亚开行-将自然资本评估纳入政策和投资决策：中国经验

NO.305

JUNE2024

ADBBRIEFS

KEYPOINTS

•Seriousdegradation

ofecosystemassets

andserviceshasledto

thedevelopmentofan

environmentalrelated

indicatorfornational

accountingalongsidegrossdomesticproduct.

•Naturalcapitalaccounting(NCA)usesbiophysical

andmonetarymetricsto

measureandreportthe

statusandeconomicvalueofnaturalresourcesand

ecosystemservices.

•ThePeople’sRepublicofChina(PRC)hasalong

historyofdeveloping

andpromotingthegross

ecosystemproduct(GEP)indicator,adaptingNCA

standardstofititscontext.

•GEPpilotprojectshave

beenconductedinmultipleprovinces,butitspolicy

andpracticalimplicationsremainlimited.

•Recommendationsare

providedbasedonthePRC’sexperienceandlessons

fromcountrieswithmoreadvancedNCApractices.

ISBN978-92-9270-788-0(print)ISBN978-92-9270-789-7(PDF)

ISSN2071-7202(print)ISSN2218-2675(PDF)

PublicationStockNo.BRF240345-2

DOI:

/10.22617/BRF240345-2

IntegratingNaturalCapitalValuationintoPolicyandInvestmentDecisions:LessonsfromthePeople’sRepublic

ofChina

LeLan

EnvironmentalEconomist

Agriculture,Food,Nature,and

RuralDevelopmentSectorOffice(SG-AFNR)

AsianDevelopmentBank(ADB)

SilviaCardascia

WaterResourcesSpecialistSG-AFNR,ADB

AuShionYee

PrincipalWaterResourcesSpecialistSG-AFNR,ADB

ChristianFischer

SG-AFNRConsultant,ADB

ThomasPanella

Director,SG-AFNRADB

GLOBALDEGRADATIONOFECOSYSTEMSANDTHERISEOFNATURALCAPITALACCOUNTING

Fordecades,ecologistsandenvironmentalscientistshaveraisedconcernsaboutthe

lossanddegradationofecosystemassetsasaresultofeconomicgrowth.Atthesametime,economistshaveincreasinglyputeffortsintomeasuringthemonetaryvalueof

ecosystemgoodsandservicestoemphasizetheeconomiccontributionofecosystemstohumanwell-being.1

TheMillenniumEcosystemAssessment2005hasintensifiedthewidespread

recognitionamonggovernmentsofthefundamentalrolethatnaturalresources

andbiodiversityplayinoursocietyandeconomicgrowth.2Thereisconsensusthatup-to-dateinformationonthestateanduseofglobalecosystems,aswellastheir

Notes:Inthispublication,“$”referstoUnitedStatesdollars.ADBrecognizes“China”asthePeople’sRepublicofChina.

Theauthorsaregratefulforinputsviaprojectandtechnicalassistancework,cases,discussion,andpeerreviewfrom,amongothersNarayanIyer,MarkBezuijen,DongmeiGuo,andYuFang.

1R.Costanzaetal.1997.TheValueoftheWorld’sEcosystemServicesandNaturalCapital.Nature.

387.pp.253–260.

2MillenniumEcosystemAssessment.

OverviewoftheMillenniumEcosystemAssessment

.

2

ADBBRIEFSNO.305

QuaternaryIndustry

forEcologicalProducts

2021

Figure1:GrossEcosystemProductAccountinginthePeople’sRepublicofChina

Equivalentfactorsmethod

Ecologicaldeterioration

EnvironmentalBenefit

forecologicalservice

costwithGEPincluded

andGEPAccounting

evaluationareproposed

inCEEA

(GreenGDP2.0)

2003

2008

2015

2017

GrossEcologicalandGrossEconomicProduction

Accounting(GreenGDP3.0)

2004

ChinaSystemof

Environmentaland

EconomicAccounting

2013

GEPaccounting

frameworkproposed

(CEEA)(GreenGDP1.0)

CEEA=ChinaSystemofEnvironmentalandEconomicAccounting,GDP=grossdomesticproduct,GEP=grossecosystemproduct.Source:Authors’elaborationbasedongovernment’sdocumentsandstakeholders’consultation.

economicvalues,isessentialtomitigatingandeventually

recoveringthedegradationofnaturalresources.Thishasgivenrisetotheconceptof“naturalcapital,”whichrefersto“thestockof

renewableandnon-renewableresourcesthatcombinetoyieldaflowofbenefitstopeople.”3

Theneedtointegratenaturalcapitalassetsintothenational

accountingsystemwasfirstintroducedintheUnitedNations’

SustainableDevelopmentGoalscallingforthedevelopmentof“measurementsofprogressonsustainabledevelopmentthat

complementGrossDomesticProduct(GDP).”4Thisemphasizesthatnaturalcapitalneedstobeconsideredasanassetand

measuredalongwithfinancial,human,andsocialcapital—allareinterconnectedandcannotbeseparatedfromoneanother.

Naturalcapitalaccounting(NCA)offersasystematicapproach

thatquantifiestheeconomicvalueofnaturalresourcestomeasureandreportstocksandconditionsofnaturalcapitalforabroader

pictureofcountries’wealthanddevelopmentprogresscomparedtostandardmeasuressuchasGDP.NCAcanincludebothbiophysicalandmonetarymetricsusingastandardizedandreplicableapproach.Thereareseveralapproachestomeasuringthevalueofnatural

capital.Toensurecomparabilityamongdifferentapproaches

toNCAandacrosscountriesandtime,in2012,theSystemof

Environmental-EconomicAccounting(SEEA)wasadoptedby

theUnitedNationsStatisticalCommission.NCAcanprovidethe

foundationfordialogueacrosssectorsabouttheroleofnatural

capital.Assuch,itcaninformthedesignofpoliciesandinvestments,andenableevaluationoftheirimpacts.

AlthoughtheconceptofNCAisrelativelynew,itsrelevanceforpolicymakingandeconomicdevelopmentplanninghasbeen

increasinglyrecognizedoverthepastfewyears.ThePeople’sRepublicofChina(PRC)pilotsNCApractices,whilegradually

mainstreamingitintopolicies,decisions,andinvestments.ThisbriefpresentsthePRC’sprogressinNCAandrespectivelessonslearned.ItofferspossibleavenuesforimprovingtheconceptandintegratingitintopolicydecisionsforbettermanagementofnaturalresourcesandsustainabledevelopmentforthePRC.LessonscanbeusefulforothercountriesintheAsiaandPacificregion.

NATURALCAPITALACCOUNTINGPRACTICESINTHEPRC

EstablishmentandDevelopmentofNaturalCapitalAccountinginthePRC

TheGovernmentofthePRChasshowninterestinmonitoringandmeasuringecosystemgoodsandservicessince2004whenthe

firstversionofgreenGDPwasintroducedbytheEnvironmental

PlanningInstituteoftheMinistryofEcologyandEnvironment.

ThegreenGDPwasdevelopedbasedontheSEEAframeworkto

holisticallyreflect,map,andquantifytheenvironmentalcostof

growthovertime.Sincethen,themechanismforrealizingthevalueofecosystemserviceshasbeengraduallyimproved.If,inthefirst

version,onlyenvironmentaldegradationcostswereaddedtotheGDP,thesecondandthethirdversionshaveseenothervaluesofecosystemgoodsandservicesbeincluded.Figure1presentstheimportantpolicydocumentssupportingthedevelopmentofgrossecosystemproduct(GEP)overtime.

TheintroductionofgreenGDPhasinspiredmanyempirical

studiesonenvironmental-economicaccountingincludingthedevelopmentoftechnicalframeworkforecosystemaccountingafter2006.In2013,thegovernmentpromotednaturalcapitalassessmentandvaluationtolocalgovernmentsbyissuinga

keypolicydecisionthatdoesnotrelysolelyonGDPandothereconomicdevelopmentindicatorstoevaluatetheperformance

3NaturalCapitalCoalition.2016.

NaturalCapitalProtocol

.

4UnitedNations.DepartmentofEconomicandSocialAffairs.StatisticsDivision.SDGIndicators.

SDGTarget17.19

.

3

ofadministrators.Thishasgivenrisetoincreasedresearchandstudiesonecologicalmonitoringandassessment.

Thefirstnationalecosystemassessmentwascompletedin2014,followedbytheofficiallaunchofthePRC’sNCAactivitiesin

2015.Thecomprehensivereportreleasedin2016usednumerousindicatorsfromthenationalecosystemassessmenttoprovide

avaluableassessmentonthechangesofecologicalconditionsandecosystemservicesofthecountryover10years(2000–2010).

In2017,theconceptofGEPwasproposedandhasbeenadoptedasanindicatortomeasurethetotalsocioeconomicandecologicalvalueofthePRC.Inthesameyear,theEuropeanUnion-funded

project,NaturalCapitalAccountingandValuationofEcosystemServices,waslaunchedtopilottheGEPframeworkforsix

ecosystemsinGuangxiandGuizhouincludingforests,farmlands,grasslands,freshwater,oceans,andcities.5Atthesametime,

ecologicalassetsaccounting(EAA)wasproposedtoassessthestockvaluesofkeycomponentsofnaturalcapital.

Astandardizedsystemandtechnicalguidanceformainstreaming

NCAwasproposedin2019bytheChinaCouncilforInternationalCooperationandDevelopmenttoacceleratethedevelopmentandprovideabasisfordevelopingecologicalproductsandservices.6In2021,thereleaseofthegovernmentof“OpinionsonEstablishing

andImprovingtheMechanismforRealizingtheValueofEcologicalProducts”helpedmainstreamNCAatalocalgovernmentlevel.7

Attheinitialstage,theprioritywastomeasurethephysicalquantityofecologicalproducts.Inthesecondphase,theemphasiswas

switchedtofacilitatingtheintegrationofresultsofecological

productsaccountingintogovernmentdecision-making;monitoringandevaluation;businessdevelopmentandfinancing;andtradingofecologicalresources,rights,andinterests.

GrossEcosystemProduct

TheGEPhasbeenproposedtoreflectameasureoftheaggregatemonetaryvalueofecosystemgoodsandservicesinaspecific

regionforagivenaccountingperiod.8GEPfollowsSEEA’sdefinitionofaccountingvaluesbutfocusesonecosystemservicesflow

accounts(physicalandmonetary)(accounts3and4inSEEAframework)(Figure2).EAAcomplementsGEPbyassessing

thestocksandconditionsofecologicalassets(accounts1and2inSEEAframework).9EAAsupportsthecalculationofGEPbyprovidingunderlyinginformationofthequantificationof

ecosystemservices.

IntegratingNaturalCapitalValuationintoPolicyandInvestmentDecisions

Figure2:GrossEcosystemProductFramework

(A)

(B)GEP

Channel

Indexof

Ecosystem

Methods

(C)

Ecosystem

regulationservices

Ecosystemcultureservices

+

+

HP

WR

FunctionQuantity

Accounting

Statisticalanalysis

ValueAccounting

Marketvalue

method

AP

EE

FP

FP

CE

FunctionQuantity

Accounting

Statistical

analysis

ValueAccounting

Travelexpense

method,

Hedonicexpense

method

SR

LT

ECOSYSTEMMANAGEMENT

Protection-Restoration-Construction

ECOSYSTEMMANAGEMENT

Pattern-Structure-Process-Evolution

▲

Functionquantity

Value

accounting

Determineprice

Ecosystemmaterialproducts

GIS-RS-INVESTIGATION-EXPERIMENT

SR CE CE

FunctionQuantityAccounting

EcosystemMonitoring

ValueAccounting

Alternativecost

method,

Shadow

engineering

method

FR AR PC

WR SP WT

DemonstrationArea

GEPAccountingSearch

scalescale

Provisionalscale

MunicipalCountry

reserveregions

Nationalpark

EcologicalOther

AP=agriculturalproducts,AR=airregulation,CE=culturaleducation,EE=ecologicalenergy,FP=forestproducts,FR=floodregulation,

GEP=grossecosystemproduct,GIS=geographicinformationsystem,HP=husbandryproducts,LT=leisuretourism,PC=pestcontrol,

RS=remotesensing,SP=sandstormprevention,SR=scientificresearch,SR=soilretention,WR=waterresources,WT=waterretention.

Source:Yangetal.2023.ResearchandApplicationofGEP:China’s

ExperienceinNaturalCapitalAccounting.

FrontiersEnvironmentalScience

,25January.

5SEEA.

NaturalCapitalAccountingandValuationofEcosystemServicesProject

.

6ChinaCouncilforInternationalCooperationandDevelopment.2019.

EcologicalCompensationandGreenDevelopmentInstitutionalReformintheYangtzeRiver

EconomicBelt

.ResearchReport.

7GovernmentofthePRC,

InstrumentalitiesoftheStateCouncil,GeneralOfficeoftheStateCouncil.2021.OpinionsonEstablishingandImprovingtheMechanism

forRealizingtheValueofEcologicalProducts

.April.

8Z.Ouyangetal.2020.UsingGEPtoValueNatureinDecision-Making.ProceedingsoftheNationalAcademyofSciences.117(25).pp.14593–14601.

9ThisbrieffocusesonGEPanddoesnotdiscussEAA.

4

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TheSEEAframeworkclassifiesecosystemservicesintothree

categories:(i)provisioningservices,(ii)regulatingservices,and

(iii)culturalservices.10AlthoughtheGEPframeworkcoversall

threeservices,inpractice,itfocusesonthefirsttwo.Lessworkhasbeendonetoaccountfortheculturalservices.

Ingeneral,therearethreemainstepsinvolvedinGEPaccountingmethods:(i)accountingofbiophysicalvaluesofecosystemgoodsandservices,(ii)pricingofecosystemgoodsandservices,and

(iii)aggregatingtotaleconomicvaluesofecosystemgoodsandservices.Accountingindicatorsincludeagriculturalproducts,

forestryproducts,husbandryproducts,fisheryproducts,water

resources,ecologicalenergy,waterretention,soilretention,floodregulation,sandstormprevention,carbonsequestration,air

purification,waterpurification,climateregulation,pestcontrol,leisuretourism,andculturaleducation.ScientificresearchshowsthedemonstrationapplicationofGEPaccountingindifferent

ecologicalfunctionalareasandattheprovincial,municipal,and

countylevels.Box1showsanexampleofstep-by-stepcalculationsforfourpilotedcasesinthePRC.

Step1:Accountingofbiophysicalvaluesofecosystemgoodsandservices.Inthisstep,physicalquantitiesofthreetypesofecosystemserviceswithinacertaintimeneedtobeestimated.

Forprovisioningservices,physicalquantities,suchasgrain

productionquantities,canbesourcedfromthePRC’sstatistics.Forregulatingservices,monitoringdataonhydrology(e.g.,watervolume),grassland,andwetlandcanprovideaportionofthe

estimatesofphysicalquantitiesofregulatingservicesthatarenotavailableinthecurrentmonitoringsystemisestimatedthrough

integratedmodelingsystemstopredicttheflowofecosystem

servicesphysicalquantities.Someexamplesofmodelingconsistofmodelingrelatedtoplantbiomass,includingoxygenrelease

andsulfurdioxideabsorption,totalnitrogenreduction,and

transpirationandevaporationforenergyconsumptionofplant

transpirationandwatersurfaceevaporation.Forculturalservices,accountingofphysicalquantitiescoversnaturallandscape

recreationthatcouldbemeasuredbynumberoftourists.Becausedifferentecosystemservicesquantitieshavetheirownunitsof

measurement,itisnecessarytoconvertthemintoasingleunit

toevaluatethetotalecosystemservicesofanareaorcountry

withinaperiodoftime.Pricingofecosystemservicesisthereforeintroducedinthesecondsteptoconvertecosystemservices

physicalquantitiesintomonetaryunitvalue.

Step2:Pricingofecosystemgoodsandservices.Various

methodsareusedtoassignmonetaryvaluetoecosystemservicesdependingonthetypeofecosystemservices.GEPframeworks

commonlyspecifythreemainapproaches:

(i)Directmarketmethodsuseactualpricesinmarketstoassignmonetaryvaluestogoodsandservicesthataretradedin

domesticandinternationalmarkets(e.g.,priceoftimber,priceofagriculturalproducts).

(ii)Surrogatemarketmethods,orrevealedpreferencemethods,areusedtoassignmonetaryvaluefornon-marketedgoodsandservicesbyestimating“shadowprices”througha

willingnesstopay(WTP)andconsumersurplusdatafrom

therelevantmarketedgoods.11Examplesofthesemethods

includehedonicpricing,travelcostmethod,avoideddamagecost,andreplacementcost.

(iii)Simulatedmarketmethods,alsoknownasstatedpreferenceorhypotheticalmarketmethods,employcontingent

valuationand/orchoiceexperimenttoassessconsumers’WTPdirectlytothenon-marketedecosystemservicesto

estimateitseconomicvalue.12

Thefirstapproachismainlyusedforprovisioningserviceswhilethesecondandthirdapproachesareusedforregulatingservicesand

culturalservicesgiventhattheseservicesareusuallynotassignedamarketpricevalue.

Step3:AggregatingtotaleconomicvalueofecosystemservicestoderiveGEP.Thetotaleconomicvalueofecosystemservicesisestimatedbymultiplyingeachtypeofecosystemservicewithitsprice.13TheGEPofaspecificcountryorregionisthencalculatedasthesumofthetotaleconomicvalueofallthreefinalecosystemservicesincludingtheeconomicvalueofprovisioningservices

(EPS),theeconomicvalueofregulatingservices(ERS),andtheeconomicvalueofculturalservices(ECS)14asfollows:

GEP=EPS+ERS+ECS

GrossEcosystemProductPracticesandImplicationsinthePRC

Theeffortsofthegovernment,alongwiththesupportof

developmentpartnershaveincreasedGEPapplicationsacrossthecountry.TheexpansionofGEPpracticesisalsoaresultofmultiplepilotworksandguidelinesatbothnationalandprovinciallevels.

10Provisioningservicesrefertodirectusevalues(e.g.,agriculturalproductsandforestproducts).Regulatingservicesrefertoindirectusevaluesresultingfromthecapacityofecosystemstoregulateclimate,hydrologic,biochemical,andbiologicalcycle.Culturalservicesrefertonon-usevaluesthataregeneratedthrough

recreation,knowledge,relaxation,andspiritualreflectionservicesofecosystems.

11Forexample,housepricesareusedtoestimatethevalueofwetlands.Theassumptionisthatthepriceofahouseincreaseswhenthedistancetothewetlanddecreases.

12Forinstance,thevalueofrecreationalservicesderivedfrombirdprotectioncanbeestimatedusingstatedpreferenceapproaches.Asurveycanbecraftedtooutlinethevaluationscenarios,andrespondentsaredirectlypromptedtostatetheirWTPforaspecificscenario,asseenincontingentvaluation,ortoselecttheirpreferredscenariosinchoiceexperiments.

13GEPcurrentlyfocusesonfinalecosystemservicesthatareusedbyeconomicunits(households,businesses),andexcludeintermediateorsupportecosystemservicesusedbyecosystemassets.

14AcronymsandterminologiesusedherearethosecommonlyusedinecosystemvaluationandNCAbutnotnecessarilyusedintheoriginalpaperofGEPmethodologiesforthePRC.

5

IntegratingNaturalCapitalValuationintoPolicyandInvestmentDecisions

Box1:Step-by-StepGrossEcosystemProductAccountinginQinghaiProvince,QiandongnanAutonomousPrefecture,PingbianCounty,andEshanCounty

Step1:Accountingofbiophysicalvaluesofecosystemgoods

andservices.Atthisstep,indicatorsforecosystemservicesinthefoursitesweredevelopedanddataonphysicalquantitiesweregathered.AllaccountingindicatorsforprovisioningservicesandregulatingservicesmentionedinFigure2wereincluded.Forculturalservices,onlythe

recreationalserviceindicatorfromnaturallandscapewasaccounted.Dataforthebiophysicalvaluewereobtainedfromvarioussources

dependingonthetypesofservices.Forexample,dataforprovisioningserviceswereobtainedfromlocalstatisticalrecordsonquantity

produced.Forregulatingservices,measuringthebiophysicalquantitiesisnotasdirectasforprovisioningservices.Thebiophysicalvaluefor

regulatingserviceswasobtainedfromdifferentmodelingworksuchaswaterbalance,soillossequation,plantandwaterpurification

model,carbonmassbalancemodel,andevapotranspirationmodel.Monitoringandhydrologicdatawereusedforfloodmitigation

indicators.Forculturalservices,dataonthenumberoftouristswasusedasthebiophysicalindicator.Alldatawerecollectedin2015.

Step2:Pricingofecosystemgoodsandservices.Thisstepinvolvesmonetizingbiophysicalquantitiesofecosystemservicesthatwere

selectedfortheaccounting.Themonetaryvaluationofprovisioning

serviceswasbasedondirectmarketmethod:thepriceoftheproductsrecordedinstatisticaldataofthelocalgovernment.Incontrast,

surrogatedmarketmethods,specificallyreplacementcostand

shadowcost,wereusedforalmostallregulatingservices.Forexample,thecostofreservoirconstructionwasusedtoquantifythemonetaryvalueofwaterretention.Thecostofwaterconservancyfacilities

wasusedforfloodmitigation.Finally,therecreationalservicewas

monetizedbyasimplifiedtravelcostmethodwherethespendingoftouristswasused.

Step3:Aggregatingtotaleconomicvalueofecosystemservicestoderivegrossecosystemproducts(GEP).TheGEPvaluewasfirstaggregatedforeachecosystemserviceandthetotalGEP

valueofthefourcasestudieswassummedbyaddingtheGEP

ofeachecosystemservice.ThetotalGEPvaluein2015was

highestinQinghaiProvince,atCNY1,714.8billion.Intermsof

ecosystemservices,regulatingservicesaccountedforthehighestvalueinallfourcases.Theregulatingserviceswereestimatedat

CNY1,595billioninQinghai(93%oftotalGEP);CNY270.5billioninQiandongnan(65%);CNY15.4billioninPingbian(85%);and

CNY1.8billioninEshan(75%).

Source:AsianDevelopmentBank.2020.DevelopingGrossEcosystemProductAccountingforEco-Compensation.Consultants’report(TA9040-PRC).

AnexampleofaguidelineofNCAandecosystemservicesassessmentforHenanProvinceisprovidedinBox2.

Until2020,GEPhadbeenappliedinmorethan150countiesandinvolvedalmost300millionstakeholders,includingbeneficiaries.Usingpilotedcounties’levelGEPresults,thegovernment’sgoalistodevelopaplatformthatpromotesthedigitalizationofGEPaccounting,andanintegrateddatabasethatcontainsspatialdataofecologicalproductsnationwide.

Arecentstudyreportsthatamongthethreeecosystemservices,

ERSsandaccountforthehighestproportion(74%)oftotalGEP

valuesandareconcentratedmoreinthenorthwestareathan

thesouthwest.15Thisindicatesthepotentialdevelopmentof

thenorthwestgiventhatrigorousecosystemservicescontribute

significantlytoeconomicdevelopment.TheculturalservicesvalueappearstobethelowestvalueofthetotalGEP.Thisisbecause

ECSisoftenunderestimatedorignoredinecosystemservices

studiesalthoughthisvalueplaysanimportantroleincapturing

andcomparingthepotentialsocialandculturalvalueofecosystemservicesindecision-makingprocesses.

ResultsofGEPaccountinghavebeenproposedtobeusedin

severalpolicysettingsacrossadministrationlevels.Forexample,atthenationallevel,GEPvaluescanbeusedforoveralleconomic

developmentplanning,policyguidancefornationalregulations,

andtransferringpaymentsamongprovincesandwatersheds.

Attheprovinciallevel,itcanbeusedforguidingnaturalcapital

investment,land-useplanning,designingeco-compensation,

andecologicalvalueevaluation.Atthemunicipallevel,itcanbe

integratedwithgovernmentprocurementwhileatthecountylevel,intoecologicalproductdevelopment,infrastructureplanning,andwatermanagement.

AmongvariouspotentialGEPimplications,anumberofinitiativeshavebeentakentointegrateGEPresultsintothedesignof

ecologicalcompensationpolicies(Box3)andestablishing

ecologicalproductvalue(Box4).GEPprovidesabasisforsettingupeconomicandfinancialincentivesforupstream–downstreameco-compensationpaymentschemes,bothvertically(within

aprovinceamongcounties)orhorizontally(acrossprovinces

thathavetransboundaryrivers).Thecurrenteco-compensationschemesinthePRCdonotconsiderthefullvalueofecosystem

servicesbutusuallyonlyaccountforwaterqualityparametersinacarryingwatershedatacross-riversection,resultinginlower

incentivesforecologicalconservation.16ThetotalvalueofGEP

accountingforwater,andwater-dependentecosystemscan

beusedtosetupcompensationstandardssuchasmonetary

compensationamountperunitofERSimprovementforupstream

beneficiaries.Itcanalsobeusedtoformulateecological

15H.Yangetal.2023.ResearchandApplicationofGEP:China’sExperienceinNaturalCapitalAccounting.FrontiersinEnvironmentalScience.11(75).

16M.Fanetal.2022.

InnovativeFinanceMechanismstoProtectWaterResourcesintheXin’anRiverBasin

.ADBBriefsNo.230.AsianDevelopmentBank.

6

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Box2:AccountingforNaturalCapitalandEcosystemServicesintheYellowRiverBasinofHenanProvince

HenanProvinceislocatedwithintheYellowRiverBasin.Theprovinceishometowetlandandforestecosystemswithmigratorywaterbirdsandrare,threatened,andrestricted-rangespeciesoffloraandfauna.Althoughtheseecosystemsprovideessentiallifefunctioningvalues,theyareunderthreatofdegradationandthefloraandfaunaspeciesdependentonthemareatriskoflosingtheirhabitat.Thisisthe

resultoflong-termeconomicdevelopment,includingagricultureandindustrialexpansion,aswellasclimatechange.

Theprotectionandrestorationofdegradedecosystemsin

theYellowRiverBasinisoneoftheprioritiesofthePeople’s

RepublicofChina(PRC).Toachievethis,policyandplanning

measuresareneededattheprovincialandbasinlevels.TheAsianDevelopmentBank(ADB)issupportingtheGovernmentofthe

PRCtoachievethisgoalthroughatechnicalassistanceprojectonpolicyresearchandatechnicalstudyonecologicalrestorationandbiodiversityconservationinHenanprovince.Oneoftheproject

deliverablesfocusesonevaluatingnaturalcapitalandecosystemservicesvaluesinbothquantitativeandqualitativemeasurestoestablishthebaselinethatcanbeusedtodevelopactionplansandpoliciesforbiodiversityconservationinthearea.Theresults

showthatthetotalvalueofecosystemservicesprovidedby

forests,wetlands,farmlands,andwaterwaysinthestudyareawasaboutCNY234billion(equivalentto$33billion)in2020.This

valueis40%higherthanthatoftheyear2000.Thetotalvalue

ofregulatingserviceswasthehighest,followedbyprovisioning

servicesandculturalservices,whichonlyaccountedfor1.1%ofthetotalecosystemservicesvalue.Thefindingsshowtheeconomic

importanceoftheecosystemservicesinthearea,whichwillbe

usedasthebasisforallocatingfinancialresourcestoscaleup

protectionandrestorationactivities.Thefindingsalsosuggestarelationbetweentheincreaseofecosystemservicevaluesand

theimplementationofconservationandrestorationpoliciesfrom

2000to2020.Itisalsoimportanttonotethatculturalserviceshavearelativelylowproportionofthetotalecosystemservicesvalues.

Thisindicatesthattheregionhasnotfullycapturedthevaluesoftheseecosystemservicesandlandscapes.

Aprovincialguidelineforaccountingnaturalcapitalandecosystem

servicesforpolicymakersh