Eco-compensation is a policy mechanism which aims to mitigate the negative environmental impacts of human activities by implementing measures to offset or compensate for ecological damage caused by those activities. Examples of eco-compensation include fiscal transfer, regional cooperation and market incentives. 

Over the past two decades, eco-compensation has seen significant growth in the People’s Republic of China (PRC). Pilot projects established at the regional scale have demonstrated encouraging promise across the country. Although a national eco-compensation strategy has yet to be implemented, these pilot studies have provided the foundation for eco-compensation to be adopted and integrated into broader incentive mechanisms to achieve sustainability, supported by appropriate regulatory and legal basis. 

Since 2009, the Asian Development Bank (ADB) has supported the development of eco-compensation in the PRC. This has predominantly been through facilitating policy dialogue and technical cooperation with the National Development and Reform Commission (NDRC) on a range of projects and policy reform initiatives, including eco-compensation policy, legislation, market-based instruments, performance evaluation, and links with wider poverty reduction initiatives. 

After a three-year postponement because of the Covid-19 pandemic, this year’s conference is a regional flagship event led by the ADB’s Agriculture, Food, Nature and Rural Development Sector Group (AFNR) to promote collaboration among public, private, and civil sectors for sustainable conservation finance, discuss innovative financing methods and challenges, strengthen networks among eco-compensation and PES stakeholders, and facilitate knowledge sharing among countries including the PRC.

This year’s 9th International Conference on Eco-compensation and PES will review the progress of eco-compensation in the PRC and PES in other parts of the world, and has a thematic focus on legal framework for eco-compensation and PES which ADB has assisted since 2009 with a number of TAs including TA-7699 PRC and TA-6595 PRC.