The technical assistance (TA) will contribute to the improvement in rural ecological systems and residential livelihood in Beijing. The TA outcome will be the establishment of market-based eco-compensation mechanisms in Beijing. The TA will produce the following outputs: (i) a main report consisting of four sub-reports on (a) potentials and valuation of carbon sequestered in the agricultural and forestry sectors in rural Beijing, (b) development of carbon trading market incorporating forestry and agricultural sectors, (c) economic analysis of carbon trading with agricultural and forestry sectors, and (d) fiscal policies and market-based eco-compensation mechanisms; (ii) a policy note on the development of market-based eco-compensation mechanisms in Beijing; (iii) an international forum on market-based eco-compensation mechanisms; and (iv) trainings for policymakers and potential stakeholders in future eco-compensation schemes.
|Project Name||Market-Based Eco-Compensation Mechanisms in Beijing|
|Country||China, People's Republic of
|Project Type / Modality of Assistance||Technical Assistance
|Source of Funding / Amount||
|Strategic Agendas||Environmentally sustainable growth
Inclusive economic growth
|Drivers of Change||Governance and capacity development
|Sector / Subsector||
Agriculture, natural resources and rural development / Forestry - Land-based natural resources management
Finance / Finance sector development
|Gender Equity and Mainstreaming|
|Description||The technical assistance (TA) will contribute to the improvement in rural ecological systems and residential livelihood in Beijing. The TA outcome will be the establishment of market-based eco-compensation mechanisms in Beijing. The TA will produce the following outputs: (i) a main report consisting of four sub-reports on (a) potentials and valuation of carbon sequestered in the agricultural and forestry sectors in rural Beijing, (b) development of carbon trading market incorporating forestry and agricultural sectors, (c) economic analysis of carbon trading with agricultural and forestry sectors, and (d) fiscal policies and market-based eco-compensation mechanisms; (ii) a policy note on the development of market-based eco-compensation mechanisms in Beijing; (iii) an international forum on market-based eco-compensation mechanisms; and (iv) trainings for policymakers and potential stakeholders in future eco-compensation schemes.|
|Project Rationale and Linkage to Country/Regional Strategy||
Healthy ecological systems can provide invaluable goods and services to human well-being, including carbon storage, biodiversity, and recreational and aesthetic functions. In the People's Republic of China (PRC), the least degraded and healthiest ecological systems are located in the rural or underdeveloped areas surrounding the urban areas. Economic development and livelihood improvement in these areas are the country's priorities to achieve inclusive growth. However, development should not compromise the local ecological systems, which can reduce the services ecosystems can provide.
Eco-compensation provides an innovative way to attain urban-rural integrated development. It allows for rural livelihood improvement while reducing or mitigating some of the negative impacts of development on ecosystems and conserves the important services they provide. The basic idea is to compensate people for refraining from conducting activities that will cause serious damage and impair ecosystem services in fragile or economically important ecosystems. Based on accumulated local experiences and studies, the PRC has started drafting an eco-compensation ordinance' which will serve as a legal basis and guide for establishing eco-compensation programs. ADB has been providing substantial support to this legislative process, as well as its underlying policy studies.
Presently, most eco-compensation programs in the PRC are government-driven, relying heavily on fiscal transfers between government entities. While this kind of arrangement may be effective in the PRC context, this may not properly reflect the value of ecological services provided and the willingness-to-pay of the beneficiaries, and thus, could fail to fully exploit the economic efficiency embodied in the eco-compensation idea. Introduction of market-based mechanisms for eco-compensation is expected to achieve higher efficiency, at least in some cases.
Among the goods and services an ecological system offers is carbon sequestration. Carbon sequestered in land and forestry accounts for a large share in terms of economic values. In a voluntary greenhouse gas emission trading market and with the expected pilot cap-and-trade programs in the PRC, carbon sequestration is an ecological service that could be incorporated into market-based transactions, aside from government driven transactions. In this case, developing market-based eco-compensation mechanisms should start with incorporating carbon sequestration from the agriculture and forestry sectors into carbon trading markets; although many issues in this regard need to be addressed within the PRC context, which include: (i) calculating the amount of carbon sequestered and the potential for additional sequestration, (ii) appropriate methodology for verifying the amount of carbon sequestered and generating carbon credits, (iii) how to practically incorporate the carbon sequestration into a cap-and-trade program, (iv) economic benefits and transaction costs, and (v) how market mechanisms and government-driven eco-compensation programs can better complement each other.
The proposed TA will address the above issues, with Beijing Municipality as the geographical focus. Beijing was chosen for the following reasons: (i) Beijing is prepared to launch a local carbon trading market by the end of 2013, one of the seven pilot programs nationwide. The TA can enhance the experiment in a timely manner; (ii) ecological services provided in the rural area of Beijing are highly valuable and cannot be easily replaced, while the need for rural development remains a challenge to Beijing; and (iii) as a leading city in carbon market development, Beijing's experience could easily be disseminated either through the central government or directly to other local governments.
Increasing carbon sequestration via afforestation, forest management and conservation, improving ecological compensation mechanisms, and controlling greenhouse gas emissions from agricultural practices and animal husbandry are among the key activities highlighted in the _Notification of the State Council regarding the Implementation Plan for the Control of Greenhouse Gases in the Twelfth Five-Year Plan (2011)_. The proposed TA will provide direct support to these national priorities.
|Impact||Improvement in rural ecological systems and residential livelihoods in Beijing|
|Description of Outcome||Establishment of market-based eco-compensation mechanisms in Beijing|
|Progress Toward Outcome||--|
|Description of Project Outputs||
A main report on developing market-based eco-compensation mechanisms prepared
A policy note on development of market-based eco-compensation mechanisms in Beijing prepared
An international conference on market-based eco-compensation mechanisms held
Capacity building related to policy and practice of market-based eco-compensation for policy makers and potential stakeholders provided
|Status of Implementation Progress (Outputs, Activities, and Issues)||Interim workshop held in Beijing on 26-27 January 2016, and Final Workshop and review mission was conducted on 20-21 September 2016.|
|Summary of Environmental and Social Aspects|
|Stakeholder Communication, Participation, and Consultation|
|During Project Design|
|During Project Implementation|
|Consulting Services||The proposed TA will require an estimated 8 person-months of international and 26 person-months of national consultants with expertise in the areas of carbon market development, forestry and agricultural sinks, agricultural economics, rural development, and fiscal policy. Resource persons may be invited to review the consultants' outputs and share knowledge during workshops and conference. The consultants will be engaged through a consulting firm by the executing agency, in accordance with ADB's Guidelines on the Use of Consultants (2013, as amended from time to time), using the quality- and cost-based selection method, with a quality-cost ratio of 80:20, and by inviting simplified technical proposals.|
|Procurement||Equipment for research and field investigation will be procured following ADB's Procurement Guidelines (2013, as amended from time to time).|
|Responsible ADB Officer||Lopez, Alvin|
|Responsible ADB Department||East Asia Department|
|Responsible ADB Division||Environment, Natural Resources & Agriculture Division, EARD|
Beijing Municipal Bureau of Financial Work
ZHANG Jibing, Director, Financial Market Division
The 3rd Floord, No 2. Courtyard Huaibaishu Street, Xuanwu District Beijing, P.R.C. 100053
|Concept Clearance||07 Aug 2013|
|Fact Finding||26 Jun 2013 to 27 Jun 2013|
|Approval||01 Oct 2013|
|Last Review Mission||-|
|Last PDS Update||28 Sep 2016|
|Approval||Signing Date||Effectivity Date||Closing|
|01 Oct 2013||25 Oct 2013||25 Oct 2013||31 Mar 2015||30 Sep 2016||-|
|Financing Plan/TA Utilization||Cumulative Disbursements|
|400,000.00||0.00||290,000.00||0.00||0.00||0.00||690,000.00||01 Oct 2013||378,733.00|
Project Data Sheets (PDS) contain summary information on the project or program. Because the PDS is a work in progress, some information may not be included in its initial version but will be added as it becomes available. Information about proposed projects is tentative and indicative.
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|Title||Document Type||Document Date|
|Market-Based Eco-Compensation Mechanisms in Beijing: Technical Assistance Completion Report||TA Completion Reports||Aug 2017|
|Market-based Eco-compensation Mechanisms in Beijing||Technical Assistance Reports||Oct 2013|
Safeguard Documents See also: Safeguards
Safeguard documents provided at the time of project/facility approval may also be found in the list of linked documents provided with the Report and Recommendation of the President.
None currently available.
Evaluation Documents See also: Independent Evaluation
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No tenders for this project were found.
|Contract Title||Approval Number||Contract Date||Contractor||Contractor Address||Executing Agency||Contract Description||Total Contract Amount (US$)||Contract Amount Financed by ADB (US$)|
|Policy and Advisory||Technical Assistance 8471||12 Jan 2015||United Optimize Technical Service Co., Ltd. (China, People's Republic of)||2105 Kuntai Intl. Tower, Chaoyangmenwai S Chaoyang District, Beijing, PRC||Beijing Municipal Bureau of Financial Work||388850|
None currently available.