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Quantifying the Payments for Ecosystem Services Among Hydrologic Units in Zhujiang River bioRxiv preprint doi: https://doi.org/10.1101/616680; this version posted April 23, 2019. The copyright holder for this preprint (which was not certified by peer review) is the author/funder, who has granted bioRxiv a license to display the preprint in perpetuity. It is made available under aCC-BY 4.0 International license. Title page Quantifying the Payments for Ecosystem Services among hydrologic units in Zhujiang River Basin, China based on the indicator of Optional Capacity Value YANG Haile a, b, 1#, ZHAO Bin a, b, *, CHEN Jiakuan a, b, c a Institute of Biodiversity Science, Fudan University, 2005 Songhu Road, Shanghai 200438, PR China b Department of Ecology and Evolutionary Biology, School of Life Sciences, Fudan University, 2005 Songhu Road, Shanghai 200438, PR China c Centre for Watershed Ecology, Institute of Life Science, Nanchang University, 999 Xuefu Avenue, Nanchang 330031, China 1# Present Address: Key Laboratory of Freshwater Biodiversity Conservation, Ministry of Agriculture of China, Yangtze River Fisheries Research Institute, Chinese Academy of Fishery Sciences, 8 First Wudayuan Road, Wuhan 430223, Hubei Province, PR China E-mail: [email protected], [email protected] (YANG Haile); [email protected] (ZHAO Bin); [email protected] (CHEN Jiakuan) * Corresponding author E-mail: [email protected] (ZHAO Bin) 1 bioRxiv preprint doi: https://doi.org/10.1101/616680; this version posted April 23, 2019. The copyright holder for this preprint (which was not certified by peer review) is the author/funder, who has granted bioRxiv a license to display the preprint in perpetuity. It is made available under aCC-BY 4.0 International license. 1 Abstract 2 Ecosystem services (ES) are fundamental to human being’s livelihoods, production and survival. 3 However, the spatial mismatch between ES supply and demand is a common phenomenon. 4 Payments for Ecosystem Services (PES) provide a way to promote the complementary advantages 5 and benefits equilibrium between ES supplier and beneficiary. At present, PES is mainly based on 6 the tradeoff between the profit and loss of ecological conservation. The quantifying of PES mainly 7 uses the opportunity cost of ES supplier and follows the principle of additionality, which neglects 8 the benefits that arise from the basic (contrast to additional) ES experienced by ES beneficiary and 9 ignores the rights and interests of ES supplier who supplies the basic ES. To resolve this problem, 10 we proposed that we should set the value of ES experienced by ES beneficiary as the quantitative 11 indicator of PES. Here, we introduced a new indicator (optional capacity value, OCV) to 12 implement this idea. The ES OCV indicates the optional capacity of supporting the total value 13 produced by human being's economic and social activities provided by the total volume of an ES. 14 In this paper, we calculated the ES OCV of water provision in Zhujiang River Basin (Pearl River 15 Basin), China. Then, we discussed three scenarios of quantifying PES, based on the principles of 16 (1) interests sharing and responsibilities bearing and (2) equal pay for equal work. The results 17 showed that the ES OCV could describe the conditions that water resources in a hydrologic unit 18 not only provide benefits to the hydrologic unit itself, but also provide benefits to downstream 19 hydrologic units, and then could be a quantitative indicator for PES. This research provides a new 20 PES scheme which would promote the coordinated development and ecological conservation 21 among the regions with mismatch between ES supply and demand. 22 23 Keywords: ecological compensation; sustainable development; ecological economy; watershed ES: ecosystem service(s) OCV: optional capacity value GDP: gross domestic product PES: payments for ecosystem services TVPH: total value produced by human being's economic and social activities PRWRC: Pearl River Water Resources Commission of the Ministry of Water Resources 2 bioRxiv preprint doi: https://doi.org/10.1101/616680; this version posted April 23, 2019. The copyright holder for this preprint (which was not certified by peer review) is the author/funder, who has granted bioRxiv a license to display the preprint in perpetuity. It is made available under aCC-BY 4.0 International license. 24 services; watershed integrated management; watershed ecology 25 26 1 Introduction 27 Ecosystem services (ES) are the benefits that humans derive from nature and are fundamentally 28 important for human wellbeing, health, livelihoods, and survival (Costanza et al., 1997; 29 Millennium Ecosystem Assessment, 2005; TEEB Synthesis, 2010; Mancini et al., 2018). 30 Mismatches between ES supply and demand are common in the world (Geijzendorffer et al., 2015; 31 Baro et al., 2016; Wei et al., 2017). Payments for Ecosystem Services (PES) provide a pathway 32 that ES beneficiary pays something to ES supplier as compensation, which reflects the benefits 33 experienced by ES beneficiary and the costs paid out by ES supplier (Engel et al., 2008; Zheng et 34 al., 2013; Wunder, 2015). PES promotes the optimization of landscape planning and land use 35 management, the complementary advantages and benefits equilibrium between ES supplier and 36 beneficiary, and then increases the regional and global ES provision (Farley and Costanza, 2010; 37 Hayha and Franzese, 2014; Fu et al., 2018). We could qualitatively or quantitatively describe the 38 value of ES (Costanza et al., 1997; Mancini et al., 2018; Martin and Mazzotta, 2018). The ES 39 value has been used to support ecosystem management (Grizzetti et al., 2016; Kubiszewski et al., 40 2017; Sun et al., 2018) and is expected to provide a quantitative indicator for PES. 41 42 At present, PES is mainly based on the tradeoff between the profit/loss of ES supplier and 43 beneficiary in natural resources exploitation or in ecological conservation (Engel et al., 2008) and 44 follows the principle of additionality which means that ES beneficiary only pays for the ecological 45 conservation which could produce additional ES (Wunder, 2015). This PES approach neglects the 46 benefits arising from the basic (contrast to additional) ES experienced by ES beneficiary and 47 ignores the rights and interests of ES supplier who supplies the basic ES. To resolve this problem, 48 we need to quantify PES based on the benefits (ES values) experienced by ES beneficiary. 49 However, current ES valuation approaches could not provide any indicator to quantify the PES 50 based on the basic ES. So, we need a new approach and a new indicator to value ES. 51 3 bioRxiv preprint doi: https://doi.org/10.1101/616680; this version posted April 23, 2019. The copyright holder for this preprint (which was not certified by peer review) is the author/funder, who has granted bioRxiv a license to display the preprint in perpetuity. It is made available under aCC-BY 4.0 International license. 52 PES could be user-financed, in which funding comes from the users of the ES, or be 53 government-financed, in which funding comes from a third party (typically the government) 54 (Engel et al., 2008; Wunder et al., 2008; Wunder, 2015). Theoretically, user-financed PES is more 55 effective and flexible than government-financed PES in a free market (Pagiola and Platais, 2006). 56 Practically, government-financed PES is more cost-efficient than user-financed PES because of 57 transaction cost, especially when the PES program is conducted in a large-scale (Engel et al., 58 2008). Moreover, most of the PES programs in both developed and developing countries are 59 government-financed (Schomers and Matzdorf, 2013). So, we expect the new ES value indicator 60 should be adapted to government-financed PES. 61 62 As we all know, human beings could not survive without any of vital ES which is indispensable to 63 human being’s survival (such as oxygen, freshwater) (Chaisson, 2002). In another word, all values 64 produced by human depend on vital ES. In another perspective, ES could not provide any values 65 to people without the presence of human capital, social capital and built capital (Costanza et al., 66 2014). So, the consumption of vital ES supports the total value produced by human being's 67 economic and social activities (TVPH). The total volume of ES provides the freedom of choice for 68 ES consumption. So, the ES value provided by a vital ES could be described as the optional 69 capacity for supporting the TVPH, which could be calculated by using the product of multiplying 70 the TVPH by the freedom of choosing the consumption from the total volume of this ES. This new 71 ES value is termed as ES optional capacity value (OCV). 72 73 In this work, we presented a case study of valuing the ES OCV of water provision in Zhujiang 74 River Basin (Pearl River Basin), China to quantify PES. The main objectives of this study are: (1) 75 to discuss how the ES OCV serves as a quantitative indicator for PES; (2) to show the approach of 76 valuing ES OCV. This study would provide a new scheme and tool for understanding and 77 implementing PES. 78 4 bioRxiv preprint doi: https://doi.org/10.1101/616680; this version posted April 23, 2019. The copyright holder for this preprint (which was not certified by peer review) is the author/funder, who has granted bioRxiv a license to display the preprint in perpetuity. It is made available under aCC-BY 4.0 International license. 79 2 Materials and methods 80 2.1 Study area and data 81 The Zhujiang River Basin in South China covers an area of 453,700 square km and consists of 82 four major river systems, the Xijiang River, the Beijiang River, the Dongjiang River and the 83 Zhujiang Delta (ECERLC, 2013).
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