Reconsidering ecosystem services marketization: subnational government behaviour and motivation in China

The marketization of ecosystem services (MES) refers to institutional arrangements that assign economic value to ecosystem services (ES) and enable their exchange through market mechanisms. Its core aim is to incentivize the protection and sustainable provision of ES. A distinctive form of MES, which can be termed government-led ES market development, exists in China: the government plays a constitutive role in building markets—defining property rights, establishing trading rules, and enrolling diverse actors into market-like transactions—while also participating directly as a market actor through state-owned enterprises. Consequently, the behaviour of subnational governments plays a decisive role in determining the success or failure of such markets, yet why some proactively support and engage in MES while others remain passive is poorly understood. To address this gap, we developed a “capacity–pressure–incentive” framework and applied fuzzy-set Qualitative Comparative Analysis to 31 Chinese provinces. Three findings emerge. First, no single condition independently explains subnational support; capacity, pressure, and incentive operate configurally. Second, configurations with all three dimensions form the most robust pathway to high support; when two dimensions are present, only “capacity–pressure” and “pressure–incentive” yield high support, while “capacity–incentive” does not; configurations with only one dimension consistently result in non-high support. Third, pressure plays a core yet conditional role—its effectiveness depends on combination with either capacity or incentive. Building on these findings, this study offers a novel perspective on the feasibility of government-led MES by centering on subnational government behaviour, while providing an analytical framework applicable to diverse stakeholders in ES governance.