Undetermined Center, Non-Working Localities, and Inactive Farmers: The Implementation Failures of China’s Reforestation Program by Xueying Yu A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy (Natural Resources and Environment) in the University of Michigan 2013 Dorctoral Committee: Professor Dorceta E. Taylor, Chair Professor Arun Agrawal Associate Professor Abigail Jahiel, Illinois Wesleyan University Professor Stephen W. Salant Copyright 2013 By Xueying Yu Dedication To Dad and Mom for their love and support ii ACKNOWLEDGMENTS I am deeply indebted to Dorceta Taylor for guiding me through my graduate school life from the day that we hug each other in the hallway of Dana. As a mentor, she provided inspirations, supports, encouragement, and definitely generous advice on my teaching and research. I am equally grateful to Stephen Salant, the best economist I have ever met in person. He had re-shaped the way I think and use economics. I feel so lucky to have one of the most prestigious political economists, Arun Agrawal, serving on my committee. His work and advice inspired me to initiate such an inter-disciplinary study in forest policy analysis. Finally, the work would have never been done without the inputs from Abigail Jahiel, an China expert, especially on environmental policy. My field trip and dissertation research was funded by the Rackham Graduate School and School of Natural Resources and Environment. They were also generally supported by Yufang Zhao and Chongzeng Bi at the Southwest University, China. The dissertation benefited from comments at the International Ecosystem Service Partnership Conference and Conference of Asian Association of Social Psychology. Special thanks go to my Chinese colleagues, Qiang Dai and Jie Cheng, for answering my tough questions and sharing their time to make my graduate school life enjoyable. I owe a tremendous debt of gratitude to my parents, Lei Yu and Chunjie Chen, for their unconditional love. iii Table of Contents Dedication………………………………………………………………..……..………..ii Acknowledgements…………………………………………………………..…….…….iii List of Figures…………………………………………………………………………….vi List of Tables……………………………………………………………………………vii List of Abbreviations………………………………………..…………………………..viii Abstract………………………………………………………………………………...x Chapter 1 China’s Reforestation Policy and Its Institutional Failures: An Introduction………………………………………………………………………………..1 1.1 Introduction……………………………………………………………..…1 1.2 Environmental and forestry governance institutions in China ………….3 1.2.1 Environmental governance institutions ………………………….3 1.2.2 Forestry governance institutions ……………...………………….13 1.3 Forestry policy in China and the Sloping Land Conversion Program (SLCP)…………………………………………………………………………………19 1.3.1 Forestry policy in China ……………………...……………….19 1.3.2 The SLCP as a PES program………………………………….28 1.4 Policy deficits in the SLCP and dissertation structure...…………...…….58 References………………………………………………………………..61 Chapter 2 The Effect of Stochastic Oscillations in Property Rights Regimes on Forest Output in China…………………………………………………………………...78 2.1 Introduction………………………………………………………………78 2.2 The model………………………………………………………………..82 2.3 Comparative static analysis……………………………………………..88 2.3.1 Effects of changing the compensation level ( ……………….88 2.3.2 Effects of changing the mean time as common property ( ).89 2.3.3 Effects of changing the mean time as private property ( )…90 2.4 Loss of forest value due to the uncertain tenure policy……………...94 2.5 Conclusion……………………………………………………………….98 References……………………………………………………………..100 Chapter 3 Locales as the Link: Institutional Failures and Innovations of the SLCP Implementation …………………………………………..…………………………..102 3.1 Introduction…………………………………………………………102 3.2 Methods………………………………………………………………....106 3.3 Policy implementation at the local level..…………………………….109 3.3.1 Allocation of reforestation quota……………………………….113 3.3.2 Provision of post-reforestation supports………………………..118 3.4 Local governments’ solutions………….……………………………...123 3.4.1 Milking the compensation system……………………………...123 iv 3.4.2 Proposing supporting programs associated with the SLCP…….126 3.4.3 Developing off-farm industries…………………………………130 3.5 Conclusion…………………………………………………………….134 References…………………………………………………………….139 Chapter 4 Farmers’ Intention to Participate: An Environmental Attitude-Behavior Analysis towards the SLCP.……………………………………………………………143 4.1 Introduction……………………………………………………………143 4.2 Environmental behaviors and attitudes…………………………...148 4.2.1 Connection between environmental behavior and attitudes……148 4.2.2 Connection between environmental attitudes and social determinants……………………………….……………………………………………154 4.3 The method……………………………………………………………163 4.3.1 Sampling and sample characteristics………………………….163 4.3.2 The survey……………………………………………..………168 4.4 Results…………………………………………………………………170 4.4.1 Intention to participate: An TORA analysis…...……………….170 4.4.2 An inverse correlation: the impact of participation in the SLCP on farmers’ knowledge, perception, and attitudes towards reforestation, as well as environmental protection ………..……………………………………………..………187 4.5 Discussion………………………………………………………………190 4.6 Conclusion……………………………………………………………...195 References………………………………………………………………198 Chapter 5 Conclusions and Policy Recommendation……………………………...213 5.1 Summary of key findings……………………………………………...213 5.2 Policy recommendations……………………………………………….217 5.3 Future work…………………………………………………………….219 References………………………………………………………………221 v List of Figures Figure 1-1. Coordination and Competition between MEP and Other Functional Units…..5 Figure 1-2. Environmental Governance Sandwich: MEP, Local EPBs, and Local Governments………………………………………………………………………………7 Figure 1-3. A Model of China’s Environmental Governance Dilemma Highlighting the Three Key Stakeholders………………………………………………………………...11 Figure 1-4. Coordination and Competition between SFA and Other Functional Units…16 Figure 1-5. The Path for Requesting and Assigning AAC….…………………………...26 Figure 1-6. Geographic Expansion of the SLCP………………………………………...31 Figure 1-7. PES Mechanism in the SLCP………………………………………………..32 Figure 1-8. External Benefit of Forest Operation………………………………………..34 Figure 1-9. Context Interactions with PES Policy Design……………………………….43 Figure 1-10. Factors Concerning Rural Participants of the SLCP………………………44 Figure 1-11. The Effects of PES on Poverty…………………………………………52 Figure 1-12. The Proposed Best Way of Dealing with Hillsides in China………………57 Figure 2-1. Optimal Rotation Age with Changing Rate of ………………………….92 Figure 2-2. Forest Land Value with Changing Rate of ……………..………………...92 Figure 2-3. Percentage Loss of Forest Value with Changing Rate of …………………97 Figure 2-4. Percentage Loss of Forest Value with Changing Rate of …………………97 Figure 2-5. Percentage Loss of Forest Value with Changing Rate of ………………98 Figure 3-1. A Map of China Showing the Four Provinces Studies…………………….107 Figure 3-2. Administrative Structure of the SLCP……………………………………..111 Figure 3-3. The Area of Reforested Croplands and Barren Lands under the SLCP….125 Figure 4-1. Theory of Reasoned Action………………………………………………150 Figure 4-2. Farmers’ Knowledge about the SLCP……………………………………181 vi List of Tables Table 1-1. Major Environmental Laws in China…………………………………………8 Table 1-2. Major Environmental Movements 2005-2009………………………………9 Table 1-3. Contemporary Tenure and Management Arrangements for Non-State Forests……………………………………………………………………………………22 Table 1-4. Major Forest Conservation and Restoration Programs in China……………27 Table 3-1. Central and Local Government Expenditure and their Investment in Rural Infrastructure Construction……………………………………………………………..122 Table 3-2. Proposed Reforestation Supporting Programs in Sampled Provinces………128 Table 4-1. Environmental Attitude Comparison between the US and Asian Countries..159 Table 4-2. Economic Conditions of the Four Surveyed Provinces……………………164 Table 4-3. Sample Distribution…………………………………………………………166 Table 4-4. Questions about Farmers’ Attitudes towards the SLCP……………………169 Table 4-5. Questions about Farmers’ General Environmental Attitudes………………170 Table 4-6. Farmers’ Intention to Participate in the SLCP……………………………171 Table 4-7. Farmers’ Affective Evaluation towards Reforestation……………………...172 Table 4-8. Farmers’ Evaluation of Reforestation Consequences under the SLCP……175 Table 4-9. Farmers’ Perceived Social Expectation on the SLCP………………………177 Table 4-10. Farmers’ Difficulties in Implementing the Reforestation Policy………….179 Table 4-11. Farmers’ General Attitudes towards Environmental Protection…………..183 Table 4-12. Farmers’ Environmental Concern…………………………………………185 Table 4-13. Attitudinal Differences between SLCP Participants and Non-participants..188 Table 5-1. Major Forest Conservation and Restoration Programs in China……………214 vii List of Abbreviations AAC Annual Allowable Cut ANOVA Analysis of Variance CAS Chinese Academy of Sciences CDM Clean Development Mechanism CIFOR Center for International Forestry Research CRP Conservation Reserve Program, the U.S. ETS Emission Trading System FAO Food and Agriculture Organization of the United Nations FONAG The Fund for the Protection of Water, Ecuador FONAFIFO National Forestry Financing Fund, Costa Rica EC Environmental Concern EPB Environmental Protection Bureau, China ES Ecosystem Services GDP Gross Domestic Product GGP Grain for Green Program (tuigenghuanlin) GIS Geographic Information System ha Hectare HRS Household Responsibility System kg kilogram km2 square kilometer m meter viii MEP Ministry