promoting fundamental changes in the mode of utilization, continuously advancing ecological governance, and putting forward new requirements for ecological capital investment. In the process of the continuous advancement of ecological governance, a series of problems such as how to achieve orderly utilization of ecological resources, how to achieve sustainable economic development, and how to maintain the nondiminishing nature of ecological resources within the environment of the socialist market economy are all urgent issues to be solved by means of ecological governance. From the perspective of ecological economics, the ecological capital is a very important form of capital, and any sustainable model of economic and social development must give the highest priority to the costs and benefits of ecological aspects. It is of great significance to explore the issue of ecological capital investment in order to establish the concept of ecological civilization and alleviate the resource and environmental constraints facing China’s sustainable economic and social development.

11.2 Principle Analysis of Ecological Capital Investment Ecological capital investment is a virtuous cycle of the construction of an ecological environment within the framework of sustainable development. In Fig. 11.1, it can be seen that ecological capital investment is based on ecological resources, which form ecological capital by defining property rights (asset). The ecological capital turns into the ecological product by means of the ecological investment of the subjects, the ecological product yields the ecological benefit by means of a certain model of ecological investment, and the ecological benefit can ultimately guarantee the non-diminishing of ecological resources by means of the ecological compensation system, etc.

11 Study on the Ecological Capital Investment … Definition of property rights

Ecological resources

Asset

171 Investment model

Investment subjects

Ecological capital

Product

Ecological product

Market

Ecological benefit

Ecological compensation

Fig. 11.1 Ecological capital cycle

11.2.1 Basic Elements of Agricultural Ecological Capital Investment 11.2.1.1

Investment Subjects

The pattern of investment subjects reflects the nature of ecological capital investment. According to the investment theory, the subjects of ecological capital investment must have the following three characteristics: (1) they must have investment rights and must be capable of making investment decisions relatively independently; (2) as the subjects of ecological capital investment, they must bear the corresponding investment risks and responsibilities; (3) investment subjects must enjoy certain investment returns. In terms of the hierarchy of public and private investment, the ecological capital investment subjects mainly include two types: First, the subjects of public investment in ecological capital. The government is the macro subject of ecological capital investment, which is determined by the attributes of ecological capital and the responsibilities of the government. From the perspective of the attributes of ecological capital, the ecological capital is public and fundamental, the ecological capital investment is charged with the task of providing society with public ecological products, and the government is the party responsible for providing public ecological products; from the perspective of the property rights of ecological capital, most of the ecological environmental resources belong to the State or to the collective, and the government is the legal entity that exercises the rights and interests of ecological capital on behalf of the State or the collective; from the perspective of the construction of an ecological environment, due to the long cycle of ecological capital investment, wide range of involvement and many interested parties, it is difficult for any enterprise or individual to carry it out in a sustainable and effective manner, and the government’s capacity for macroscopic regulation and coordination is the key to ensuring comprehensive and orderly ecological capital

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investment. During ecological capital investment, the government’s macroscopic role is particularly important. Second, the subjects of private investment in ecological capital. Enterprises are the meso-subjects of ecological capital investment. The process of capital investment is the process in which enterprises plan and optimize the allocation of resources and factors of production at their disposal in order to achieve maximum capital appreciation. In the process of ecological capital investment, enterprises, such as market subjects and legal entities, are not only the places where ecological capital lies and creates value, but also the carriers of ecological capital accumulation. Families (including individuals) are the micro subjects of ecological capital investment. Most families are relatively independent economic units. Families play an important role in protecting the ecological environment and conserving ecological resources, and the participation of families is the mass base and important force for ecological capital investment. In addition, the active participation of nongovernmental organizations (NGOs) is also a strong driving force for ecological capital investment. Promoting the preservation and appreciation of ecological capital is a rational collective choice and the result of collective decision-making; fundamentally, the social public is the direct beneficiaries of a good ecological environment and has a fundamental supervisory role over the government and enterprises.

11.2.1.2

Objects of Ecological Capital Investment

The objects of ecological capital investment include three types: first, ecological resource capital. Here, the term “ecological resource capital” is an intuitive generalization that refers to a type of ecological capital existing in the state of production resources. It is different from “resource capital” in resource economics. The latter generally refers to specific tangible resources such as mineral resources, but the former includes tangible resources and a large quantity of intangible resources. Its function is primarily “productive”, that is, supporting the system of production. Second, ecological environmental capital. “Ecological environmental capital” is a descriptive term that refers to a type of ecological capital with environmental characteristics and existing in a state of objective environment. It is clearly different from “environmental capital” in environmental economics. In comparison, the former has the more specific connotation and smaller denotation. The quality, flow, and speed of transformation within each quality element of the ecological environment, together with the structure and combination of various elements, constitute the system of elements of the quality of the ecological environment. Its function is mainly “life”, that is, satisfying the needs of people at the spiritual and cultural level. Finally, ecological service capital. “Ecological service capital” is a vivid functional summarization that refers to a type of ecological capital existing in the state of ecological service flow, such as fresh air, clean water and pleasant climate. Its main function is “survival”, that is, supporting the life system. It is different from “service capital” in the tertiary sector. The former is limited to the ecological system, but the

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latter involves the economic and social systems, including financial capital, physical capital, human capital and social capital.

11.2.2 Main Models of Ecological Capital Investment 11.2.2.1

The BOT Model

BOT model, i.e. “Build-Operate-Transfer”, is the most typical financing model between government capital and private capital, and also the most representative, especially for ecological capital projects with natural monopoly property rights and a regional nature because it can fit the government’s preference. Under the BOT model, the government selects the reputable private operators through bidding and grants the right to operate a specific ecological capital project to these operators, who will finance the construction of the ecological capital project and have the franchise rights within a specified period. Upon expiration of the period, after the investment in the ecological capital project is recovered and the corresponding investment return is acquired, its ownership will be transferred to the government or its designated operating agency. This model of cooperation on an ecological capital project can not only save the government’s financial expenditure on ecological capital project investment, but it can also make up for the shortage of investment and improve the operational efficiency of ecological capital projects; it can also prevent the natural monopoly ownership of ecological capital projects from being permanently monopolized by private capital, causing certain losses to social welfare. Therefore, this model of cooperation for ecological capital projects is very popular with the government.

11.2.2.2

The TOT Model

In order to revitalize ecological capital projects, there are two basic prerequisites for the government to make an appropriate exit and recover the historical precipitated capital: first, the government’s operational mechanism should be changed, that is, the government should gradually withdraw from specific business activities; second, benefits of the precipitated ecological assets should be realized, that is, we should not only pay attention to fee-based ecological assets, but also develop ecological asset projects. Only when these two basic conditions are met, are the private capital and social forces pursuing maximization of personal interests willing to participate in ecological capital projects, and only then can the possibility and legalization of private capital investment returns be guaranteed. On this basis, a win-win TOT (TransferOperate-Transfer) model for cooperation on ecological capital projects between the government and private capital has been formed. In this model, the government sells the cash flow of the ecological capital projects formed within a certain period to obtain funds for new and expanded ecological capital projects, thus achieving rolling development. Specifically, the government grants the franchise of operating

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an invested and completed ecological capital project for a certain period to a private operator by signing a contract, and uses the cash flow of the project within the agreed period as the target to obtain the corresponding funds from the private operator in a lump sum, so as to recoup the government’s financial precipitated capital or invest in new (expanded) ecological capital projects. Upon expiration, the project will be handed back to the government.

11.2.2.3

Other Models

In addition to the above-mentioned typical models of market-based ecological capital project financing and operations, other models of cooperation between the government and private capital for ecological capital projects, especially for investment in regional ecological capital projects, include the Management Contract (MC) model, the Lease-Develop-Operate (LDO) model, the Temporary Privatization (TP) model, Divestiture, and the Perpetual Franchise Model (PFM), and so on. Therefore, it is necessary to adopt an operational model for ecological capital projects in accordance with the regional characteristics and requirements for coordinated ecological and economic development.

11.2.3 Value Composition of Ecological Capital Investment 11.2.3.1

Ecological Values of Ecological Capital Investment

The ecological system is an artificial ecological economic system based on the practices that exist within a natural system, and the establishment of ecological values must first of all follow the general principle of the ecological service value, second, they must conform to the provisions of the overall service function of the natural ecological system, and finally they must reflect the special type and way of realization of ecological service functions. To this end, according to the general path by which the ecological service function reflects the ecological value, and taking into account the form of manifestation and way of realization of the ecological service value, the ecological values of the ecological capital investment can be divided into biological production value, climatic regulation value, soil conservation value and environmental purification value.

11.2.3.2

Economic Values of Ecological Capital Investment

The ecological capital investment realizes the economic values of ecological resources through ecological products and services, and this value conversion is ultimately completed by ecological trade on the ecological market. The values are intuitively expressed as exchange values, which are the direct economic values to

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producers. The economic values of the ecological capital investment, in addition to the general economic value of the traditional capital investment and ecological capital investment, should also follow the special provisions of the economic value itself. The economic values of ecological capital investment are a collective term for the various values that are generated in the process of production, exchange, and distribution. According to various stages of production and reproduction of ecological products, the economic values of ecological capital investment can be divided into product development value, marketing value and ecological product consumption value.

11.2.3.3

Social Values of Ecological Capital Investment

Ecological capital investment also has the above-mentioned social values. However, the ecological capital investment is, after all, a brand-new mode of production and capital investment, with special social values that traditional production and enterprise capital investment do not have, which are prominently embodied as the multidimensional contribution of ecological capital investment to social development. These contributions can be abstracted as three aspects, namely, value of promoting a “two-type society”, value of increasing employment opportunities and value of fostering ecological culture.

11.2.4 Conversion Processes of Ecological Capital Investment Value 11.2.4.1

Value Creation Process: Assetization of Ecological Resources

The ecological resources are relative to the productive economic process of human beings, and all of the materials and services that can be used for ecological production to meet people’s ecological needs are ecological resources. In a broad sense, ecological resources include natural ecological resources, economic ecological resources, social ecological resources, etc.; in a narrow sense, ecological resources usually refer to natural resources. From an economic point of view, ecological resources can be divided into economic ecological resources and freely accessible resources according to the degree of scarcity. Compared to human needs, economic ecological resources are scarce but freely accessible resources are abundant, and the scarcity of ecological resources is also dynamic. The ecological asset is an entity that has a market or an exchange value and is a component of the wealth or property of the owner of the ecological asset. Therefore, the definition of an ecological asset contains two core elements: having market value and having a clear owner (or property right). The ecological asset defined in this study is primarily an ecological resource-based asset. Ecological resource-based assets are

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tangible and intangible assets in the form of ecological resources that are owned by the state, enterprises and individuals and have a market value or a potential exchange value.

11.2.4.2

Value Appreciation Process: Capitalization of Ecological Assets

The productivity of wealth is many times more important than wealth itself. It not only secures existing and increased wealth, but it also compensates for the wealth that has disappeared. The basic meaning of ecological asset is that it can deliver more value than it is worth. Transferability is a fundamental means of increasing the value of ecological assets. If it is not freely transferable, no ecological asset or wealth can generate income or surplus value for its owner, and thus cannot become ecological capital. Once the self-use right of an ecological asset can be relinquished and transferred for a compensation, the owner of the ecological asset will have a future source of income, and the ecological asset will then be transformed into ecological capital. It can be found from the definitions of ecological asset and ecological capital that they have different economic meanings. The transformation from ecological asset into ecological capital requires it to meet the corresponding conditions, namely the ecological asset must be put into the production process in the form of factors of production; if it is idle or used only for consumption, it cannot become the factor of production and bring income and surplus value to the asset owner, and it certainly cannot become ecological capital. An ecological asset can only be transformed into ecological capital when it enters the production process in the form of a specific factor of production and is combined with the other factors of production to produce ecological products.

11.2.4.3

Value Conversion Process: Productization of Ecological Capital

The practice of an ecological economy indicates that: ecological products are more popular than ordinary products because they are of high quality, safe, nutritious and non-polluting and contain high ecological added value, which is converted from ecological capital. This conversion contains two aspects: first, the conversion of the form of ecological capital, such as transfer of abundant sunlight, clean water and nutrients into green food, and concentration of tangible or intangible ecological environmental resources existing in a natural state into specific ecological products; second, the conversion of ecological capital values, which are converted into ecological products through human labor or natural biological production processes, thus evolving into the ecological added value of the products. From the point of view of ecological capital investment, the process of output of ecological products is the process of converting the value of ecological capital investment.

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In the process of ecological capital investment, the key to the productization of ecological capital is the continuous adoption of new ecological technologies. On the one hand, through the invention of new ecological technologies, new ecological resource-based factors of production are continuously discovered and combined with other factors of production to produce new green ecological products that meet people’s “ecological needs” and provide high-quality, safe and diversified ecological service functions. On the other hand, through the ecological innovation of technology, the rate and output of the utilization of ecological resources are increased, resource consumption is reduced, pollution emissions are reduced, and the purposes of reducing production costs, increasing the ecological added value of products and maintaining a high rate of return on investment can be achieved.

11.2.4.4

The Process of Value Realization: Marketization of Ecological Products

Capital, as a factor of production, is necessarily invested in certain activities of social production under the domination of its profitability, and in the production process it is combined with other factors of production to produce specific products, which are then sold on the market and realize the monetary value in the form of exchange value, namely price. Thus, ecological markets are the carriers for the ultimate realization of the value of ecological capital. Ecological markets are the inevitable product of an ecological commodity economy, including the ecological investment market, the ecological technology market and the ecological capital market, which correspond respectively to ecological capital accumulation, ecological capital investment and ecological capital expansion. Like the general commodity market, ecological markets also operate according to the law of competition and are governed by the law of value. The provision and consumption of ecological products is the basis for the formation of ecological markets, and ecological management is the guarantee for the healthy operation of the ecological markets. Unlike the general commodity market, since ecological capital is a “natural” capital, the operation of the ecological markets is not only governed by the law of economy, but also by the law of ecology. This inevitably requires the players on the ecological market to play an active role under the synergistic effect of the two laws.

11.3 Options of Paths to Follow to Reach Agricultural Ecological Capital Investment 11.3.1 The Ecological Path Ecological capital investment is premised on the positive development of the ecological system. The ecological system lays the foundation for the economic system,

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and natural reproduction is a prerequisite for economic reproduction. Sustainable development points directly to the sustainability of economic reproduction and the economic system, but deeply reflects the sustainability of natural reproduction and the positive development of the ecological system. In terms of the subjects of ecological capital investment, the positive development of the ecological system depends on the recognition of the investment subject for the ecological capital. Therefore, whether sustainable economic and social development can be realized relies on whether the people’s business activities conform to the law of ecology, and maintain the stable performance of the ecological system functions, that is to say, whether the economic model is ecologically friendly. This requires people to integrate environmental goals and the law of ecology in their social and economic activities, conduct an ecological transformation of the traditional economic model, adopt the ecologically oriented modern development path, combine industrial civilization and ecological civilization in the construction, “de-link” economic development from environmental degradation, and strive to complete ecological transformation towards the modern model. The management of the ecological environment must be changed from “emergency response” to “preventive innovation”, and the strategies of “green industrialization” and “green urbanization” should be implemented. The ecology of economy means incorporating the basic principles of ecology into the full range of people’s activities, and planning economic and social development from the point of view of a coordinated development of man and nature. Economic and social development must follow the law of ecology, optimize the relationship between man and nature according to the specific possibilities of ecology, economy and society, increase the ecological component of the social economy, and accumulate natural values and natural wealth. To be specific, for the mechanism of ecological capital investment, effective measures should be taken to protect all aspects of the ecological capital investment: first, to clarify the property rights of ecological resources; second, to protect the interests of investment subjects; and third, to broaden the investment mode. Through the above-mentioned strategies, a threefold transformation of ecological resources can be promoted, specifically including: the goals of economic growth change from the pursuit of maximizing GDP to sustainable development; from the pursuit of material quality to simultaneous material production and ecological environmental construction; and from the provision of tangible products to the provision of both products and ecological services.

11.3.2 The Economic Path In areas with abundant ecological resources but low levels of economic development, the ecological resources should be continuously capitalized through e ecological capital investment, ecological advantages should be converted to economic advantages, and the proceeds from economic activities should be used for the protection, restoration and compensation of the ecological system, so as to realize positive interaction between ecological capitalization and ecology of capital, promote the unity

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of ecological and economic benefits and increase the stock of ecological capital. This process includes steps such as the assetization of the ecological system (namely ecological resources and their environment), the value of ecological assets, the factorization of ecological value, the capitalization of ecological factors, and the ecology of capital. The assetization of the ecological system means that the ecological system itself is an asset to human beings in terms the value of its intrinsic use and its scarcity. Hence, the ecological system should be compensated and invested in if it is consumed or used, that is, a sound ecological compensation mechanism should be established. The value of ecological assets means that an ecological system has value as an asset, reflecting not only in the quality of ecological products, but also in the service functions of the ecological system. The factorization of ecological value means the internalization of ecological values, that is, the factorization of the value of ecological assets. The issue of the realization of its value should be discussed by applying the economic theory of the analysis of costs and benefits, by internalizing its value into ecological products and services. The capitalization of ecological factors means that the ecological factors have the general properties of capital and can create and bring unique “surplus value” or “surplus income”, with the value (or income) being expressed in monetary terms. The ecology of capital means that a part of the “surplus value” or “surplus income” generated by the ecological capital is used to expand reproduction and another part is used to build the ecological environment, thus promoting the improvement of the regional ecological environment and the recycling and use of resources. Acknowledgements Foundation projects: National Natural Science Foundation of China Project “Research on Operational Poverty Alleviation with Ecological Assets in Ecologically Fragile Areas” (71303261); Humanities and Social Sciences Foundation Project of the Ministry of Education “Research on Security Issues of Ecological Capital Operations: An Analysis Based on Ecological Vulnerability” (12YJC790029); Project supported by Special Funds for Basic Research of Central Universities “Research on Ecological Compensation for Green Agriculture against the Background of Main Functional Zone Planning” (2012063).

Chapter 12

Altruistic Cooperative Governance of Common Resources and Its Institutional Improvements Sheng Li and Chungen Li

Abstract The theory of the tragedy of the commons, the theory of the prisoner’s dilemma and the collective action theory reveal the paradox of individual rationality but collective irrationality in the utilization of common resources. Against the background of egoism, the traditional theory provides three solutions: centralized state administration, privatization or self-governance, and considers that the infinitely repeated game relations are a necessary condition for the formation of a cooperative governance order of common resources. However, the traditional theory seeing egoism as the sole human nature as the basis of theoretical analysis is not consistent with the fact that human nature is complex and abundant, and the prevalence of altruistic behavior offers the possibility of cooperative governance of common resources. Based on the analysis of four altruistic cooperative governance behaviors regarding common resources, this paper proves that it is possible for humans to avoid “the tragedy of the commons” of common resources by introducing the game model of altruistic cooperative governance of common resources. Keyword Altruistic behavior · Common resources · Cooperative governance Common resources are natural resources that are shared by the members of the community and owned by the community, mainly including the sea, rivers, lakes, grasslands, the land and mineral resources. Common resources are public, external, scarce, and non-exclusive and non-competitive in use. The nature and characteristics of common resources make it possible for common resources to be over-exploited in a spontaneous state, leading to the tragedy of the commons. The origin of the idea of the tragedy of the commons can be traced back to the ancient Greek period, when the famous thinker Aristotle thought that “what belongs in common to most of the people is accorded the least care: they take care of their own things above all, and care less about things that are in common with others, or only so much as falls to each individually.” In 1968, the American scholar Hardin published an article S. Li (B) · C. Li School of Finance, Tax and Public Management, Jiangxi University of Finance and Economics, Nanchang 330013, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_12

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with the title “The Tragedy of the Commons”, and the common resource governance began to become a hot issue in academic research; in 2009, Ostrom was awarded the Nobel Prize in Economics for her outstanding contributions to the research on selfgovernance of common resources, and the research on common resource governance entered a new stage. Today, China is facing a resource and environmental crisis that is unprecedented in its history; the process of industrialization has enabled China’s economy to develop rapidly, but we have also paid a high price in terms of resources and environment. According to an estimate by Wang Yuqing, former deputy director of the State Environmental Protection Administration, China’s losses due to environmental pollution in 2011 amounted to RMB 2.6 trillion, roughly accounting for 5–6% of China’s GDP that year. It is thus clear that the country is likely to face extremely high environmental risks at this stage and for a long period in the future. For this reason, the Third Plenary Session of the 18th CPC Central Committee pointed out in the Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform that “We must deepen the reform of the management of the ecological environment by focusing on building a beautiful China. We should accelerate the building of a system in order to promote ecological progress, improve institutions and mechanisms for developing geographical space, conserving resources and protecting the ecological environment and promoting modernization featuring harmonious development between Man and Nature.” In May 2015, the Opinions of the CPC Central Committee and the State Council on Accelerating the Construction of an Ecological Civilization was released, and the idea that “clean, clear waters and lush mountains are invaluable assets” rose to the national will. The change in ideology has also brought about the transformation and upgrading of institutional construction. From the system of the main functional area and the system of the strictest water resources management to the implementation of the system of green performance assessment and the construction of the pilot demonstration zone of ecological civilization, the promulgation of a series of policies and measures fully reflects the emphasis on the issues of resources and the environment at the top level. However, in both theory and practice, there are still some defects and challenges in the governance of common resources. These defects exist because the theory and institutional building of the governance of common resources in the past was based on the mutual scheming of “economic man”, which is inconsistent with the reality that man is not only self-interested, but also altruistic. The mutual scheming of the self-interested “economic man” cannot “intangibly maximize the overall interests of society” in the field of the governance of common resources. Therefore, it is necessary and urgent to break through the research on the governance of common resources within the traditional self-interested idea in the new historical and environmental conditions, find a new perspective to promote the cooperative governance of common resources, improve the cooperative governance of China’s ecological environment, and promote the modernization of the system of the governance of China’s common resources and governance capacity.

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12.1 Self-interest Perspective of the Cooperative Governance Order of Common Resources Since modern times, a rich variety of theories have developed around how to maximize social welfare through cooperation, such as the social contract theory, the property rights theory and the repeated game theory. These theories either advocate the building of a cooperative governance order among humans through centralized state administration, or the building of a cooperative governance order among humans through clear property rights (privatization). Hobbes, an intellectual thinker from the Renaissance, provided the first systematic answer to the question of how selfish humans could cooperate to achieve the common good. In the opinion of Hobbes, the nature of the human being is first and foremost to seek self-preservation and survival, and thus selfish, fearful, greedy and brutal, while human relationships are in a state of mutual precaution, hostility and warfare. If there is a common power capable of stopping mutual harm, it needs to entrust all the powers to a single person or a collective of many who can translate the will of all into one will through majority opinion. This person or this collective is the Leviathan, the birth of government. Hence, from Hobbes’ point of view, a strong, centralized government is the basis for the formation of orderly human cooperation. After Hobbes, Rousseau, a famous thinker from the French Enlightenment, proposed the idea of overcoming individual self-interest from the perspective of “social contract”. In his book Du Contrat Social, Rousseau wrote: “An adequate combination of forces must be the result of men coming together… How is a method of associating to be found which will defend and protect—using the power of all— the person and property of each member”. However, Rousseau argued that “so that the social pact will not become meaningless words, it tacitly includes this commitment, which alone gives power to the others: whoever refuses to obey the general will shall be forced to obey it by the whole body of politics”. This idea of Rousseau’s was controversial, and in the opinion of those who opposed it, forcing others to obey would lead to a violent dictatorship, because if a person or an organization represents the general will, then that person or organization has the power to harness, control and supervise the entire society, thus creating an authoritarian centralized ruling that represents the general will. By such a kind of ruling, the individual freedom may thus be taken away and the individuals become slaves to the collective and servants of the majority. Thus, if the theory of Hobbes or Rousseau is followed, a collective with a common interest will act collectively to achieve the common good under some arrangement of external coercive forces, but this will either lead to a Hobbesian monarchy or a Rousseauian republican dictatorship. The subsequent scholars, based on the ideas of Hobbes and Rousseau, through continuous additions and improvements, eventually established the theory of centralized state administration of common resources, with the hope of realizing effective development and management of common resources through state administration. The Soviet Union and China’s model of resource management during the planned economy was deeply influenced by this theory.

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In order to boost the development of the British bourgeoisie at that time, Adam Smith proposed the famous “economic man” hypothesis. He argued that the “economic man” in pursuit of self-interest could ultimately maximize social interests under the guidance of the “invisible hand”. In An Inquiry into the Nature and Causes of the Wealth of Nations, Smith wrote: “He is, …, led by an invisible hand to promote an end which was no part of his intention. Nor is it always the worse for the society that it was no part of it. By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it.” This idea has now become an important pillar of the theory of property rights in common resources. The theory of property rights states that if property rights are sufficiently clear, then the common resource can be well developed and governed, regardless of who owns the initial title to the common resource. Influenced by the idea of Adam Smith, people expected to establish a free market, and achieve the effective allocation and governance of common resources through the market mechanism. This idea was taken up on by the later property rights theory. Although the property rights theory states that market power alone is not enough to solve the problem of the governance of common resources due to the influence of externalities, it expects to establish a good system of governance of common resources by clarifying the property rights of common resources and converting the external costs that cannot be solved by the market mechanism into internal costs of the organization. Coase was the most typical representative of this theory. According to Coase, regardless of who owns the rights of the common resources initially, as long as the property rights are sufficiently clear, private cost will not deviate from social cost, but will be equal, so the efficient allocation of common resources can be achieved through transactions between buyers and sellers of rights. The property rights theory of the governance of common resources has gained significant support in both academic and political circles. Hardin, the founder of the theory of the tragedy of the commons, argued that: “the public property rights are always lacking in efficiency, and the government is always unable to avoid the short-termism, making the government itself the cause of environmental problems, ‘tragedy of the commons’ in a way should be more accurately described as the tragedy of the political commons.” The property rights theory provides a theoretically perfect solution for the governance of common resources, but in practice there are two main problems: first, the assumption of zero transaction costs is too strict and does not exist in real life; second, when the number of harmed parties is large, the huge transaction costs make voluntary negotiation impossible, thus causing the “free-rider” problem. The shortcomings of the property rights theory indicate that the allocation of the property rights of common resources needs to be technically and economically feasible, and more importantly, politically feasible. To solve the problem of how human beings cooperate, the collective action theory attempts to explain this by the game theory. Based on the previous ideas, Olson came to a conclusion similar to that of Hobbes and Rousseau: unless there is coercion to make individuals act in their common interest, or unless the number of individuals in a group is quite small, rational, self-interested individuals will not act to achieve their common or group interests, because the public nature of the collective interests

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enables everyone in the group to share equally in the collective interests brought about by individual action, but its costs are borne by the individuals who act, and each person is tempted to hitch a ride on the other members, given the externalities. This view was confirmed by the Scottish thinker Hume of the Enlightenment: “Two neighbors may agree to drain a meadow, which they possess in common; because ‘tis easy for them to know each other’s mind … But ‘tis very difficult, and indeed impossible, that a thousand persons should agree in any such action; it being difficult for them to concert so complicated a design, and still more difficult for them to execute it; while each seeks a pretext to free himself of the trouble and expense, and would lay the whole burden on others.” How can cooperation arise from egoists who have no external coercive power? In order to find a more ideal solution, Professor Axelrod applied the behavioral game theory of modern economics, and by the “repeated prisoner’s dilemma game model” without the central authority, falsified Hobbes’ “Leviathan” and Rousseau’s idea that centralized authoritarianism in the form of the “general will” is a necessary condition for the formation of a cooperative order of governance in human society. In Axelrod’s game, the highest score was achieved by the “one for one” strategy with “cooperation” in the first round and then repeating the opponent’s previous strategy in each round. According to Axelrod, the criterion for a good strategy was to never betray first, and a good strategy must have three characteristics: “being nice”, “forgiving” and “not envious”. “Being nice” means never betraying first and always pursuing a cooperative strategy until the other party adopts a betrayal strategy; “forgiving” means being able to forgive the other party for past “wrongs”, and once the other party makes “correct”, treating them cooperatively; and “not envious” means tolerating other participants getting the same benefits as you. Thus, Axelrod argued that self-interested “economic man” can still cooperate among individuals without the control of a central authority, as long as the game is repeated often enough. Clearly, Professor Axelrod has made great strides in his research on cooperation among individuals seeking to maximize interests without a central authority, but the reality is that the human being does not always fully adhere to the rational principles of “being nice”, “forgiving” and “not envious”. He is not only rational but also emotional, or even behaves irrationally under the influence of personal emotions. This is one of the problems that cannot be avoided by the rational hypothesis of the “economic man”. Another problem is that, for either Hobbes, Rousseau or Axelrod, there is a common hypothesis hidden in their theories, that is, individuals are selfinterested in the pursuit of self-interest maximization, and their theories of cooperation are also based on individual self-interest. This hypothesis ignores the diversity of human nature, and in reality, the human being is not only self-interested but also altruistic. Locke, the famous intellectual of the Renaissance, wrote that: “The like natural inducement hath brought men to know that it is no less their duty, to love others than themselves; … my desire therefore to be loved of my equals in nature as much as possible may be, impose the upon me a natural duty of bearing to themward fully the like affection”. This is why modern economics no longer refuses the inclusion of altruistic behavior in the study of socio-economic life, and the paradigm

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of the governance of common resources after the introduction of altruistic behavior will take on a different look different from traditional theories.

12.2 Human Altruism and the Hierarchy of Altruistic Cooperative Governance of Common Resources As we all know, Adam Smith proposed the hypothesis of the “economic man”, which has been widely accepted in the field of social sciences. In fact, Smith saw not only the self-interested side of the human being, but also the altruistic side of man, which is human compassion. Smith regarded the compassion for others as the emotional root of human social cooperation, which he elaborated in his The Theory of Moral Sentiments: “How selfish so ever man may be supposed, there are evidently some principles in his nature, which interest him in the fortune of others, and render their happiness necessary to him, though he derives nothing from it except the pleasure of seeing it. Of this kind is pity or compassion”. Smith believed that the existence of compassion was an obvious fact that did not need to be proved by any example, and that it was by no means only possessed by people of high moral character. There are similarities between Smith’s idea and that of the ancient Chinese thinker Mencius’ “Theory of the Original Goodness of Human Nature”. In the Mencius·Gaozi I, Mencius wrote: “The feeling of commiseration belongs to all men; so does that of shame and dislike; and that of reverence and respect; and that of approving and disapproving.” Thus, altruistic human behavior does not require a lengthy discourse; it can be adequately supported by empirical evidence in reality. Generally speaking, human altruism is usually expressed at four levels in the cooperative governance of common resources.

12.2.1 Kin Altruism of Cooperative Governance Kin altruism refers to certain sacrifices that kin individuals make for their relatives that help improve their survival, such as parental help for children and sibling help for siblings. Human kin altruistic behavior is usually self-centered, in a spider-web-like pattern of differential outward spreading—the intensity of kin altruistic behavior decreases as kinship ties become distant, like the ripples of a stone being thrown into water, pushing outward around the center of a circle, layer by layer, further and further away, and thinner and thinner. Wilson developed a spectrum of declining altruistic behavior based on different “kinship indices”: at one end of the spectrum are individuals, followed by nuclear family, extended family, community, tribe, and then the highest political and social unit at the other end. In the traditional Chinese clan society, relatives who form a clan were often considerate for the collective interest of the clan or vulnerable ones in the clan, and there was often a forest, land

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or irrigation canal shared by the clan members. And then, these common resources were developed and managed through a jointly accepted agreement. This was a vivid manifestation of kin altruism in the cooperative governance of common resources.

12.2.2 Reciprocal Altruism of Cooperative Governance Reciprocal altruism is the mutual assistance provided by unrelated individuals in order to be reciprocated by their peers at a later date; if the expected response does not occur, reciprocity will cease. Reciprocal altruism is based on the sustainability of the relationship, otherwise reciprocal altruism cannot be sustainable. The sustainability of the relationship makes repeated game among individuals possible, and makes it necessary for the individuals involved in the game to have trade-offs between short-run and long-run interests—if the game is repeated many times, the participant has an incentive to build a good reputation for himself, and thus may sacrifice immediate interests for the sake of long-term interests, and the participant does so because he believes that his altruistic behavior today will pay off in the future. Reciprocal altruism has a wide and varied application in the cooperative governance of common resources, such as ecological compensation and cooperative environmental governance agreements among regions. As a specific form of reciprocity, the negotiation plays an important role in the cooperative governance of reciprocal altruism. Although self-interest is not excluded in negotiation, it can clarify the obligations of the participants and the ethical guidelines to be followed, and more importantly, repeated negotiations transform the one-time game into a series of sequential games, which provides the basis and possibility for the long-term cooperation among the participants.

12.2.3 Pure Altruism of Cooperative Governance Pure altruism is the altruistic behavior by unrelated individuals who do not expect anything in return. Mainstream biologists argue that purely altruistic behavior increases the survival adaptations of the beneficiaries and decreases the survival adaptations of the benefactors, thus failing to achieve a stable equilibrium in evolution. In order to rationalize the biological basis for purely altruistic behavior, the theory of group selection indicates that genetic evolution occurs at the population level rather than at the individual level, and that when individuals engage in altruistic behavior that benefits the population, the population is likely to gain more survival adaptations and evolve successfully as the population wins the competition for survival. Despite the extensive refutation of the theory of group selection by mainstream biologists, who argue that natural selection can only act on individual organisms rather than on populations, we can still find altruistic behavior in human society that differs from kin altruism and reciprocal altruism so much so that even Darwin, the originator of

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evolutionary biology, had to think about human altruism. For humans, the purely altruistic behavior may reduce or increase the survival adaptability of the benefactors. For example, the donor in charity does not expect reward per se, but may gain a good reputation for it; there are environmental activists whose socially beneficial altruistic behavior also suffers from persecution by ecological destroyers and is faced with the survival dilemma.

12.2.4 Altruistic Punishment of Cooperative Governance Altruistic punishment, also known as strong reciprocity, is a behavior that is neither kin altruism, reciprocal altruism, nor pure altruism. Altruistic punishment is characterized by cooperating with others in the group and punishing those who break the norms of cooperation at whatever cost (even if the violations are not directed at themselves), even in the expectation that they will get no compensation. Altruistic punishment can effectively improve the welfare level of group members by discouraging betrayal, avoidance of responsibility and “free-riding” behavior, but it is done at the cost of individuals and without additional compensation from the group’s gains. In the opinion of Bowles et al. (2006), pro-social emotions are at the root of strong reciprocal behavior. “Pro-social emotions are physiological and psychological reactions that induce agents to engage in cooperative behavior. The pro-social emotions include some, such as shame, guilt, empathy, and sensitivity to social sanction, which induce agents to undertake constructive social interactions”. Altruistic punishment can effectively explain the deficiencies of kin altruism and reciprocal altruism in explaining the problem of human cooperation and the shortcomings of the theory of group selection in explaining behavior that benefits the group but is at a high cost or even sacrificial for the individual. It demonstrates that a small number of strong reciprocators who punish the betrayers without regard for future rewards can significantly improve the survival chances of human beings, and indicates that the strong reciprocal behavior can successfully evolve and maintain equilibrium in the intense natural selection.

12.3 The Game Model of Altruistic Cooperative Governance of Common Resources In a typical prisoner’s dilemma of the governance of common resources, participants are defined as purely self-interested, but it is clear from observation and summary that human nature is not only self-interested but also altruistic. In this model, we incorporate both human altruism and self-interest into the game model of the governance of common resources and consider how the game equilibrium of the governance of common resources will change in the presence of altruistic factors, and what types

12 Altruistic Cooperative Governance of Common Resources … Table 12.1 Altruistic cooperative governance game matrix of common resources

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A

B Cooperative

Non-cooperative

Altruistic

ν-CA,π− CB

β-CA ,ϕ-β

Non-altruistic

κ-β,β-CB

0,0

of institutional design will be conducive to the cooperative governance of common resources? Assume that there are two participants A and B in the game model of altruistic cooperative governance of common resources, and that the strategy set of A is {altruistic, non-altruistic}; the strategy set of B is {cooperative, non-cooperative}. In order to further investigate the interplay of behavior and relationships between the participants, further parametric hypotheses are made: 1. 2.

3.

4.

C A is A’s altruistic cost and C B is B’s cooperation cost; When A chooses to be altruistic, if B chooses to cooperate, A’s gain is ν and B’s gain is π; if B chooses not to cooperate, B’s gain is ϕ, but A will complain of B’s non-cooperation, for which B incurs a loss of β; When A chooses to be non-altruistic, if B chooses to cooperate, A’s gain is κ, but B will likewise complain of A’s non-altruistic behavior, for which A will suffer the same loss β; if B chooses not to cooperate, then the gain for both is zero; C A , C B , ν, π, ϕ, β, and κ are constants.

According to the above hypotheses, the altruistic cooperative governance game matrix of common resources between A and B is constructed, see Table 12.1. Assume that λ is the probability that A is altruistic and γ is the probability that B cooperates. Given γ , the expected yields of A being altruistic (λ = 1) and nonaltruistic (λ = 0) are: u A (1, γ ) = (v − C A )γ + (β − C A )(1 − γ ) = vγ − C A γ + β − βγ − C A + C A γ = β − C A + (v − β)γ u A (0, γ ) = (κ − β)γ + 0(1 − γ ) = κγ − βγ

(12.1) (12.2)

Solve π A (1, γ ) = π A (0, γ ) and we have γ ∗ = β − C A /κ − v. γ∗ means that if the probability of B’s choice to cooperate is less than β − C A /κ − υ, the optimal strategy of A is altruistic; if the probability of B’s choice to cooperate is greater than β − C A /κ − υ, the optimal strategy of A is non-altruistic. Given λ, the expected yields of B’s choice to cooperate (γ = 1) and not cooperate (γ = 0) are: u B (λ, 1) = (π − C B )λ + (β − C B )(1 − λ) = π λ − C B λ + β − βλ − C B + C B λ = (π − β)λ + β − C B

(12.3)

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u B (λ, 0) = (φ − β)λ + 0(1 − λ) = (φ − β)λ

(12.4)

Solve π B (λ, 1) = π B (λ, 0) and we have γ ∗ = β − C B /ϕ − π . γ∗ means that if the probability of A being altruistic is less than β −C B /ϕ −π , the optimal strategy of B is choosing to not cooperate; if the probability of A being altruistic is greater than β − C B /ϕ − π , the optimal strategy of B is choosing to cooperate; if the probability of A being altruistic is equal to β − C B /ϕ − π , the optimal strategy of B is choosing to cooperate or not cooperate randomly. Therefore, the Nash equilibrium of the mixed strategy is: γ ∗ = β − C B /ϕ − π , ∗ γ = β − C A /κ − v, that is, A is altruistic by the probability of λ∗ = β − C B /ϕ − π , and B chooses to cooperate by the probability of γ ∗ = β − C A /κ − v. The above findings suggest that: (1) A’s choice of being altruistic or non-altruistic is inversely proportional to the difference of the yield of B’s choice to not cooperate or to cooperate, that is to say, the greater the difference between B’s choice to not cooperate or to cooperate, the smaller the probability that A will choose to be altruistic; (2) B’s choice to not cooperate or to cooperate is inversely proportional to the difference of the yield of A’s choice of being altruistic or non-altruistic, that is to say, the greater the difference between A’s choice of being altruistic or non-altruistic, the smaller the probability that B will choose to cooperate; and (3) either A or B’s choice of being altruistic or to cooperate is proportional to the difference between the yield from the complaint and the cost of altruism or cooperation, that is to say, if the greater the difference between the two, the more probably A or B will make the choice of altruism or cooperation. The above model considers the game model of A and B in simplified action and its equilibrium. In reality, the alternative actions available to the participants in the game may not be either/or. For example, B may choose to cooperate partially in addition to cooperate and not cooperate, that is, B is not completely uncooperative with A’s strategy, nor is B completely cooperative with A’s strategy, but chooses to partially cooperate. Likewise, A may choose a strategy between purely altruistic and purely self-interested that combines partial altruism and partial self-interest. To this end, the set of actions for A and B can then be extended to {purely altruistic, partially altruistic, and non-altruistic} and {fully cooperative, partially cooperative, and non-cooperative}, respectively. To analyze the equilibrium of the game between the central government and the local government in the extended action set, the following hypotheses are made about the game based on the previous section: 1. 2.

3.

A and B have each of the three alternative actions as mentioned above; α is the coefficient by which A complains about B’s choice of partial cooperation, θ is the coefficient of B’s cooperation (namely the question of how much to execute), the yield and cost of B’s cooperation are related to θ, and δ is the coefficient of yield to A when B chooses to cooperate partially (assuming that B’s cooperation of 80% and cooperation of 20% do not bring the same yield to A), where 0 < α, θ, and δ < 1; β is the losses (including economic, political and social) suffered by B for not cooperating, and when A is purely altruistic, A will enhance its complaint

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Table 12.2 Game payment matrix of altruistic cooperative governance of common resources in the extended action A

B Fully cooperative

Partially cooperative

Non-cooperative

Purely altruistic

ν-CA ,π-CB

αβ + θν- CA ,π-αβ-θCB

2αβ- CA , ϕ-2αβ

Partially altruistic

ν-αβ-ωCA , αβ + ωπ- CB

θν-ωCA , ωπ-θCB

αβ-ωCA , ωϕ-αβ

Non-altruistic

κ-2αβ, 2αβ- CB

θν-αβ,αβ-θCB

0,0

4.

against B for not cooperating, with the complaint effort set as 2β and 2β > CA ; and when A chooses to be purely altruistic, A’s punishment for B choosing to cooperate partially is greater than the altruistic cost; ω is the coefficient of A’s choice of partial altruism.

According to the above analysis, the game payment matrix for A and B in the extended action is constructed, see Table 12.2. It can be found in Table 12.2 that given A’s choice of strategy, when A chooses to be purely altruistic, the yields of B’s choice of being fully cooperative, partially cooperative, and non-cooperative are π − C B , π − αβ − θ C B , and ϕ − 2αβ, respectively. At this point, B does not have a dominant strategy, and B’s choice of strategy depends on B’s cooperation yield π, cooperation cost C B , non-cooperation yield ϕ, coefficient α of A’s complaint against B, the value of the loss β of noncooperation and their interrelationships. Similarly, B’s yields when A chooses to be partially altruistic and non-altruistic can also be obtained, and we find that B still does not have a dominant strategy. On the contrary, there is also no dominant strategy for A if B’s strategy is given. Conclusion: In the altruistic cooperative governance game of common resources in extended action, given either A’s or B’s strategy, there is no dominant strategy for the other side, implying that there is no unique Nash equilibrium solution for either side of the game. The optimal strategy for either side depends on the costs and yields of the corresponding strategy, as well as on the severity of the punishment for the other side’s non-altruism or non-cooperation and the coefficient of complaint by both sides.

12.4 Institutional Improvements in Altruistic Cooperative Governance of Common Resources The traditional theory of common resource governance takes the self-interested “economic man” as the only hypothesis of human nature, assuming that individuals, enterprises or governments in the development and governance of common resources are all purely self-interested in pursuing their own interests, which is inconsistent with the facts that human nature is complex and abundant, and the human altruistic behavior is possible and widespread. In the face of the devastating outcome of the tragedy of

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the commons, it is a matter of life and death for human beings whether the participants adopt the strategy of cooperation or confrontation. We need to build a more positive institutional system of governance of common resources based on a richer and more realistic assumption of human nature. We need to consider the influence of human nature, institutional norms, historical traditions, cultural practices, social capital, and even community structures and patterns on individual choices. We must explore under which institutional environment the individuals will adopt the cooperative strategy and behaviors conducive to the protection of common resources, and under which circumstances they will choose the non-cooperative strategy and behaviors that are unfavorable for the governance of common resources or even destructive of common resources. The altruistic human behavior opens up a path for the research on cooperative governance of common resources that is different from the traditional egoist theory. However, we also believe that although human beings have an altruistic nature, the generation of altruistic behavior is not always unconditional, and there are even contradictions and conflicts between self-interest and altruism. How to create a good environment for altruistic behavior is a moral imperative for social scientists and practitioners.

12.4.1 Establishment of a Self-interest Monitoring and Punishment Mechanism Madison, a central figure in the formulation of the United States Constitution of 1787, once said that: “If men were angels, no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.” Although the “invisible hand” of self-interest can promote the social interests more effectively than his true intention, in the area of governance of common resources, many are caused by the self-interested behavior of ability. For individuals, such behavior is consistent with the rational orientation of maximizing interests, but for the collective, such behavior is catastrophic and will lead to incalculable damage to common resources. How to prevent the destructive impact of extreme self-interest on common resources is an important part of the design of cooperative governance systems for common resources. For this purpose, we need to establish a monitoring mechanism for self-interested man and behavior and improve the citizen participation and public interest litigation system for environmental protection. “The masses have sharp eyes”. The public participation in supervision can identify problems in a timelier manner, reduce information asymmetry in government supervision, and increase the probability of discovering acts that damage common resources. On the other hand, we must improve the system of environmental justice, enhance the punishment for those who destroy public property, avoid the embarrassing situation of “high cost of law-abiding and low cost of violating the law”, strengthen the review mechanism for filing cases of environmental crimes, and enhance the role of environmental courts in the governance of common resources.

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12.4.2 Establishment of a Protection and Reward Mechanism for Altruists Human beings are able to cooperate not only because of the pursuit of reciprocity and altruism, but also because we are always capable of putting ourselves in the other person’s shoes, and are always endowed with an innate ability to think outside the box. Although human beings can form some kind of appropriate rules and order through this kind of sympathetic interaction, “if there is no reward or punishment, even the virtuous man cannot be transformed”. If there is no punishment for extreme egoists and protection for altruists, the goodness of altruistic behavior in the cooperative governance of common resources will not be demonstrated adequately. How to protect the good side of human nature from being suppressed by the evil side of human nature is an issue that needs to be fully considered in the design of the system of cooperative governance of common resources. Mr. Zhang Zhengxiang, the “Guardian of Dianchi”, has been elected as one of the “Top Ten Outstanding Folk Environmental Protectors of China”, “Nice Man of Kunming” and “Touching China’s Person of the Year” because of his long-term commitment to the protection of Dianchi Lake. However, this heroic man has suffered great hardship because of his righteous actions—not only did he become heavily indebted and his family broke up, but also, he was once knocked off a mountain, causing disability to his right hand and blindness to his right eye. In order to avoid the phenomenon of being “strenuous but unpleasant” or even “blood and tears” for the protectors of common resources, we must first establish a practical and effective mechanism to protect the altruists’ rights to life, health, personal freedom and property from being violated by the outside world, and safeguard their basic dignity as citizens; second, we must establish a reward mechanism for altruists to educate, encourage, publicize and reward their behavior of protecting public interests and common resources, so that they can receive the honors for their behavior, and in this way raise the ecological awareness of the whole population and increase the enthusiasm of citizens to participate in the governance of common resources.

12.4.3 Establishment of a Fair and Equitable Cooperation Cost and Surplus Sharing Mechanism Creation and sharing of cooperative surpluses is the basic motivation for human cooperation, and equity and fairness are the two principles of sharing that are commonly used in reality. If human beings fail to establish a fair and equitable cooperation cost and surplus sharing mechanism, this will greatly undermine their motivation and incentive to participate in cooperative governance. In this regard, the Kubuqi Desert governance model led by Inner Mongolia Elion Resources Group is a good testimony to the success of altruistic cooperative governance of common resources. The UN Environment Programme (UNEP) also established the Kubuqi Desert Ecological

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Management Area as an “ecological economy demonstration zone” for global deserts in 2014. This marks the altruistic cooperative governance model of the Kubuqi Desert attracting the attention of the United Nations. Wang Yang, a member of the Political Bureau of the CPC Central Committee and Vice-Premier of the State Council, pointed out during his visit to the ecological construction of the Kubuqi Desert that “it is a very good idea to protect the legitimate rights and interests of those who treat the desert, ensure that enterprises and individuals involved in sand control receive reasonable economic returns and due political credit, and fully unleash the vitality of the market, enterprises and social organizations, and we hope that more social forces can participate in desert governance”. This fully recognizes the important role of reward and punishment, as well as cooperation cost and surplus sharing in practice in the altruistic cooperative governance of common resources. Therefore, in the cooperative governance of common resources, it is necessary to scientifically define the rights and obligations of protectors and beneficiaries, establish a fair and equitable long-term cooperative relationship by improving the ecological compensation mechanism between upper and lower levels of government and horizontal government, reduce participants’ concerns about future instability by providing financial subsidies to participants of cooperative governance, human resource training, and cobuilding of parks, and create a good environment and platform for fair and equitable cooperative governance. Acknowledgements Supported by the National Social Science Fund of the China Youth Project “Research on Promoting the Modernization of China’s Collaborative Governance Capacity of Environmental Emergencies” (15CZZ041); National Social Science Fund of the China Youth Project “Research on the Collaborative Governance Mechanism of Local Government in the Allocation and Governance of River Basin Water Resources” (13CZZ054); Ministry of Education Humanities and Social Sciences Youth Project “Research on the Collaborative Governance Mechanism of River Basin Water Pollution across Administrative Regions” (11YJC630104).

Reference Samuel B, Herbert G (2006) The origins of human cooperation. In: Herbert G, Samuel B (eds) Human pro-sociality and its study—an economic analysis beyond economics. Shanghai Century Publishing Group, pp 55–57

Chapter 13

Analysis of the Efficiency of Forestry Production and Convergence in China’s Four Major Forest Areas Based on the Perspective of Carbon Sequestration Benefits Longfei Xue, Xiaofeng Luo, and Xianrong Wu Abstract This paper incorporates the sequestration of forestry carbon into the forestry economic accounting system, builds the DEA-Malmquist efficiency index with positive externality output, and based on a systematic calculation of the forestry carbon sequestration, analyzes the changes and causes of the efficiency of forestry production in China’s four major forest areas from 1988 to 2013, and further examines its efficiency convergence. The results indicate that: (1) due to the large differences in forest area, industrial development, etc., the amount and value of carbon sequestration also vary greatly among the four major forest areas, with the total output value of carbon sequestration ranking from high to low being the Southwest (187.069 billion yuan), the Northeast (133.541 billion yuan), the South (84.273 billion yuan), and the North (40.735 billion yuan); (2) from 1988 to 2013, the overall efficiency of forestry production increased nationwide, mainly due to the push of technical efficiency, with an annual average growth rate of 0.6%; the efficiency of forestry production in Southern and Northeastern Forest Areas increased, but that of Southwestern and Northern Forest Areas were declining; (3) the efficiency of Southwestern and Southern Forest Areas showed an inverted “U” trend with the change of time, and among the four major forest areas, the Southern Forest Area had the highest mean efficiency at 1.036, followed by 1.020 for the Northeastern Forest Area; (4) there is no σ convergence in the Malmquist index among the four major forest areas of China; instead, there is also an absolute β divergence, that is, the absolute value of the efficiency of forestry production and growth rate differences of the four major forest areas did not reduce over time. Keywords Sequestration of forestry carbon · Efficiency changes · DEA-Malmquist · Convergence X. Luo · X. Wu College of Economics and Management, Huazhong Agricultural University, Wuhan 430070, China L. Xue (B) · X. Luo · X. Wu Hubei Rural Development Research Center, Wuhan 430070, China © Social Sciences Academic Press 2022 W. Zhang and F. Yu (eds.), Global Ecological Governance and Ecological Economy, Research Series on the Chinese Dream and China’s Development Path, https://doi.org/10.1007/978-981-16-7025-1_13

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13.1 Introduction Global climate change has exerted a significant impact on mankind and economic development, and therefore becomes a major issue of concern to governments and in the economic, scientific fields and in other fields. In 2013, the Fifth Assessment Report of the Intergovernmental Panel on Climate Change (IPCC0) pointed out that since the twentieth century, the average surface temperature on earth has risen by 0.89 °C, the mean sea level has risen by around 19 cm, and the global climate change has brought about an unprecedented survival crisis for human beings and ecosystems. Hence, it has become a consensus of countries all over the world to reduce carbon emissions in order to cope with the impact of climate change. There are two main ways to reduce carbon emissions and cope with global climate change: reducing carbon emissions and increasing carbon sequestration. China’s rapid economic growth is accompanied with a continuous increase in carbon emissions. The urgency of carbon emission reduction requires China to reduce the absolute carbon emissions and reduce greenhouse gases in the atmosphere by increasing carbon sequestration. Compared with the reduction of carbon emissions, the increase in carbon sequestration does not reduce absolute carbon emissions, but it can still reduce atmospheric carbon concentration by following the carbon neutrality principle through the carbon capture and storage mechanism. Compared with farmland and grassland, forestry has a stronger carbon absorption capacity, is simple and easy to implement, and has a lower requirement for capital, technology and equipment. Hence, paying great attention to forestry reform and forestry production and development of the sequestration of forestry carbon become the important approaches to reducing the concentration of carbon dioxide in the atmosphere and coping with climate change. Under the low-carbon requirements, the economic, ecological and social benefits of forestry and carbon sequestration have attracted more and more attention, and the research hotspots are mainly concentrated in three aspects: (1) research on the benefits of the sequestration of forestry carbon. The sequestration of forestry carbon can effectively enhance biodiversity, conserve water, improve the environment, maintain soil and water, etc., play a significant role in climate change and it has the cost advantages. The carbon sequestration function of forests helps to stabilize and reduce greenhouse gases in the atmosphere. Apart from ecological benefits, the economic benefits of the sequestration of forestry carbon are also the focus of scholars. The development of the sequestration of forestry carbon can not only improve the composition of farmers’ forestry income and steadily increase that income, but it also has a significant positive ecological impact on the stability of national economic growth. (2) The policy and response to risks of sequestration of forestry carbon. The sequestration of forestry carbon is a multidisciplinary issue of research integrating natural and social sciences, and the government needs to play a guiding role in the development of carbon sequestration. Raising awareness and willingness of forest operation entities to trade in carbon sequestered forests and appropriately changing regional subsidy standards will be conducive to the development of the sequestration of forestry carbon and achieve a win–win situation for

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farmers, the government and society. (3) Research on the efficiency of forestry input and output. Many scholars believe that the efficiency of China’s forestry production is low, but the room for improvement is large. Scientific increase of forestland area, appropriate change in the structure of the forest industry, a reasonable arrangement of science and technology development and application will be helpful for improving the efficiency of China’s forestry production. As stated above, current studies focus on the efficiency of forestry production, the benefits and policy development of the sequestration of forestry carbon, with little related literature on the combination of carbon sequestration benefits and economic benefits, and incorporating it as positive externality output into the accounting system of forestry economics. In the economic system, the complete production process comprises both factor inputs and outputs. Forestry as an industry combined with ecological, economic and social benefits can yield economic products in a general sense such as timber, forestry food, and it also has the positive externality output of carbon sequestration. However, the current accounting of China’s forestry economics does not include the statistics of the carbon sequestration economy. Hence, this paper intends to start from the accounting system of forestry economics, and incorporate the value of carbon sequestration with positive externality output into the total economic output of forestry to build the DEA-Malmquist efficiency index. Based on the systematic calculation of the sequestration of forestry carbon, the period from 1988 to 2013 is divided into six periods according to the division method of China’s forest resources survey, for estimating the amount and value of the sequestration of forestry carbon in the four major forestry areas of China, and an analysis of the forestry Malmquist production efficiency and its decomposition index; further, the convergence test of the efficiency of forestry production of the four major forest areas is conducted; finally, the results of the study are discussed.

13.2 Research Method and Variable Selection 13.2.1 Introduction to the DEA-Malmquist Method The traditional DEA model has the limitation of evaluating the efficiency of the decision unit only by the horizontal comparison of cross-sectional data. When the panel data are being analyzed, the time factor causes changes to the production frontier in each period, making it difficult to perfect the longitudinal comparison benchmark of data. The DEA-Malmquist index is more suitable for panel data by decomposition into two parts: efficiency change and technical progress. Set the period t as the base period, x t , yt represent the input and output in the period t, then the change in the input–output relationship from (x t , y t ) to (x t+1 , y t+1 ) is the change of efficiency. The Malmquist index in period t + 1 is expressed as:

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 M t,t+1 =

D t (x t+1 , y t+1) D t+1 (x t+1 , y t+1 ) D t (x t , y t )D t+1 (x t , y t )

1/ 2 (13.1)

According to the Färe analysis, Eq. (13.1) can be decomposed into the efficiency change (EC) index and the technical progress (TP) index under the hypothesis of constant returns to scale. EC =  TP =

D t+1 (x t+1 , y t+1 ) D t (x t , y t )

D t (x t , y t )D t (x t+1 , y t+1 ) D t+1 (x t , y t )D t+1 (x t+1 , y t+1 )

(13.2) 1/ 2 (13.3)

where, when Mt,t + 1 > 1, it indicates an increase in efficiency; when Mt,t + 1 < 1, it indicates the decrease in efficiency; and when Mt,t + 1 = 1, efficiency remains unchanged. When the efficiency change (EC) or the technical progress (TP) is greater than 1, it is a driving force for overall efficiency growth; otherwise, it has a dampening effect on the improvement of efficiency.

13.2.2 Variable Selection and Description Based on the above analysis and the relevant data and formulas described above, the data required for the calculation are mainly derived from the 5th–8th China Forest Resources Reports, 1988–2013 Forestry Statistical Yearbooks, China Statistical Yearbooks and other similar indexes from different databases, and are calculated through comparison and correction. According to the introduction of the method, the DEA-Malmquist index is measured by comparing the decision units in successive periods, and since the statistics of China’s forest resources are collected once every five years, six time periods of 1988, 1993, 1998, 2003, 2008 and 2013 were selected for analysis. According to the regional division by the National Bureau of Statistics of China and the China Forestry Development Report, and considering the geographical distribution features of China’s forestry industry and the distribution characteristics of forestry resources, in this study China’s 31 provinces (municipalities and autonomous regions) are divided into four major forest areas: the Northeastern Forest Area, covering Inner Mongolia, Liaoning, Jilin and Heilongjiang; the Southwestern Forest Area, including Sichuan, Yunnan and Tibet (for the statistics of forestry data, Chongqing and Sichuan are combined); the Southern Forest Area, comprising Shanghai, Jiangsu, Zhejiang, Anhui, Fujian, Jiangxi, Hubei, Hunan, Guangdong, Guangxi, Hainan and Guizhou; and the Northern Forest Area, covering Beijing, Tianjin, Hebei, Shanxi, Shandong, Henan, Shaanxi, Gansu, Qinghai, Ningxia and Xinjiang.

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According to the basic theory of economics, capital, labor and land are the three most important elements in the production function. The main output value of carbon sequestration as part of the positive externality output in the total forestry output value is closely related to the inputs of capital, labor and land. Meanwhile, the DEA-Malmquist measures a relative index, which requires comparability between decision units, but the selected indicators do not need to fully cover all input and output elements. The results of the calculation can also truly reflect the efficiency of the research objective. Hence, this paper selects capital, labor and forest area as the input indicators, and the sum of the total output value of forestry economy and the output value of carbon sequestration as the output indicator. 1.

2. 3. 4.

1

Capital input K. Select the “completed forestry fixed asset investment” from the Forestry Statistical Yearbook, and take 1998 as the base period, and calculate pursuant to the “fixed asset price index” in the China Statistical Yearbook. According to the completed forestry fixed asset investment, the perpetual inventory method (PIM) is utilized to measure the forestry capital stock through the formula: K t = (1 − δ)K t−1 + It , where K t and I t represent capital stock and completed fixed investment in the period t, respectively, and δ represents the geometric depreciation rate. For the calculation of the annual capital stock K 0 in the base period, this paper applies the method of Lü Xiaojun: K o = Io /(g + δ), where g represents the annual average growth rate of fixed asset investment, which is calculated in this paper by the sequential comparison method; δ is the depreciation rate of fixed asset investment, and is set as 5%. Labor input L. Select the “number of forestry staff at the end of the year” from the Forestry Statistical Yearbook. Land input F. Select the “forest area” of each region in the forest survey. Output indicator Y. In this paper, the output indicator is the total value of forestry output with positive externality output, which is the sum of the carbon sequestration value and the “total forestry output value” in the Forestry Statistical Yearbook. First, the amount of carbon sequestration is measured, and then the carbon sequestration value is calculated based on the unit price of 33.14 yuan/ton.1 For the “total forestry output value”, the year 1998 is taken as the base period, and it is calculated according to the forestry output value price index in the “total output value of agriculture, forestry, animal husbandry and fishery” in the China Statistical Yearbooks over the years.

According to the 2014 Global Carbon Emissions Trading Market Development Report, the total trading volume on the global carbon market in 2013 was about 10.42 billion tons, with a total value of about US$54.908 billion, and the unit price of carbon sequestration was about 33.14 yuan/ton at an average exchange rate of 6.2897 that year.

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13.3 Empirical Analysis 13.3.1 Calculation of the Value of Carbon Sequestration in China’s Four Major Forest Areas This paper adopts the method of forest stock expansion (also known as the method of forest biomass conversion factor) to calculate the amount of carbon sequestration, which is in essence the estimate of the total carbon sequestration of the whole forest by projecting the amount of carbon sequestered in the forest understory vegetation and in the forest soil through the biomass conversion factor. Although this method of calculation cannot accurately reflect the carbon sequestration stocks and the economic value of carbon aggregation in each region of China, it can, to some extent, reflect the general trend of the development of the sequestration of forestry carbon in China. The specific calculation formulas are: CF =



(Si j × Ci j ) + α



(Si j × C i j ) + β



(Si j × Ci j ) + β

Ci j = Vi j × δ × ρ × γ



(Si j × Ci j ) (13.4) (13.5)

In Eq. (13.4), where S ij and C ij represent the area and forest carbon density of the jth forest in the i-th area, respectively; in Eq. (13.5), V ij denotes the carbon sequestered per unit area of the jth forest in the i-th area. According to Eq. (13.4), the total carbon sequestration can be divided into three parts: forest biomass  × c carbon sequestration [ (s i j i j )], understory vegetation  carbon sequestration  [α (si j × ci j )], and forest soil carbon sequestration [β (si j × ci j )]. In calculating the “total sequestration of forestry carbon” of each province (municipality and autonomous region) in China, the conversion coefficient adopts the default value specified by IPCC. Here, the proportionality coefficient α of the sequestration of forestry biomass carbon and the sequestration of understory vegetation carbon takes 0.195. By the coefficient α, all sequestration of understory vegetation carbon can be estimated when the forest biomass is known; the proportionality coefficient β of the sequestration of forestry biomass carbon and that of forest soil carbon takes 1.244, and the coefficient β is used to calculate the carbon sequestration contained in the forest land; the biomass expansion coefficient δ takes the value 1.90, the role of δ is to calculate the bioaccumulation of forest trees; the volumetric density coefficient ρ takes 0.5; and the carbon content γ takes 0.5. According to the above formulas and index, the sequestration of China’s provincial forestry carbon is calculated, and the results of the specific calculation are shown in Table 13.1. The three provinces with the highest carbon sequestration value are Sichuan, Tibet and Heilongjiang, which account for 43% of the total carbon sequestration of China, and of which Sichuan and Tibet belong to the Southwestern Forest Area. From the perspective of forest area distribution, the total output values of

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Table 13.1 Average carbon sequestration in China’s major forest areas, 1988–2013 Region

Forest stock (104 m3 )

Carbon sequestration (108 t)

Carbon sequestration value (108 yuan)

Beijing

802.39

0.09

3.08

Tianjin

191.18

0.02

0.73

Hebei

6863.42

0.8

26.35

Shanxi

6249.95

0.72

24

Shandong

3749.53

0.43

14.4

Henan

8759.33

1.01

33.63

Shaanxi

31,375.67

3.63

120.47

Gansu

18,205.46

2.11

69.9

3504.67

0.41

13.46

Qinghai Ningxia

542.28

0.06

2.08

Xinjiang

25,847.53

2.99

99.25

Total of northern forest areas

106,091.41

12.27

407.35

Inner Mongolia

106,126.09

12.29

407.5

Liaoning

17,418.29

2.02

66.88

Jilin

80,640.16

9.34

309.64

Heilongjiang

143,601.63

16.64

551.39

Total of northeast forest region

347,786.17

40.29

1335.41

Sichuan

146,596.35

16.98

562.89

Yunnan

135,528.07

15.7

520.39

Tibet

191,355.68

22.17

787.41

Total of southwest forest region

473,480.1

54.85

1870.69

Shanghai Jiangsu

60.38

0.01

0.23

2437.13

0.28

9.36

Zhejiang

13,305.64

1.54

51.09

Fujian

41,521.67

4.81

159.43

Anhui

10,649.43

1.23

40.89

Jiangxi

28,353.92

3.28

108.87

Hubei

16,815.16

1.95

64.57

Hunan

23,940.84

2.77

91.93

Guangdong

23,827.69

2.76

91.49

Guangxi

33,961.05

3.93

130.4

Hainan Guizhou Total of southern forest region

0.8

26.56

17,687.08

6916.02

2.05

67.91

219,476.01

25.41

842.73 (continued)

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Table 13.1 (continued) Region

Forest stock (104 m3 )

Carbon sequestration (108 t)

Carbon sequestration value (108 yuan)

National total

1,146,833.69

132.82

4456.18

Note The statistics of Sichuan include that of Chongqing

China’s four major forest areas rank from high to low: Southwestern, Northwestern, Southern and Northern. In the Southwestern Forest Area with the highest value of carbon sequestration, the total carbon sequestration value reaches 187.069 billion yuan, accounting for about 42% of the national total; the total carbon sequestration value of the Northeastern Forest Area is second only to the Southwestern Forest Area and reaches 133.541 billion yuan; and the Northern Forest Area, despite including the greatest number of provinces, has the least value of carbon sequestration, and the total carbon sequestration value of these 11 provinces is 40.735 billion yuan. From the calculation formulas of the carbon sequestration value, it can be found that the forest area and the unit forest stock are the main factors influencing the total value. The Southwestern Forest Area and the Northeastern Forest Area have the largest forest areas, the most abundant forestry resources, maturely developed carbon sequestration forest, and high total forest stock, so the total values of their carbon sequestration are higher than other forest areas.

13.3.2 Analysis of the Efficiency of Forestry Production The DEAP 2.1 software is used to measure the efficiency of forestry production of China’s four major forest areas, and decomposes it into efficiency change and technical change for analysis.

13.3.2.1

The Change in the Efficiency of the National Forestry Production

The efficiency of national forestry production and its changes are calculated using the Malmquist index method (see Table 13.2). The mean value of the national Malmquist index from 1988 to 2013 was 1.006, with a growth rate of 0.6%, indicating that the efficiency of the overall forestry production increased during the study period, but the growth rate was slow, and the optimization of the efficiency of forestry production y was not noticeable. Since 2008, the efficiency of China’s forestry production has improved significantly, probably for the reason that the policies and measures such as six major forestry projects and reform of the system of collective forest rights implemented by the country has begun to achieve some remarkable effects. Under the guidance of science and technology plans, the government advanced the application

13 Analysis of the Efficiency of Forestry Production and Convergence … Table 13.2 Malmquist index for national forestry calculation and decomposition

203

Year

Efficiency change (EC)

Technical change (TC)

Malmquist index

1988–1993

0.785

1.281

1.006

1993–1998

0.557

1.717

0.957

1998–2003

2.807

0.359

1.007

2003–2008

1.112

0.843

0.937

2008–2013

0.920

1.236

1.137

Avg

1.047

0.961

1.006

Note The statistics of Sichuan includes that of Chongqing

of high and new technologies in forestry development, and has gradually accelerated the upgrading of forestry technology and the adjustment of the industrial structure. These actions have driven the improvement of the technical efficiency of forestry nationwide, and have greatly promoted the technical progress in the country’s forestry industry. Further decomposition of the indicators reveals that the mean value of efficiency change (EC) of forestry in the study period increased by 4.7%, while that of technical change (TC) decreased by 3.9% during the study period. This means that the contribution to the increase in the efficiency of forestry production mainly derived from changes in technical efficiency. The EC index showed a continuous downward trend in the period from 1988 to 1998, and the most obvious downward trend occurred from 1993 to 1998, with a decline of 44.3%; however, the TC index remained above 1 during this period. The main reason might be that China’s forestry industry had just finished a period of stagnation, and under the dual pressure of the needs of production and construction and the survival of the population, the State increased its investment in forestry production technology, the technical progress brought about a significant increase in forestry efficiency, but there were still many problems with the allocation of resources. From 1998 to 2008, the EC index was on the rise while the TC index was declining. The reason might be that since 1998, the Party and the government have strengthened the protection of forest resources, especially natural forest resources, and have introduced a deep-level reform of the distribution of forestry factor inputs, so that the efficiency of forestry production has greatly improved. In the meantime, although forestry technology has been making progress, it still failed to meet the requirements due to the dual pressure of China’s forestry as a basic industry and public welfare, and the improvements in efficiency brought about by technical progress could not be reflected.

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13.3.2.2

1.

Analysis of the Changes in the Efficiency of China’s Four Major Forest Areas

Integrated efficiency analysis of the four major forest areas

In Table 13.3, it can be seen that among the four major forest areas, the highest mean value of the Malmquist index in the period from 1988 to 2013 is 1.036 for the Southern Forest Area, followed by 1.020 for the Northeastern Forest Area, and their EC values were 1.087 and 1.060, respectively. The rationality of the allocation of resources has contributed to the improvement of the efficiency of forestry production. Guangxi, Hainan and other regions of the Southern Forest Area are the forest treasures of China in the tropical and subtropical zones, where there is a rich variety of economic trees, and their ecological and economic benefits have always been valued by the government. Also, the local participants in forestry production employ mature management methods of forestry production, which may also be the reason for the higher degree of efficiency in the Southern Forest Area. The Greater Khingan Range, the Lesser Khingan Range and Changbai Mountain in the Northeastern Forest Area are the largest forest zones in China, and also the key areas for the implementation of the Natural Forest Protection Project. The abundant forest resources and strong support from the State maintains the efficiency of production of this forest area at a high level. The Malmquist index is 0.976 and 0.903 for the Northern and Southwestern Forest Areas, respectively, failing to achieve an optimal input–output efficiency. In the Northern Forest Area, Shandong, Hebei and Henan mainly focus on the production of grain, Gansu, Qinghai and Ningxia have a dry climate, few and low-quality forest resources, and Beijing and Tianjin lay stress on the industry and service sector, and in these regions, forestry only plays an ecological role. This may be the reason for the low efficiency in the Northern Forest Area. The reason why the Southwestern Forest Area, such as Sichuan and Yunnan, has a low degree of efficiency may be the numerous forest disasters that have occurred in this area since 1988. In particular, the successive severe droughts occurring in recent years have caused huge losses to the forestry industry and have significantly reduced the efficiency of production. As for the Northern Forest Area, the EC index has declined by 0.4%. The reasons may be that the forest resources are of poor quality in this area, the policy focuses on other industries, forestry production is scattered and it is difficult to reasonably use resources. The technical progress in the four major forest areas has failed to improve efficiency, probably for the reasons that the high and new technology achievements have increased in the forestry industry, but the promotional efficiency is poor, and the conversion rate of technical achievements is low; and that the supply of forestry technology can hardly meet the needs of forestry as a multifunctional combination of economic, ecological and social functions, and many technologies have become ineffective supplies.

13 Analysis of the Efficiency of Forestry Production and Convergence … Table 13.3 Malmquist index for carbon sequestration calculation and decomposition of four major forest areas, 1988–2013

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Province

Efficiency change (EC)

Technical change (TC)

Malmquist index

Beijing

1.230

1.073 1.320

Tianjin

1.063

0.925

0.983

Hebei

1.078

0.967

1.043

Shanxi

1.032

0.984

1.015

Shandong

1.214

0.985

1.195

Henan

1.102

0.969

1.068

Shaanxi

1.014

0.955

0.968

Gansu

0.890

0.978

0.870

Qinghai

0.666

0.944

0.629

Ningxia

0.787

1.024

0.806

Xinjiang

0.880

0.950

0.836

Total of 0.996 northern forest areas

0.9776

0.976

Inner Mongolia

1.021

0.950

0.970

Liaoning

1.165

0.952

1.109

Jilin

1.017

0.988

1.005

Heilongjiang

1.037

0.959

0.994

Total of northeast forest region

1.060

0.962

1.020

Sichuan

1.025

0.946

0.970

Yunnan

1.015

0.941

0.955

Tibet

1.000

0.784

0.784

Total of southwest forest region

1.013

0.890

0.903

Shanghai

0.911

1.001

0.912

Jiangsu

1.067

1.016

1.084

Zhejiang

1.180

0.927

1.094

Fujian

1.152

0.942

1.085

Anhui

1.152

0.958

1.104

Jiangxi

1.473

1.055

1.553

Hubei

1.130

0.956

1.081

Hunan

1.163

0.950

1.104

Guangdong

1.132

0.941

1.065

Guangxi

1.076

0.947

1.019 (continued)

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Table 13.3 (continued)

Province

Efficiency change (EC)

Technical change (TC)

Malmquist index

Hainan

0.997

0.954

0.950

Guizhou

1.038

0.957

0.994

Total of 1.087 southern forest region

0.951

1.036

National total

0.961

1.006

1.047

Note The statistics of Sichuan includes that of Chongqing

2.

Analysis of differences in the trends of change in efficiency of the four major forest areas

Through the estimation of efficiency of the distribution of China’s forest area, combined with Fig. 13.1, we can find that the efficiency of Southwestern and Southern Forest Areas are basically in an inverted U-shaped shape of change. Since 1988, the Malmquist value for the Southern Forest Area remains above 1, indicating that the efficiency of its forestry production is in a state of continuous improvement and rapid growth, and especially in the period from 2008 to 2013, the Malmquist value reached 1.464; the Southwestern Forest Area witnessed the most obvious fluctuations in Malmquist value, reaching the highest value of 1.557 in the period from 1998 to 2003, with an increase of 55.7%, but the index was only 0.72 in the period from 2003 to 2008, with a decrease of 28%. From 1998 to 2003, the efficiency of the two forest areas increased at a high speed. The reason may be the transformation of forestry construction since 1998, when the economic value of forestry was fully embodied, its ecological value became increasingly prominent, the benefits of

Year

Northern Forest Area

Northeastern Forest Area

Southwestern Forest Area

Southern Forest Area

Fig. 13.1 Changes in the efficiency of the forestry production in the four major forest areas

13 Analysis of the Efficiency of Forestry Production and Convergence …

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carbon sequestration of forestry were fully developed, and the increase and allocation of factor input became more reasonable. The reason for the general decline in the period from 2003 to 2008 may be the frequent occurrence of natural disasters throughout the country, especially the major geological disasters that hit the Southern and Southwestern Forest Areas in 2008. Earthquakes, droughts and heavy snowfall occurred and had a great impact on forestry production. In the Northeastern Forest Area, except the declining efficiency of forestry production from 1998 to 2003, it showed an improving trend with relatively moderate fluctuations in the index, and the efficiency of forestry production needed to be improved; in the Northern Forest Area, it showed a trend of alternating between high and low, but the fluctuations were not obvious, with the index greater than 1 in the periods from 1988 to 1993 and from 2008 to 2013, and there was a failure to improve efficiency in the other periods. The reasons why the efficiency in the Northeastern and Northern Forest Areas from 2008 to 2013 was greatly improved are possibly that the ecological benefits of forestry became increasingly prominent against the background of environmental degradation in the Northern and Northeastern Forest Areas, such as sandstorms and droughts, and the State began to implement a new round of the “Three Norths” Protection Forest Program, which has further improved the efficiency of forestry inputs and outputs.

13.4 Convergence Analysis of the Efficiency of Forestry Production 13.4.1 Method of Convergence Test In order to further explore whether the growth gap in the efficiency of forestry production of the four major forest areas will disappear in the long run, this paper uses σ convergence and absolute β convergence to analyze the efficiency of forestry production. The study of Barro and Sala-I-Martin clarifies the two kinds of convergence: σ convergence means that the difference in relative per capita income across economic regions will gradually decline over time; β convergence means that the growth rate of the economic regions with a low per capita output at the beginning of the period is higher than those with high per capita output indicators.

13.4.2 σ Convergence Test This section judges the α convergence of the efficiency of forestry production in China’s four major forest areas, and uses the data from the calculated values of the Malmquist index for the four major forest areas. The time period is from 1988 to 2013, but because the sample utilizes a phase analysis, there are only five actual Malmquist index data. Although the sample size is small, the time data at the five nodes can

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also make some judgments on the phase-wise trend of carbon sequestration. In this paper, the method of coefficient of variation is used to analyze the α convergence, namely:

cv =

s s= x

 N

2   Xi − X  i N

(13.6)

where N is the number of regions, Xi is the Malmquist index value, and X¯ is the mean value of the Malmquist index. From 1988 to 2013, the variability index of the efficiency of the national forestry production showed fluctuating changes, and with a convergence trend in the periods from 1993 to 1998 and from 2003 to 2008. However, it was divergent to the largest extent in the period from 1998 to 2003 (see Fig. 13.2 for the specific trend). From the perspective of the four major forest areas, the Southern and Northern Forest Areas showed a convergence consistent with the national trend, with obvious upward and downward fluctuations. The divergence of the Southern Forest Area was particularly obvious from 1998 to 2003, and the reason was probably that in 1998, the country was hit by massive floods, and the forestry industry in all provinces (municipalities and autonomous regions) suffered losses of varying degrees, especially in Jiangxi, Hunan and Hubei, which were the most seriously impacted. In June 2003, the CPC Central Committee and the State Council promulgated the Decision on Accelerating Forestry Development , which curbed the phenomenon of the indiscriminate felling of trees and indiscriminate reclamation of forest land, and improved the divergence between regions. The coefficient of variation of the efficiency index of the Northeastern Forest Area was not significant and basically showed a converging trend. This was because the forest resources in the area kept balanced all year round, it was the main timber production base and forest in China, and the provinces in the forest area saw little change in the direction of forestry policy and development n. What differentiated the Southwestern Forest Area from other areas was the high coefficient of variation in the period from 2003 to 2008, indicating a trend of divergence in the efficiency of forestry production in this forest area during this period, and the efficiency differences among areas widened. The reason might be the frequent and severe natural disasters across the country during this period, especially in the serious disaster losses in the Southern Forest Area in 2008. Different efforts of post-disaster forestry construction support among regions led to the greater gap in the efficiency of the Southwestern Forest Area.

13.4.3 β Convergence Test The model of the panel data for setting the β convergence test of the efficiency of forestry production is:

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Year

Northern Forest Area

Northeastern Forest Area

Southwestern Forest Area

Southern Forest Area

Nationwide

Fig. 13.2 σ convergence evolutionary trend nationwide and of the four major forest areas

  ∗ yi T yˆ 1 − e−β(T −t) 1 log log =α+ + μit T −t yit T −t yit

(13.7)

where: i denotes the area; t and T represent the base period and the reporting period, respectively; yit and yiT represent the number of specific indicators in the base period and in the reporting period, respectively; yˆ ∗ is the number of indicators in the steady state; μit denotes the random perturbation term; and β represents the speed of convergence, that is, yit tends to the speed of yˆ ∗ . In this paper, the model is transformed in the actual analysis of the efficiency of forestry production, in the form as follows:

1 ln Mit Mi0 = α + β ln(Mi0 ) + εit T

(13.8)

where M it and M i0 are the Malmquist index of carbon sequestration in the base period and in the reporting period for the i-th area, and T is the time span between the base period and the reporting period. If β < 0, it indicates that there is β convergence in the efficiency change; if β > 0, it indicates that the efficiency change is divergent. According to the formula transformation, λ = −ln(1 + β)/T means the speed of efficiency convergence. Table 13.4 gives the estimated results of the model, from which it can be seen that the β values are significantly positive and the λ convergence speed is negative, indicating that not only throughout the whole country, but also in the four major forest areas, do the regional differences in efficiency growth not gradually disappear in the long term, but there is no β convergence in the four major forest areas. On the one hand, this is because the forest areas are made up of provinces (municipalities and autonomous regions) with similar land conditions, climate and environment, the system of forest rights and industrial structure, and the factor inputs and environmental impacts are also similar, thus leading to difficulty in changing the growth rate of regions within the forest areas, and without a noticeable trend of convergence in

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Table 13.4 Test results of absolute β convergence of the efficiency of forestry production National forest area

Northern forest area

Northeast forest area

Southwest forest area

Southern forest area

β

0.533*** (−10.83)

0.579*** (5.83)

0.459*** (3.1)

0.601*** (4.08)

0.472*** (5.44)

Constant

−0.003 (−0.18)

0.016 (0.46)

−0.006 (-0.24)

0.034 (0.43) −0.014 (−0.52)

R2

0.569

0.58

0.407

0.675

0.505

λ

−0.031

−0.032

−0.027

−0.034

0.018

Note t-statistics in parentheses; *, **, and *** means significance at the significance levels of 10%, 5% and 1%, respectively

the efficiency of forest production. On the other hand, it may be due to the reason that the efficiency of forestry production is closely related to the development of forestry in each region, but forestry is different from agriculture and fishery. Due to the long cycle of forest cultivation, the growth of seedlings to maturity often takes more than ten years or decades. In particular, since the implementation of the system of logging quotas in China, the development of forestry nationwide has tended to grow steadily, and it is difficult to change the disparity among regions in terms of the growth of production efficiency.

13.5 Conclusions and Policy Implications 13.5.1 Main Conclusions In this paper, the total carbon sequestration in 31 provinces of China from 1988 to 2013 was calculated using the method of forest stock expansion, the carbon sequestration is included in the forestry externality output, their efficiency is measured and decomposed using the DEA-Malmquist index method, and the characteristics of the convergence of the efficiency of the regional forestry production are tested on this basis. The main conclusions of this study are: 1.

From 1988 to 2013, the three provinces with the highest mean value of carbon sequestration output in China were Sichuan, Tibet and Heilongjiang, and the sum of the mean value of carbon sequestration in the three provinces accounted for about 43% of the country’s total. The four major forest areas of China, ranking from highest to lowest in terms of the total output value, were the Southwestern (187.069 billion yuan), the Northeastern (133.541 billion yuan), the Southern (84.273 billion yuan), and the Northern (40.735 billion yuan), with the Southwestern Forest Area accounting for about 42% of the national total. This is because this area has an extensive forest area, a maturely developed carbon sequestration forest, and high amount of total forest stock.

13 Analysis of the Efficiency of Forestry Production and Convergence …

2.

3.

4.

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Since the policies and measures such as six major forestry projects and reform of the system of collective forest rights achieved these remarkable effects, the efficiency of forestry production improved nationwide, growing at an annual average speed of 0.6%, with the main contribution from changes in technical efficiency. The mean value of efficiency change increased by 4.7% during the study period due to the improvement of factor input allocation. The forestry industry was under the dual pressure of basic industry and public welfare, so that the improvement in efficiency brought about by the progress in forestry technology cannot be fully reflected. According to the characteristics of China’s distribution of forests, the provinces (municipalities and autonomous regions) are divided into four major forest areas: the Northern Area, the Northeastern Area, the Southwestern and the Southern Areas. From 1988 to 2013, the efficiency of forestry production in the Southwestern and Southern Forest Areas basically showed an inverted U-shaped trend in development. Among the four major forest areas, the Southern Forest Area had the highest mean value of the Malmquist index at 1.036, followed by 1.020 for the Northeastern Forest Area. The Malmquist index was 0.903 and 0.976 for the Southwestern and Northern Forest Areas, respectively, failing to achieve an optimal state of factor input–output. There is no significant decay over time in the coefficient of variation of the Malmquist index between China as a whole and the four major forest areas, and there is no σ convergence among areas. There is absolute β-divergence between the whole country and the four major forest areas, and there is no decrease over time in the efficiency of forest production among areas.

13.5.2 Policy Implications 1.

2.

Forest management should be strengthened to improve the quality of forest resources. The content of carbon sequestration is not only related to the forest area, but also to forest species, forest stand density and disasters such as fires, diseases and insect pests. Therefore, we should continuously raise the level of the management of forest resources, enhance the construction of forestry ecology, improve the structure of forest resources, scientifically prevent the occurrence of forest fires, pest attacks and diseases, reduce natural and man-made damage to the function of the sequestration of forestry carbon, and gradually improve the quality of forest resources. The investment in forestry science and technology should be increased to promote the popularization and application of the technology for the sequestration of forestry carbon. At present, the role of technical progress in improving the efficiency of forestry production has not been fully absorbed, and the way of promoting development by relying on the increase in investment factors such as capital and labor has still not been completely changed. For this reason, we

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should increase the investment in forestry funds, boost the promotion and diffusion of technology for carbon sequestration in forestry development, improve the effective supply according to local conditions, and exert a leading role in technical progress in the development of China’s forestry production. We should make full use of the resource advantages of China’s forest areas and develop the sequestration of forestry carbon in a targeted manner. There are big differences in the forestry development among forest areas in China, and the development of carbon sequestration forests is uneven, with a big gap in the efficiency of forestry production. Resources such as capital, labor and forest land should be reasonably allocated according to the different natural environments among forest areas. In forest areas rich in forest resources such as the northeastern, southwestern and southern forest areas, the tree species with high carbon sequestering should be planted selectively, such as Populus alba, Populus pseudo-cathayana and Pinus koraiensis in the Northeastern Forest Area. For the Southern Forest Area which mainly focuses on economic forest products, we should highlight the resource advantages and promote special forest products. As the main timber supply base in China, the Northeastern Forest Area should strictly implement the system of logging quotas and regulate the timber market. In the Northern Forest Area, which has fewer forest resources, it should mainly focus on forest culture, with an emphasis on the ecological functions of forestry, and introduce the development model of the carbon sequestration forest by combining forest protection, afforestation, harvesting and cultivation.

Acknowledgements Foundation projects: supported by the National Natural Science Foundation of China Key Project (71333006); Special Funds for Basic Research Expenses in Central Universities Supported Project (2013RW034); Wuhan Soft Science Research Program (2015040606010256); Innovative Team Incubation Project of Huazhong Agricultural University (2013PY042); Excellent Young Talent Development Program of Humanities and Social Sciences in Huazhong Agricultural University.