Why should landowners in protected areas be compensated? A theoretical framework based on value capture

Many protected areas around the world are struggling to achieve financial stability and meet management costs, which is a difficult challenge. This difficulty is particularly acute in China, even though protected area conservation has been increasingly stressed upon in recent central policy announcements. The practice of providing supplemental funding for protected areas has been going on for years, but there is a lack of theoretical research on why and how landowners in protected areas could be compensated. This paper aims to fill the gap and make two contributions to the literature by explaining why landowners in protected areas should be compensated and who should pay for protected areas. The theoretical arguments on compensation for protected areas are first reviewed before we derive the theoretical framework of value capture for protected areas in China based on the principle of symmetry between burden and compensation. We conclude that local residents should be compensated according to the principle of equal public burden because the spatial regulation of protected areas has seriously restricted their land development rights. Furthermore, the beneficiaries of added land value in the process of the spatial regulation of protected areas can be categorized into three groups: the general public, residents around protected areas and some residents in protected areas (along the infrastructure site or in the upzoning area). Therefore, we structure a three-level value capture framework for protected areas. This is the first attempt to study compensation for protected areas based on value capture theory, which can provide guidance on protected area management for government leaders and researchers across the world.