Grassland certification, grazing behavior, and ecological consequences: Evidence from pastoral China

This paper investigates the ecological consequences of grassland property rights reform in China, focusing on its relationship to economic incentives. Using remote sensing and plot-level data, we found that the Normalized Difference Vegetation Index (NDVI), a proxy for grassland ecology, decreased by 5.5 % in our study area following the implementation of the certification reform. Three potential mechanisms may explain these negative ecological outcomes. The first mechanism is the severe fragmentation of grasslands; contiguous large-scale grasslands were divided into smaller, fragmented plots after the reform, leading to increased grazing intensity. The second mechanism posits that economic incentives drive herders to expand their operations. This is closely linked to the third mechanism: the imperfection of grassland use rights. Due to incomplete property rights and frequent imperfections in grassland transfers, overgrazing primarily occurs on rented land rather than self-owned land, resulting in greater ecological degradation on rented plots. Additionally, while household-level aggregate livestock output increased and grassland rental markets became more efficient, we argue that, despite these anticipated improvements, property rights reforms have heightened the vulnerability of grassland ecology. These findings suggest that the trade-off between grassland sustainability and livestock productivity, driven by the grassland property rights reform, has impeded the development of more comprehensive strategies to mitigate grassland degradation.