Quantitatively formulating compensation standard is a core and difficulty to
establish ecological compensation mechanism. In order to explore appropriate compensation
standard for returning farmland to forest and provide reference for national and regional
compensation policy formulation in the Loess Plateau, in the international background of the
Clean Development Mechanism and logging ban policy, this paper builds a dynamic model of
compensation standard for returning farmland to forest by combining value of carbon-sink with
farmers opportunity cost. Through theoretical analysis and field measurements, combined with
laboratory experiments, we made an empirical study of the representative watershed—
Xiannangou Watershed on the Loess Plateau. The compensation cycle is determined to be 37
years according to the growth characteristics of the Robinia pseudoacacia forest in the
Xiannangou Watershed. The compensation process and standard are divided into two stages.
During the 1st-17th years of returning farmland to forest, when the farmers opportunity cost is
greater than the value of carbon- sink, we should compensate for the actual economic loss of
farmers. Executable standard of compensation is 1 997.26 yuan/(hm2· a) according to the opportunity
cost. During the 18-37th years of returning farmland to forest, the value of carbon-sink
is greater than the farmer s opportunity cost, which means that the industry substitution has
completed. Executable standard of compensation is 3 692.35 yuan/(hm2· a) according to carbon
sink model. In summary, the value of carbon- sink accounts for 89.50% of the total compensation
in the compensation period. Artificial Robinia pseudoacacia forest will gradually
generate shrubs and decline after the compensation period, therefore, the compensation
standard should be calculated and perfected again in accordance with the change of forestland
ecological community after the compensation period finished. Involving the value of carbonsink
into the compensation system can push farmers to manage and protect forestland
consciously for improving the carbon sink production, which is beneficial to consolidate the
achievements of the Grain for Green Program on the Loess Plateau.
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