Output from RUPES-China Projects Zhuangfang Yi With support from Dr.Xu Jianchu, Dr. Su Yufang, Dr. Li Yunju, Dr. Andreas Wilkes (ICRAF-China & East Asia Node)

Project sites Watershed Carbon and biodiversity of grassland Carbon, watershed and biodiversity

Conceptual framework for PES mechanism Local households and communities …… Providers Aesthetic beauty Carbon sequestration Biodiversity Clean water Food production Ecosystem services governments Companies Buyers

PES mechanism on grassland of Tibetan Plateau Policy Influenced: The development of reward for ecosystem services schemes for grass land by the China’s State Council in 2008-2010, China .

PES mechanism on watershed of Songhuaba Compensation standard of PES scheme has been set; Government document has been composed and submitted to related government office; Initiative PES scheme has been started;

PES mechanism in Xishuangbanna

Rubber Expansion 87,226 ha 153,613 ha 438,015 (23%) Rubber expension double during 10years from 1992 to 2002, and 2.5 times during the next 8years. And 35 % of Xishuangbanna is lower than 850 m elevation, which is the suitable land for rubber growing, nowadays rubber monocuture already make up nearly 20% of Xishuangbanna, nearly 10% of these land are located in nature reserve, but other 5% are collective forests, which might still be the targets for rubber/ other cash crops plantation in near future. That mean the remaining rainforest still be threaten by different kind of cash crops.    87,226 ha     153,613 ha 438,015 (23%) Data from: World Agroforest center, China Program and KIB Data from: Agro-forest center China

The trend of Rubber plantations 1400m***** Rubber plantations have already been expanded to 1600m

Cycle of land use change between natural forest and rubber plantation Deforestation Natural forest Rubber plantation Replanting Forest restoration 1400m***** Data from: World Agroforest center, China Program and KIB Data from: Agro-forest center China

Deforestation Natural forest Rubber plantation Replanting Forest restoration Ecocompensation Rubber expension double during 10years from 1992 to 2002, and 2.5 times during the next 8years. And 35 % of Xishuangbanna is lower than 850 m elevation, which is the suitable land for rubber growing, nowadays rubber monocuture already make up nearly 20% of Xishuangbanna, nearly 10% of these land are located in nature reserve, but other 5% are collective forests, which might still be the targets for rubber/ other cash crops plantation in near future. That mean the remaining rainforest still be threaten by different kind of cash crops. Ecocompensation: the monetary payment from environmental markets and transfer payment from governments are given to the individuals who help provide direct and indirect ecosystem service as monetary reward, by changing the individuals’ behavior or ‘doing nothing’ to ensure there is an intact ecosystem to continue to provide ecosystem services. (Analytical and Advisory Assistant program, world bank, 2007) . 1400m*****

Questions What is the Net Present Value of existing rubber and where are low profitability plantations? What is the total value of ecosystem services derived from natural forests compared to rubber plantations? Is there a balance of economic development and conservation in Xishuangbanna by eco-compensation? What the spatial benefit of rubber plantations across the landscape.

Question 1 1. What is the Net Present Value of existing rubber and where are low profitability plantations?

Net present value of rubber plantation on state farm (SF) vs Net present value of rubber plantation on state farm (SF) vs. smallholder (SH) Net present value (NPV) or net present worth (NPW) is defined as the total present value (PV) of a time series of cash flows. It is a standard method for using the time value of money to appraise long-term projects. Used for capital budgeting, and widely throughout economics, it measures the excess or shortfall of cash flows, in present value Bt denotes the revenue in the year t ;Ct stands for the cost in the year t (including establishment cost); r is interest rate. T is rotation years, the state farm is 40 years. NPV is a time series analysis of cash flow for a given investment, comparing the initial value of the investment to the expected reward over the investment's lifespan, given some social discount rate. For example, you might need to find out if you want to run a canteen or just save your money in the bank, if you gave more benefit in next 10 years from the bank because you saved the money there. Then you wont run the canteen with the limited money.

Digital Elevation Model (DEM) Climate data collection 1173 sample sites Digital Elevation Model (DEM) Climate data collection Smallholder Field data collection State farm long-term measurement Annual rubber productivity Soil data collection 500 sample sites, were measured in Menglun township. Then, we created landscape models for rubber productivity, using regression analysis of field measurement of latex production against 46 environmental and climatic variables.

The targets of reforestation and forest protection 1st, if average productivity of rubber plantations is less than 170kg/ha.yr , they were never profitable even at very high prices, since the cost of the plantations (establishing and management cost) is $560/ha.yr.--- for forest restoration. 2nd, plantations situated above 900m elevation or on slopes >24° were not profitable, even at high prices. ---for remaining forest protection Map of net present value of rubber plantations in Xishuangbanna

Answer to question 1 Elevation, slope and rubber tree age are main rubber productivity factors . Plantations over 900m or slope >24°are not profitable. It is not necessary to pay much eco-compensation to recover the low profit rubber plantations.

Question 2 2. What is the total value of ecosystem services derived from natural forests compared to rubber plantations?

Land-use scenarios A. Business-as-usual Scenario B. Conservation Scenario

Landuse and cover types Carbon Sequestration (t/ha) 122 116 105 Carbon Sequestration of different types of land use and land cover Landuse and cover types Carbon Sequestration (t/ha) Seasonal rainforest 122 Paddy field 5 Mantane rainforest 116 Tea plantations 14 Evergreen broad-leaf forest 105 Favorable RP 35 Pinus forest 32 Unfavorable RP 15 Alnus forest 60 Residential area Mossy evergreen broad -leaf forest 80 Water body Shrub and grass land 13 Li et al 2008; Xi 2009;Song and Zhang 2010; Zhang et al. 2011

Carbon sequestration by two land-use scenarios 0.28 billion ton Carbon loss from B to A 0.72 billion ton carbon over 25 years 1 billion ton carbon over 25 years A. Business as usual scenario B. Conservation scenario

Rubber NPV v.s. carbon sequestration Carbon Sequestration (ton) NPV of rubber plantation ($/ha) elevation Carbon Price= NPV of rubber plantations/Carbon Sequestration

Market value of rubber V.S. carbon Elevation Conservation scenario Business-as-usual scenario CP(5.3%) CP(8%) <600 11.509 21.674 31.271 58.888 600-700 13.607 25.624 33.334 62.773 700-800 10.914 20.553 18.582 34.992 800-900 8.322 15.671 14.715 27.710 900-1000 4.226 7.958 12.350 23.258 1000-1100 0.017 0.032 8.019 15.102 1100-1200 0.004 0.008 3.924 7.389 1200-1300 0.000 1.975 3.719 1300-1400 1.444 2.720 1400-1500 0.001 0.002 1500-1600 1600-1700 1700-1800 1800-1900 -0.002 -0.003 1900-2000 >2000

carbon value for policy-making Carbon market can protect large area of Xishuangbanna. Carbon market can be a reliable eco-compensation source.

GIS-based water balance model

Water value Lowland area will be more drier in the future by A. scenario 7766 ton water annually 7011 ton water annually 51% A. Business as usual scenario B. Conservation scenario

Market value of rubber V.S. water Elevation Conservation scenario (USD/L) Business-as-usual scenario (USD/L) WMP (5.3%) (8%) <600 9.27 17.45 24.13 45.43 600-700 9.92 18.68 37.27 70.18 700-800 9.06 17.06 22.76 42.87 800-900 7.21 13.58 11.74 22.11 900-1000 2.66 5.01 5.07 9.55 1000-1100 0.01 2.60 4.90 1100-1200 0.00 1.22 2.30 1200-1300 0.71 1.34 1300-1400 0.52 0.98 1400-1500 1500-1600 1600-1700 1700-1800 1800-1900 1900-2000 >2000

Question 2 2. What is the total value of ecosystem services derived from natural forests compared to rubber plantations?

Answers to question 2 A larger area of natural forest will be protected by carbon finance compared to water market. Conserving and purifying water will require large economic investment over next 25 years. Rubber expansion would cost more than protecting environment.

Question 3 3. Is there a balance of economic development and conservation in Xishuangbanna by eco-compensation? In order to answer this question, we assimilate 3 landuse scenarios to look at what is the best development strategy for Xishuangbanna in the future.

Land could be protected by carbon and water markets $0.16/ton water $4.9/ton C 51%

The main activities and outputs We had composed a ecological land-use planning for Xishuangbanna Prefecuture Government; We had started two pilot sites with Xishuangbanna Prefecture Government and other local research institutes to explore agro-rubber/green rubber based on our study results; We had brought nearly 50 scientists, government officials and village representatives in a workshop this Jan. to discuss the validation of our study results, and also potential PES schemes in Xishuangbanna; We are going to invite high level government officials and more local stakeholders to join our coming workshop to conduct PES overview this Nov..

ICRAF-China thanks all of your support