The Supa River is a tributary of the Nu-Salween River in Longling county, Yunnan, China. It is 71.2 km long with a watershed area of 667 square meters. There is plenty of hydropower potential in the watershed, which already has a reservoir and five hydropower stations. Due to the good geography and climate, trees can easily here. The Supa watershed is home to four townships and 26 villages. In 2002 the total population was 62,000 people, of whom 8.5% are from ethnic minorities. Population density in the watershed is 94 persons per km2, with a per capita arable land of 1.5 mu per person. Poverty is endemic across villages in the area. At RMB 5.53 million in 2002, the revenues of the township governments in the watershed comprised only 14.78% of total county revenues and these township governments were dependent on the county government to cover the RMB 15.14 million deficit in their revenues for that year. The watershed has no backbone industry, and the region has historically been dependent on agriculture. Total grain output is 25.46 million kg, equating to an average of 196 kg per mu and 408 kg per person. Per capita income is 961 RMB (US$118.5).
The concept of payment for environmental services (PES) provides a way of solving ecological degradation and poverty in the poverty-stricken areas in China. Most poor people live in ecologically fragile mountains, and rely on natural resources for their livelihoods. Unsustainable natural resource utilization often leads to environmental degradation. The decaying environment limits sustainable livelihoods. On the other hand, restrictive policies to protect the natural environment prevent local people from benefiting from natural resource protection. PES mechanisms in such areas enable poor local people to earn payment through providing environmental services. The ecological system then benefits from protection and reasonable utilization of its natural resources.
The people in this watershed are willing to plant trees and protect forests for timber production and to maintain the watershed function. They recognise that forest damage leads to insufficient water, land slides and damage to fields. Communities in the Supa watershed have taken collective initiatives to manage their forests, establishing a fund to hire individuals who work as forest guards. Every household has to contribute to the fund according to their forest area. The guards prevent illegal tree-cutting, prevent fires, monitor firewood collection, and stop livestock from foraging in the forest The most common offence is people cutting trees on their own land without permission. The Forestry Bureau and local people share the cost of the guard’s salaries, with 60% coming from the community.
There are still many critical areas of land that need to be converted from farmland to forest in order to stop soil erosion and improve the watershed’s function. The issue under consideration is how to establish a mechanism that will enable the local community, the hydropower company and the local government to increase forest cover in the Supa Watershed and improve watershed functions that will benefit both the community and the company. Can PES achieve this goal?
This study firstly undertook a survey to identify critical areas in the Supa watershed, using GIS, slope, rock, and land use. Some farmland was found in the critical areas along with forests that were not managed well. A second survey was undertaken to assess the economic outputs of different land use. By calculating the opportunity costs of farmers converting farmland to forests, a base can be created for negotiating the price of PES. Thirdly, the ratio of soil erosion to forest cover rates was simulated by use of a Universal Soil Loss Equation. Soil erosion could then be given an economic value as part of hydropower company loss. Lastly, the team conducted interviews in the community to learn about local forest management best practice. Stakeholder perspectives on PES were also collected during these interviews. The paper then suggested a PES mechanism for stakeholder discussion.
The study has provided some lessons: there are currently insufficient funds for reforestation and maintenance of forests; there is a basic lack of common understanding of the benefits and necessity of supporting maintenance of environmental services; more time is needed to convince the hydropower company to pay for watershed maintenance. Moreover, beginning PES negotiations will be very difficult since there is no legal framework for PES in China.
The study has recommended a mechanism of paying for watershed services in the Supa watershed. A watershed fund will be established to reward communities who manage forests well, in line with the forest management plan agreed by the Forestry Bureau, the hydropower company and local people. A committee comprising of village representatives and other stakeholders will be established to ensure the fund will be used for forest protection. A mechanism that stipulates each stakeholder’s rights and responsibilities could then be formalized.
