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The enduring effects of China’s Payments for Ecosystem Services: Short- and long-term industrial transformations

Author

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  • Wang, Wen
  • Pan, Qi

Abstract

Payments for Ecosystem Services (PES) policies are crucial for forest conservation and restoration. While initially restricting the availability of land for primary agricultural activities, these policies can catalyze value-added transformations in the agricultural sectors through the redistribution of resources and labor. Using county-level business registration data from 1998 to 2015, this study examines the agricultural transitions and industrial shifts resulting from China’s Sloping Land Conversion Program (SLCP). Employing a staggered difference-in-differences approach, we observed an annual increase of 24.37 agricultural enterprises and a 2.55% annual rise in agricultural industries within SLCP counties. Further analysis indicates that labor mobility influences the changes in the agro-industries. Over the long term, the availability of transportation and internet services fosters agro-industrial growth; however, in the short term, these factors impede immediate growth by accelerating labor out-migration.

Suggested Citation

  • Wang, Wen & Pan, Qi, 2025. "The enduring effects of China’s Payments for Ecosystem Services: Short- and long-term industrial transformations," Journal of Environmental Economics and Management, Elsevier, vol. 130(C).
    • Handle: RePEc:eee:jeeman:v:130:y:2025:i:c:s0095069625000038
    DOI: 10.1016/j.jeem.2025.103119
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    Keywords

    Payment for Ecosystem Service; Agro-industry; Land conversion; Agricultural transformation;
    All these keywords.

    JEL classification:

    • Q12 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Micro Analysis of Farm Firms, Farm Households, and Farm Input Markets
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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