Research and application of GEP: China’s experience in natural capital accounting
Haijiang Yang
Xiaohua Gou
Weijing Ma
Bing Xue- 1Key Laboratory of Western China’s Environmental Systems with the Ministry of Education, College of Earth and Environmental Sciences, Lanzhou University, Lanzhou, China
- 2Gansu Liancheng Forest Ecosystem Field Observation and Research Station, Lanzhou, China
- 3Institute of Applied Ecology, Chinese Academy of Sciences, Shenyang, China
In 2013, for raising the awareness of policymakers and researchers on the economic value of ecosystem services, GEP (Gross Ecosystem Product) was proposed by Chinese scholars. As a new attempt at ecosystem services evaluation, GEP has been widely accepted in China and is often used to reveal the effectiveness of regional ecological protection and the relationship between humans and nature. However, there is currently a lack of a systematic review of GEP research. In this study, we found that: 1) GEP can reflect the overall situation of ecological environment and service quality, and help decision-makers and managers formulate and implement sustainable development strategies and ecological protection policies. 2) The contradiction between the depletion of global ecosystem capital and the development of people’s livelihood continues to intensify. About 68.7% of developing countries are facing a “low-low development (low GEP and low GDP)” model. 3) We have constructed the path model of the GEP working system and the path model of ecological protection compensation mechanism in China. The GEP accounting system of “from point to area, from top to bottom”, the parallel evaluation strategy of GDP and GEP and the comprehensive ecological compensation system of “vertical and horizontal combination” implemented can be popularized to countries all over the world.
1 Introduction
The global ecosystem is huge, complex, and diverse. While maintaining global biodiversity, it supports about 7.6 billion people and provides services vital to human wellbeing, health, livelihood, and survival (Costanza et al., 1997; Millennium Ecosystem Assessment Panel, 2005; Nelson et al., 2009; TEEB Foundations, 2010; Maes et al., 2016). However, under the background of extensive global climate change and the continuous impact of human activities (Chen et al., 2021; Cobb et al., 2021; Ellis et al., 2021; Grant et al., 2021; Ouyang et al., 2021; Yang et al., 2021), the global ecosystem degradation has intensified, and 60% of ecosystems are degraded, more than 30% of natural freshwater disappears, and the forest is reduced by 10 million ha each year (Havsen et al., 2013; Andrew and Erin, 2019). The global ecosystem is still facing the weakening of ecosystem services and the depletion of natural resources in the future, which seriously threatens the survival of mankind.
How to increase humanity’s extensive attention to the importance and sustainability of global ecosystems? At present, the common method in the scientific community is to calculate the value of ecosystem services, that is, to evaluate the benefits of the ecosystem in the form of monetization. Assessing global ecosystem services can help people grasp the overall status of ecosystem operations, and reflect the quality of ecological environmental services, and understand the relationship between ecosystems and human wellbeing. Furthermore to help decision-makers implement more scientific and reasonable sustainable development strategies and ecological protection policies (de Groot et al., 2012; Costanza et al., 2014; Ouyang et al., 2016).
Ouyang et al. believe that GEP, as an indicator of ecosystem contribution to the economy, can provide a basis for carrying out the research on the realistic mechanism of ecological products and transforming the value of ecological products into economic benefits (Ouyang et al., 2016; Ouyang et al., 2021; Yang et al., 2021). The Chinese government has recognized the importance of protecting and restoring ecosystem assets. GEP accounting is being widely carried out to achieve comprehensive sustainable development. At present, GEP has been incorporated into the decision-making of coordinated development of ecology and economy, eco-environmental compensation mechanism and government eco-environmental performance evaluation (Ouyang and Jin, 2017).
Although the research on GEP has become one of the research hotspots in the academic circle, there is still a lack of systematic induction and sorting of GEP’s theory, method, mechanism, impact, application and other aspects. Therefore, this study will systematically describe the development and application of GEP in the form of cases, aiming to provide China’s experience for the sustainable development of global ecology and economy.
Based on this, we 1) introduce the background and development trend of GEP accounting, 2)summarize the completed and ongoing GEP accounting cases in China, 3) and try to explain the necessity of global GEP accounting, 4) finally, we attempt to build the working system path model of GEP accounting and ecological protection compensation mechanism path model with Chinese characteristics.
2 Materials
2.1 Ecosystem change data
The main ecosystem change data sourced from the World Bank (WB) (https://data.worldbank.org/accessed 1 October 2021) and the Food and Agriculture Organization of the United Nations (FAO) (https://www.fao.org/accessed 10 October 2021).
2.2 GEP literature retrieval data
We researched articles published between 2000 and 2020, which were collected using selective keywords under “TOPIC” in the database of ISI Web of Science Core Collection. We searched the keywords (ecosystem service, GEP accounting). As needed, we selected 100 articles for detailed review, and finally selected 50 of them to review the cases of global ecosystem GEP accounting. The research area of these articles includes different countries in the world, with regional representation, and the research content includes the main terrestrial ecosystems. At the same time, the selected papers also have high citation rate and influence. In order to make the data and cases more representative and typical, the literatures selected by us mainly consider three aspects: first, the journals with an impact factor greater than 5; second, the regional distribution of the study; third, the country where the author is located.
2.3 GDP data
GDP data sourced from the World Bank (WB) (https://data.worldbank.org/accessed1October 2021), the Food and Agriculture Organization of the United Nations (FAO) (https://www.fao.org/accessed 10 October 2021) and United Nations Statistics Division (UNSD) (https://unstats.un.org/accessed 1 October 2021).
2.4 Remote sensing data of China
Sourced from the Resource and Environmental Science Data Center of the Chinese Academy of Sciences (http://www.resdc.cn/accessed on 1 May 2021). It is a remote sensing of China’s land use status in 2015 (Landsat 8), which is 1 km grid data generated through vector data rasterization on the basis of 1:100,000 scale remote sensing monitoring data of land use status. According to the research needs, the land use types are divided into cultivated land, forest land, grassland, water area, urban land and bare land.
2.5 Global ecosystem change data
The main ecosystem change data sourced from the World Bank (WB) (https://data.worldbank.org/accessed 1 October 2021) and the Food and Agriculture Organization of the United Nations (FAO) (https://www.fao. org/accessed 10 October 2021). Other data: basic global geographic data sourced from the Natural Earth (http://www.naturalearthdata.com/accessed 25 October 2021).
3 Results
3.1 GEP accounting—a new accounting method of ecosystem service value
Based on the research on ecosystem services. In 2013, Ouyang and Zhu first proposed the concept of the gross ecosystem product (GEP) (Jiang et al., 2021), which is defined as the sum of the final product and service value provided by the ecosystem for human wellbeing and social development in a specific time, mainly including the ecosystem material product value, regulation service value and cultural service value (Ouyang et al., 2021). Ouyang et al. believed that the gross domestic product (GDP) did not fully reflect the contribution of nature to economic activities and human wellbeing, so they developed a measurement standard for the GEP, and at the same time constructed an indicator system and accounting method (Ouyang et al., 2021).
Through GEP accounting, we can better understand the ecological relationship between regions and understand the value of ecological product supply services and ecological regulation services of each ecosystem. At the same time, GEP accounting can better promote the virtuous cycle of ecosystem protection, restoration and management (Chen et al., 2009; Ouyang et al., 2021), (Figure 2C), (Figure 3A).
GEP is the sum of the value of ecosystem products, regulation services, and cultural services (Ouyang et al., 2021) (Figure 1). Generally, ecosystem material product value is called direct use value, while regulation service value and cultural service value are called indirect use value. According to the method of ecosystem service function evaluation, GEP can be calculated from two perspectives: ecological function and ecological economic value. The quantity of ecological function can be expressed by the quantity of ecological products and ecological services, such as grain yield, carbon sequestration, number of tourists, etc. its advantage is intuitive. However, due to different units of measurement, it is difficult to sum the output of different ecological products and services. It is difficult to obtain the GEP of a region and a country in a period of time only by ecological function indicators. Therefore, it is necessary to use prices to convert the output of different ecosystem products and services into currency, and finally get GEP (Ouyang et al., 2021).
FIGURE 1. Based on the GEP accounting theory and method proposed by (Ouyang et al., 2021), we constructed a framework schematic diagram of the GEP accounting. Note: shows the idea of calculating the gross value of ecosystem production. (A–C) shows the data channels (Pan et al., 2004; Zhu et al., 2007; Ouyang et al., 2015), indicators (Ouyang et al., 2021), methods of GEP accounting (OECD, 1996; Xu et al., 2003; Dong et al., 2017; Ouyang et al., 2020). Accounting indicators include: AP: Agriculture products, FP: Forestry products, HP: Husbandry products, FP: Fishery products, WR: Water resource, EE: Ecological energy; WR: Water retention, SR: Soil retention, FR: Flood regulation, SP: Sandstorm prevention, CS: Carbon sequestration, AP: Air purification, WP: Water purification, CR: Climate regulation, PC: Pest control; LT: Leisure tourism, CE: Cultural education, SR: Scientific research. shows the demonstration application of GEP accounting in different ecological functional areas and at the provincial, municipal and county levels.
3.2 GEP accounting in China
3.2.1 The imbalance between China’s ecological capital protection and regional development is still prominent
In the field of coordination between environment and human development, China has made a lot of efforts and made great progress, with highly innovative and far-reaching policies, in terms of goals, scale, and duration (Daily et al., 2013). Since 1992, the construction of ecological civilization in China has entered the stage of sustainable development. From environmental protection to sustainable development, China has made important progress in building an ecological civilization. From 1997 to 2017, a series of ecological construction projects were carried out continuously (Liu et al., 2008; Li et al., 2011; Wu et al., 2019; Zhang et al., 2020), the area of forest, grassland and wetland ecosystem was effectively increased, and the area of the bare land ecosystem was significantly reduced (Figure 2). Overall, China has huge ecosystem reserves and GEP development potential (Figure 2).
FIGURE 2. Distribution and changes of main ecosystem types in China. Note: the main ecosystem change data sourced from the World Bank (WB) (https://data.worldbank.org/ accessed 1 October 2021) and the Food and Agriculture Organization of the United Nations (FAO) (https://www.fao. org/accessed 10 October 2021). LUCC data sourced from the Resource and Environmental Science Data Center of the Chinese Academy of Sciences (http://www.resdc.cn/ accessed on 1 May 2021).
However, with the development of economy and the acceleration of urbanization, the ecological environment in many regions of China has deteriorated (Ouyang et al., 2016), and still faces the problem of imbalance between ecological protection and regional development. The 18th National Congress of the Communist Party of China formulated the five-pronged strategies for building socialism with Chinese characteristics, that is, to promote coordinated progress in economic, political, cultural, social, and ecological areas, which put forward higher requirements for ecological construction and people’s livelihood development in the new era. Each initiative has a dual goal, that is, to achieve harmony development between human and nature by ensuring key natural capital and reducing poverty (Li et al., 2011).
Ouyang et al. believed that the gross domestic product (GDP) did not fully reflect the contribution of nature to economic activities and human wellbeing, so they developed a measurement standard for the GEP (Ouyang et al., 2021). GEP represents the GDP development potential of a region in a sense. The region with higher GEP represents a good ecological environment and production capacity (Ouyang et al., 2021). From Figure 3 the regions with high GEP in China are mainly concentrated in the northwest and southwest regions where the level of economic development is relatively low, while the regions with high GDP are mainly concentrated in the developed southeast coastal areas. Therefore, it is urgent to apply scientific methods to effectively improve socio-economic development and people’s wellbeing in underdeveloped areas.
FIGURE 3. China’s GEP and GDP in 2015. Note: GDP data sourced from the World Bank (WB) (https://data. worldbank.org/accessed 1 October 2021) and United Nations Statistics Division (UNSD) (https://unstats.un.org/ accessed 1 October 2021).
3.2.2 The Chinese government strongly supports local governments to explore and implement GEP accounting
In recent years, the Chinese government strongly supports local governments to explore and implement GEP accounting (Table 1), and carry out research on the practical mechanism of ecological products, convert the value of ecological products into economic benefits, and reveal the contribution of ecosystems to social development and human wellbeing. China has also made outstanding achievements in consolidating the scientific foundation supporting public policy. This is illustrated by the ongoing nationwide GEP accounting. At the national level, the main protected ecosystem services include water retention, flood regulation, carbon sequestration, climate regulation, sandstorm prevention, soil retention, etc (Zhang et al., 2000; Li et al., 2005; MEP, 2008; Daily et al., 2013).
TABLE 1. GEP accounting in China
(http://www.mnr.gov.cn/. http://www.guizhou.gov.cn/. http://www.qinghai.gov.cn/http://www.nmg.gov.cn/. http://www.xizang.gov.cn/. http://www.sichuan.gov.cn/. http://www.jiangsu.gov.cn/. http://www.yunnan.gov.cn/. http://www.zhejiang.gov.cn/. http://www.jilin.gov.cn/. http://www.guangdong.gov.cn/. http://www.jiangxi.gov.cn/. http://www.fujian.gov.cn/. http://www.hainan.gov.cn/) (accessed 15 October 2021).
From the current research, China’s GEP is characterized by large reserve and development potential, but there are significant regional differences. In 2015, China’s GEP was about 10 trillion $ (Figure 3). Among them, ecosystem material product value (EPV) accounts for about 18% of the national GEP value (Figure 4A), and the areas with EPV of more than 80 billion $ are mainly concentrated in the East and South of China (especially plain areas, such as Northeast Plain, North China Plain, Middle and Lower Reaches of the Yangtze River Plain, Pearl River delta Plain and Chengdu Plain). Due to limited natural conditions, EPV in most areas of Northwest China is low.
FIGURE 4. GEP accounting in China (Ecosystem material product value, Regulation service value and Cultural service value). Note: (A): Ecosystem material product value (EPV). (B): Regulation service value (ERV), (B-a): Water retention, (B-b): Flood regulation, B-c: Water purification, (B-d): Carbon sequestration, (B-e): Climate regulation, (B-f): Air purification, (B-g): Sandstorm prevention, (B-h): Soil retention, (B-i): Pest control. (C): Cultural service value (ECV). Main references (Feng et al., 2013; Xiao et al., 2014; Xie et al., 2015; Pema et al., 2017; Wang et al., 2017; Pan et al., 2018; Dong et al., 2019; Jin et al., 2019; Song et al., 2019; Zou et al., 2019; Ding et al., 2020; Han et al., 2020; Lei et al., 2020; Qian et al., 2020; Wen et al., 2020; You et al., 2020; Deng et al., 2021; Ouyang et al., 2021; Ouyang et al., 2021; Sun et al., 2021; Wei et al., 2021; Wanget al., 2021; Yin et al., 2021; Zhang et al., 2021).
Ecosystem regulation service value (ERV) accounts for about 74% of the national GEP value (Figure 4B). On the whole, the Northwest is higher than the Southeast, such as water retention (Figure 4B-a), water purification (Figure 4B-c), climate regulation (Figure 4B-e) and sandstorm prevention (Figure 4B-g). It shows that Northwest China is the main ecosystem service functional area in China, with good ecological environment and production capacity (Ouyang et al., 2021). Ecological environment is the basis and condition of economic development, which means that Northwest China will have huge GDP development potential. How to convert the value of ecological products into economic benefits is an urgent problem for the future development of Northwest China.
From the distribution of ecosystem cultural service value (ECV) (Figure 4C), compared with EPV and ERV, ECV provides the lowest value, accounting for only about 8% of the national GEP value, and the ECV of Western underdeveloped areas is the lowest. ECV mainly depends on the development and utilization of natural landscape, and the limiting factor is the level of economic development. Therefore, it can be explained that the level of economic development has a significant impact on ECV. In many ecosystem services studies, ECV is often ignored (Seppelt et al., 2012). However, accounting for ECV allows us to have a more comprehensive grasp of the ecosystem, so that the government can consider not only the natural value of the ecosystem, but also its potential social and cultural value when making decisions (Laband, 2013). For example, when the government makes ecological compensation for the forest ecosystem in a certain area, it must not only protect the integrity of the forest ecosystem, but also pay attention to the protection of the habitat and religious traditions of the aborigines, and compensate them as a whole.
3.3 Necessity of global GEP accounting
3.3.1 The contribution of natural ecosystems to the social economy needs to be revealed
According to WB and FAO data (Figure 5), the global forest ecosystem area is 4.36 billion ha, mainly distributed in Europe, South America, Africa and North America (Figure 6A), the grassland ecosystem area is 1.83 billion ha, mainly distributed in Asia and North America (Figure 6B), the wetland ecosystem area is 380 million ha, and North America is the most widely distributed (Figure 6C), the area of glacial permafrost ecosystem is 1.43 billion ha (Figure 6D). However, the degradation of global ecosystems is increasing (World Bank, 2019; UNFAO, 2021). About 60% of the global ecosystems are degraded, more than 30% of the natural freshwater disappears, the forest is reduced by 10 million ha per year (United Nations Food and Agriculture Organization, 2021), the vegetation growth in 59% of the global regions is weakened (Yuan et al., 2019), and the mass loss of ice sheets and mountain glaciers is accelerating (Golledge et al., 2019) (Figure 5). Although the global economy has developed rapidly, with the increase of human demand for energy and water resources, global construction, agriculture and animal husbandry are also expanding (Solomon et al., 2019), which may aggravate the increasing pressure on the stock of limited ecosystem assets and ecosystem services provided (Su et al., 2012; He et al., 2014; Ouyang et al., 2021). Under the background of extensive global climate change and the continuous impact of human activities (IPCC AR6, 2021), the global ecosystem is still facing the weakening of ecosystem service function and the depletion of natural resources in the future, which seriously threatens human survival.
FIGURE 5. Main global ecosystem types and changes. Note: the main ecosystem change data sourced from the World Bank (WB) (https://data.worldbank.org/ accessed 1 October 2021) and the Food and Agriculture Organization of the United Nations (FAO) (https://www.fao. org/accessed 10 October 2021).
FIGURE 6. Distribution of GEP and GDP of major global ecosystems. Note: (A–F) represents the distribution of forest, grassland, wetland, glacier, farmland and urban ecosystems on all continents and major countries. (G) shows the main distribution of global GEP and (H) shows the main distribution of global GDP. The global GEP accounting evaluation mainly refers to the relevant research literature on ecosystem service value (Costanza et al., 1997; de Groot et al., 2012; Costanza et al., 2014; Alamgir et al., 2016; Kuittinen et al., 2016; Kubiszewski et al., 2017; Kim et al., 2018; Chaudhary et al., 2019; Pham et al., 2019; Perrings et al., 2020; Hernandez-Blanco et al., 2021; Jiang et al., 2021; Liu et al., 2021; Pertierra et al., 2021; Piaggio and Siikamäki, 2021; Taye et al., 2021). Global GDP data sourced from the WB (https://data.worldbank.org/accessed 1 October 2021) and the FAO (https://www.fao.org/accessed 10 October 2021).
In the past decade, the concept of ecosystem as an important capital has been popularized rapidly. It is gradually reflected in the fields of agriculture, water conservancy, energy, health, fishery and forestry, as well as the framework and decision-making of many communities, enterprises and government agencies (Daily et al., 2013). In terms of natural capital accounting, many countries have started pilot projects. In 2011, the United Kingdom organized more than 500 scientists to conduct a comprehensive ecosystem assessment. In 2012, Australia also accounted for land and ecosystems. In 2012, the United Nations approved the “core framework of environmental-economic accounting system” and further adopted the “experimental ecosystem accounting of environmental economic accounting system” in 2013. However, these studies failed to measure the contribution of natural ecosystems to the social economy (COP15, 2021).
Therefore, there is an urgent need for GEP accounting research all over the world. Through GEP accounting, we can better clarify the ecological relationship between regions and understand the physical quantity, value quantity and changes of ecosystem services. Finally, it can provide decision-makers and managers in all countries with a scientific basis for ecological protection, so as to better benefit the virtuous circle of global ecosystem protection, restoration and management. (Chen et al., 2009; Ouyang et al., 2021).
3.3.2 Human-nature conflicts are intensifying
According to the research results of Costanza et al., the value of global ecosystem services in 2007 was 46 trillion $/yr, of which forest ecosystem provided about 16 trillion $/yr, grassland ecosystem provided about 7.6 trillion $/yr, and wetland ecosystem provided about 4.8 trillion $/yr (Costanza et al., 1997; Costanza et al., 2014) (Figure 6A–C). According to the latest research of Jiang et al., the global terrestrial GEP in 2017 was 147 trillion $ (Jiang et al., 2021). Overall, it can be said that the value of the global ecosystem is huge. However, we found that with the degradation of forest and glacier ecosystems, the GEP of global forest and glacier ecosystems is decreasing year by year.
In addition, for example, the tropical rain forest, known as the “lung of the earth”, plays an extremely important ecosystem service function, mainly distributed in the Amazon basin and the Congo River Basin. However, most of these two regions belong to poor and backward areas. Whether to develop the tropical rain forest is often related to the local people’s livelihood and development. According to the FAO report in 2021, the deforestation rate of tropical rain forests remained high from 2000 to 2018, especially in Africa, the expansion of cultivated land was the main cause of forest reduction, accounting for more than 75%, while nearly three-quarters of deforestation in South America was mainly caused by the expansion of husbandry (FAO, 2021). Therefore, the contradiction between global ecosystem protection and people’s livelihood development is still intensifying.
At present, the increasing demand of 7.6 billion people for food, energy, and water resources will undoubtedly pose a greater challenge to the stock of ecosystem capital. The world as a whole can be divided into four development models (Figure 6G, H). The first type: “High-High model” i.e. high GEP and high GDP, mainly in the United States, China, etc., accounting for about 0.02%. The second type: the “High-Low model” i.e. high GEP and low GDP, mainly in Congo, Indonesia, Zambia, Argentina and other countries, of which less developed countries are the majority, accounting for about 18.18%. The third type: “Low-High model” i.e. low GEP and high GDP, mainly in developed countries such as Japan, Germany, Britain, Italy, France, etc., accounting for about 13.1%. The fourth type: “Low-Low model” i.e. low GEP and low GDP, mainly in underdeveloped countries in Africa, Central Asia, West Asia, South Asia and Southeast Asia, accounting for about 68.7%. We found that Africa, South America, South Asia and Southeast Asia in Asia are mostly underdeveloped areas, and the widespread poverty problem is still serious. However, the GEP level of these areas is generally higher than the GDP level (Figure 6G, H), which means that have a good ecological environment and production capacity for ecological products. As the world’s main ecological asset reserve area, ecological protection has also been raised to a higher level. However, how to coordinate the contradiction between ecosystem capital protection and people’s livelihood development in these regions is a problem that the world needs to face and solve. Based on this, we will focus on China’s development experience to promote global ecological and economic sustainable development.
4 Discussion
4.1 Fully establish a GEP accounting mechanism
For quantitative accounting of GEP. Firstly, the overall status of ecosystem operation can be grasped through GEP variables and trends. Secondly, GEP can be used to evaluate the implementation effectiveness of ecological protection and ecological construction projects, so as to maintain and improve regional ecosystem and enhance regional sustainable development capacity. Thirdly, GEP accounting can clarify the important role of products and services provided by ecosystems in economic and social development. Fourth, GEP accounting helps to understand the ecological relationship between ecosystem service providers and beneficiaries, and provides a basis for strengthening ecological protection and scientific and reasonable decision-making. Finally, through GEP accounting, ecosystem and human well-being can be linked to evaluate the contribution of ecosystem to human well-being (Ouyang et al., 2021). At present, China is actively carrying out GEP accounting pilot projects, establishing a three-level pilot demonstration system at the provincial, municipal and county levels, including 13 provinces and 32 cities and counties such as Qinghai, Tibet and Guizhou, and actively improving the GEP accounting framework and methods (Jin et al., 2019; Han et al., 2020; Yin et al., 2021). By means of remote sensing big data, digital ecological environment monitoring network and artificial intelligence, and gradually promote the automation of GEP accounting, and finally build an ecological product spatial information data resource database integrating “space, sky and earth” (Figure 7).
FIGURE 7. China GEP work system path model. National level: mainly carry out overall planning, policy guidance and transfer payment; Provincial level: mainly carry out capital investment, ecological value evaluation and financial reward and subsidy; Municipal level: mainly engaged in financial credit, government procurement and market development; County level: mainly engaged in infrastructure construction and ecological product development. Through the exploration of the pilot demonstration system at the provincial, municipal and county levels, and using scientific and technological means, promote the establishment of GEP accounting automation platform and ecological product spatial information data resource database.
This “point to surface, top-down” GEP accounting method can more efficiently and comprehensively grasp the status, trends and problems of ecosystem changes and people’s livelihood development in different areas of the country. Therefore, the whole world, especially developing countries, should support local governments to actively explore and carry out quantitative accounting of the value of ecological products.
4.2 Comprehensive ecological compensation system of “vertical and horizontal combination”
At present, the Chinese government has set clear goals. By 2025, the ecological protection compensation system suitable for economic and social development will be basically complete(Ouyang and Jin, 2017; General Office of the State Council, PRC, 2021). China has implemented a “Vertical and Horizontal Combination” mechanism for ecological protection compensation, in which the Vertical Compensation means that the central government pays ecological compensation to functional ecological zones. The Horizontal Compensation means that the local government will set up a mechanism to compensate the upstream and downstream ecosystems for ecological protection, and carry out a cross-regional approach.
China implemented the Vertical Compensation (Figure 8A). According to the financial situation of the central government, gradually increase the scale of transfer payments for ecological functional areas, and continue to increase ecological protection compensation for key ecological functional areas, such as the Qinghai Tibet Plateau (Jiang et al., 2020; Ouyang et al., 2021), Water source conservation areas (bib_li_et_al_2015Li et al., 2015), National parks (Zheng et al., 2019), Ecologically fragile poverty alleviation areas (Yunnan Guizhou karst area) (Hu et al., 2020), the Loess Plateau areas (Liu et al., 2008; Feng et al., 2013; Delang, 2019; Zhang et al., 2020) and Northwest agro pastoral ecotone areas (Liu et al., 2021). At the same time, governments at the provincial, municipal, county and town levels are encouraged to increase investment in ecological protection compensation funds and formulate guiding policies and incentive measures for ecological protection compensation, for example, compensation shall be given to areas that absorb more ecological immigrants, and the population in ecological functional areas with high pressure on resources and environment shall be gradually transferred outward.
FIGURE 8. Path model of ecological protection compensation mechanism with Chinese characteristics. Note: A represents the vertical ecological protection compensation path model, i.e. the central government increases the scale of ecological transfer payments to ecological function areas, while local governments increase the investment of ecological protection compensation funds and formulate guiding policies and incentive and restraint measures for ecological protection compensation.This model is mostly based on direct financial compensation. B represents the cross regional horizontal ecological protection compensation mechanism path model. The ecological function area exports ecological products (fresh water, food, etc.) and labor force to developed areas, so as to obtain capital return and finally realize the coordinated development of various regions. The photo comes from the official website of Tianzhu County, China (http://www. Gstian zhu.gov.cn/accessed 29 October 2021).
China has increased the Horizontal Compensation (Figure 8B). First of all, the central government encourages local governments to build cross provincial and cross basin horizontal ecological protection compensation mechanisms, and carry out cross regional joint prevention and governance. Secondly, further promote the benign interaction between beneficiary areas and ecological protection areas through counterpart cooperation, industrial transfer, talent training, joint construction of parks, purchase of ecological products and services, etc. In addition, in order to maximize the benefits of ecological protection and people’s livelihood development, China promotes the sharing of interests between ecological benefit areas and protected areas by implementing a comprehensive ecological compensation combining vertical and horizontal. At the same time, encourage local governments to actively carry out ecotourism, develop characteristic industries, explore national culture and implement rural revitalization, and actively explore the path of transforming the value of ecological products into economic benefits, and finally realize the coordinated development of ecology and people’s livelihood.
Based on this, we believe that China’s “vertical and horizontal combination” comprehensive ecological compensation system can be promoted to countries all over the world, especially for countries and regions with “high GEP and low GDP”. We hope that this ecological compensation system can promote common development and promote the vision of a community of shared future for mankind.
4.3 Realize the “dual accounting, dual operation, dual promotion” of GDP and GEP
Over the years, GDP has been widely used in the evaluation of macroeconomic operation (Jiang et al., 2021; Ouyang et al., 2021). With the development of economy and society, simply using GDP to evaluate economic development can not meet the actual needs. GEP accounting makes up for the deficiency that GDP fails to measure the consumption of natural resources and the destruction of ecological environment. With scientific statistical methods, people can clearly and intuitively realize that “lucid waters and lush mountains are invaluable assets” by looking at the data. Therefore, human development activities can determine the production based on “resources and environment”, and then promote the establishment of the realization mechanism of the value of ecological products according to local conditions (Comprehensive program for reform of the ecological progress system, 2015).
Parallel evaluation of GEP and GDP is an important means to promote the coordinated development of economic construction and ecological protection (Jiang et al., 2021). At present, according to the level of economic development, China is divided into Southeast coastal developed areas and Central and Western underdeveloped areas. Among them, the main development model of the southeast coastal developed areas is “Low-High model”, i.e. low GEP and high GDP, and the main development model of the central and western underdeveloped areas is “High-Low model”, i.e. high GEP and low GDP. Therefore, the Chinese government has adopted different development paths and strategies for different regions. For regions with low GEP and high GDP, the State encourages to continue to maintain and steadily promote the current ecosystem protection and socio-economic development, promote the high-quality development of cities, further realize the coordinated development of economy and eco-environmental protection, and achieve a win-win situation. For areas with high GEP and low GDP, the state encourages to further strengthen the protection and increase the value of natural ecosystems on the basis of maintaining the protection of the existing natural ecosystems, while exploring the implementation of industrial upgrades and transformations to achieve sustainable development.
At the same time, we should still have a correct understanding of GEP and the status and role of GEP accounting should not be overemphasized. GDP accounting still occupies the core position in the national accounting system. GEP accounting only provides a new perspective to understand the functions and status of natural systems, especially ecosystems, and provides a new method to supplement and correct GDP accounting. In the future, we still need to increase the exploration of the parallel evaluation mechanism of GEP and GDP to realize “double accounting, double operation and double improvement” of GDP and GEP.
4.4 Research gap and future research challenges
In recent decades, great progress has been made in the research of global ecosystem changes, ecosystem services, human well-being and development. In this review, we comprehensively reviewed the global ecosystem change, and the methods and cases of GEP accounting, and we try to introduce China’s experience in GEP to reconcile some contradictions between ecological protection and people’s livelihood development around the world. The limitations of this study are mainly in two aspects. First, the selection of research cases, which did not cover all countries in the world, only selected typical research cases. Second, data acquisition is mainly based on remote sensing data, literature data and relevant data published by international organizations. There is still a lack of monitoring, experiment and research data. Therefore, we will carry out monitoring, experiment and research in different regions in the future. At the same time, we also consider the challenges that the Chinese experience of GEP poses to the global application process. We believe that the system, policy, economy, population, industry and other factors of different countries will bring great challenges to the development of GEP, so more in-depth research is still needed.
5 Conclusion
Our main conclusions are as follows: 1) Climate change and population growth make the stock of global ecosystem capital and services capacity face increasing pressure. In the future, the weakening of ecosystem services and the depletion of natural resources will continue to threaten human survival. Therefore, the scientific community needs to increase cross-national and interdisciplinary research exchanges and share achievements. At the same time, it needs to increase the research on the practical application and transformation of achievements. In addition, countries also need to further strengthen cooperation to jointly respond to the challenges of global change. 2) Using GEP accounting to evaluate the ecosystem can help people grasp the overall status of the ecosystem operation, reflect the quality of ecological environmental services, understand the relationship between the ecosystem and human well-being, and help decision-makers and managers formulate and implement more scientific and reasonable sustainable development strategies and ecological protection policies. However, there is relatively little research on GEP at present, and the system construction, methods and means and achievement transformation of GEP accounting are still in the exploratory stage. Therefore, more research is needed, especially in practical application. 3) The Chinese government strongly supports local governments in exploring GEP accounting, carrying out research on the practical mechanism of ecological products, transforming the value of ecological products into economic benefits, and revealing the contribution of ecosystems to economic and social development and human wellbeing. In the future, we still need to use scientific and technological means to promote the establishment of GEP accounting automation platform and ecological product spatial information data resource database. 4) About 68.7% of the world’s developing countries with “low and low model” (low GEP and low GDP), especially those in Africa, Central Asia, West Asia, South Asia and Southeast Asia, continue to intensify the contradiction between ecosystem capital protection and people’s livelihood development. 5) We have constructed the path model of GEP working system and the path model of ecological protection compensation mechanism with Chinese characteristics. We believe that GEP accounting system of “from point to area, from top to bottom”, the parallel evaluation strategy of GDP and GEP and the comprehensive ecological compensation system of “vertical and horizontal combination” implemented in China can be popularized to countries all over the world, and reduce the contradiction between global ecological protection and people’s livelihood development.
Data availability statement
The original contributions presented in the study are included in the article/supplementary material, further inquiries can be directed to the corresponding authors.
Author contributions
Conceptualization, HY; methodology, HY and BX; software, HY; validation, XG and WM; formal analysis, HY; investigation, HY; resources, Yangand BX; data curation, HY; writing-original draft preparation, HY; writing-review and editing, XG and WM; visualization, HY; supervision, XG; project administration, XG; funding acquisition, XG. All authors have readand agreed to the published version of the manuscript.
Funding
This research was funded by “the Second Tibetan Plateau Scientific Expedition and Research Program (STEP) (NO.2019QZKK0301)” and “the National Key Research and Development Program of China (NO. 2019YFC0507401)”.
Conflict of interest
The authors declare that the research was conducted in the absence of any commercial or financial relationships that could be construed as a potential conflict of interest.
Publisher’s note
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Keywords: gross ecosystem product (GEP), ecosystem services, natural capital, sustainable development, China
Citation: Yang H, Gou X, Ma W and Xue B (2023) Research and application of GEP: China’s experience in natural capital accounting. Front. Environ. Sci. 11:1106654. doi: 10.3389/fenvs.2023.1106654
Received: 24 November 2022; Accepted: 13 January 2023;
Published: 25 January 2023.
Edited by:
Xiaowei Chuai, Nanjing University, ChinaCopyright © 2023 Yang, Gou, Ma and Xue. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.
*Correspondence: Xiaohua Gou, xhgou@lzu.edu.cn; Weijing Ma, maweijing@lzu.edu.cn