IDEAS home Printed from https://ideas.repec.org/a/eee/soceps/v102y2025ics0038012125001697.html

How does horizontal ecological compensation promote the coupled development of ecological environment protection and high-quality economy growth? Evidence from China's circular economy practices

Author

Listed:
  • Shen, Qingyuan
  • Lu, Jintao
  • Tutore, Ilaria
  • Cucari, Nicola
  • Guo, Qingbin

Abstract

The horizontal ecological compensation system is a concrete practical arrangement for the development of a circular economy and an important driving force for promoting the win-win situation of protection and development. We used the Yellow River Basin (Henan–Shandong section) horizontal ecological protection compensation pilot project as a quasi-natural experiment and employed the difference-in-differences method to empirically test the direct impact and mediating effects of horizontal ecological compensation on ecological and environmental protection and high-quality economic development. Results reveal that the implementation of the pilot policy for horizontal ecological compensation can promote the coupled development of ecological environment protection and high-quality economy growth, with a greater impact on ecological environment protection (0.0326) than on high-quality economic growth (0.0171). The three variables of building digital infrastructure, adjusting industrial structure, and improving land resource utilization have a significant positive mediating effect, while the mediating effect of improving water resource utilization has not yet become apparent. The effect of the pilot policy is mainly reflected in the upstream Henan section (0.0291) and has an insignificant negative impact on the downstream Shandong section (−0.0060). The conclusion provides theoretical support for exploring the path to green and high-quality development from the perspective of horizontal ecological compensation and offers an important practical approach for governments worldwide to develop a circular economy.

Suggested Citation

  • Shen, Qingyuan & Lu, Jintao & Tutore, Ilaria & Cucari, Nicola & Guo, Qingbin, 2025. "How does horizontal ecological compensation promote the coupled development of ecological environment protection and high-quality economy growth? Evidence from China's circular economy practices," Socio-Economic Planning Sciences, Elsevier, vol. 102(C).
    • Handle: RePEc:eee:soceps:v:102:y:2025:i:c:s0038012125001697
    DOI: 10.1016/j.seps.2025.102320
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0038012125001697
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.seps.2025.102320?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Robin Mansell, 2014. "Power And Interests In Information And Communication And Development: Exogenous And Endogenous Discourses In Contention," Journal of International Development, John Wiley & Sons, Ltd., vol. 26(1), pages 109-127, January.
    2. Muradian, Roldan & Corbera, Esteve & Pascual, Unai & Kosoy, Nicolás & May, Peter H., 2010. "Reconciling theory and practice: An alternative conceptual framework for understanding payments for environmental services," Ecological Economics, Elsevier, vol. 69(6), pages 1202-1208, April.
    3. Walter R. Stahel, 2016. "The circular economy," Nature, Nature, vol. 531(7595), pages 435-438, March.
    4. Hong-Zhen Zhang & Ling-Yun He & ZhongXiang Zhang, 2023. "Can Transverse Eco-compensation Mechanism Correct Resource Misallocation in Watershed Environmental Governance? A Cost-benefit Analysis of the Pilot Project of Xin’an River in China," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 84(4), pages 947-973, April.
    5. Nathalia Suchek & Cristina I. Fernandes & Sascha Kraus & Matthias Filser & Helena Sjögrén, 2021. "Innovation and the circular economy: A systematic literature review," Business Strategy and the Environment, Wiley Blackwell, vol. 30(8), pages 3686-3702, December.
    6. David Besanko & Ulrich Doraszelski & Yaroslav Kryukov & Mark Satterthwaite, 2010. "Learning-by-Doing, Organizational Forgetting, and Industry Dynamics," Econometrica, Econometric Society, vol. 78(2), pages 453-508, March.
    7. Małgorzata Lekan & Andrew E. G. Jonas & Pauline Deutz, 2021. "Circularity as Alterity? Untangling Circuits of Value in the Social Enterprise–Led Local Development of the Circular Economy," Economic Geography, Taylor & Francis Journals, vol. 97(3), pages 257-283, May.
    8. Jintao Lu & Dan Rong & Gabriel Eweje & Xiaolin Yuan & Malin Song & Cory Searcy, 2025. "Effective environmental strategy or illusory tactics? Corporate greenwashing and innovation willingness," Business Strategy and the Environment, Wiley Blackwell, vol. 34(1), pages 1338-1356, January.
    9. Lu, Shibao & Lu, Wenjing & Shao, Wei & Xue, Yangang & Taghizadeh-Hesary, Farhad, 2021. "The transboundary ecological compensation construction based on pollution rights: Ways to keep the natural resources sustained," Resources Policy, Elsevier, vol. 74(C).
    10. Jing Gong & Hongyan Du & Zhi Wang, 2022. "Analysis of the Influences of Ecological Compensation Projects on Transfer Employment of Rural Labor from the Perspective of Capability," Land, MDPI, vol. 11(9), pages 1-14, September.
    11. Kou, Po & Shi, Jianhua, 2024. "Dynamic evolution of China's government environmental regulation capability and its impact on the coupling coordinated development of the economy-environment," Socio-Economic Planning Sciences, Elsevier, vol. 91(C).
    12. Yang, Qiuyue, 2023. "Do vertical ecological compensation policies promote green economic development: A case study of the transfer payments policy for China’s National Key Ecological Function Zones," Economic Systems, Elsevier, vol. 47(4).
    13. Song, Yuegang & Zhang, Bicheng & Wang, Jianhua & Kwek, Keh, 2022. "The impact of climate change on China's agricultural green total factor productivity," Technological Forecasting and Social Change, Elsevier, vol. 185(C).
    14. Yang, Qiuyue & Yang, Zhen & Chen, Yumin, 2024. "The impact of trans-provincial watershed eco-compensation policy on carbon emissions: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 784-802.
    15. Yang, Xinyu & Jiang, Ping & Pan, Yao, 2020. "Does China's carbon emission trading policy have an employment double dividend and a Porter effect?," Energy Policy, Elsevier, vol. 142(C).
    16. Jiang, Yanan & Guan, Dongjie & He, Xiujuan & Yin, Boling & Zhou, Lilei & Sun, Lingli & Huang, Danan & Li, Zihui & Zhang, Yanjun, 2022. "Quantification of the coupling relationship between ecological compensation and ecosystem services in the Yangtze River Economic Belt, China," Land Use Policy, Elsevier, vol. 114(C).
    17. Blasques, Francisco & Koopman, Siem Jan & Lucas, Andre & Schaumburg, Julia, 2016. "Spillover dynamics for systemic risk measurement using spatial financial time series models," Journal of Econometrics, Elsevier, vol. 195(2), pages 211-223.
    18. Chen, Shengming & Wang, Fushuai & Haroon, Muhammad, 2023. "The impact of green economic recovery on economic growth and ecological footprint: A case study in developing countries of Asia," Resources Policy, Elsevier, vol. 85(PA).
    19. Robin Mansell, 2014. "Power and interests in information and communication technologies and development: exogenous and endogenous discourses in contention," LSE Research Online Documents on Economics 32152, London School of Economics and Political Science, LSE Library.
    20. Claudia Ranocchia & Luca Lambertini, 2021. "Porter Hypothesis vs Pollution Haven Hypothesis: Can There Be Environmental Policies Getting Two Eggs in One Basket?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 78(1), pages 177-199, January.
    21. Maiorano, Diego & Shrimankar, Dishil & Thapar-Björkert, Suruchi & Blomkvist, Hans, 2021. "Measuring empowerment: Choices, values and norms," World Development, Elsevier, vol. 138(C).
    22. Ndubuisi, Gideon & Otioma, Chuks & Tetteh, Godsway Korku, 2021. "Digital infrastructure and employment in services: Evidence from Sub-Saharan African countries," Telecommunications Policy, Elsevier, vol. 45(8).
    23. Engel, Stefanie & Pagiola, Stefano & Wunder, Sven, 2008. "Designing payments for environmental services in theory and practice: An overview of the issues," Ecological Economics, Elsevier, vol. 65(4), pages 663-674, May.
    24. Fei, Rilong & Xie, Mengyuan & Wei, Xin & Ma, Ding, 2021. "Has the water rights system reform restrained the water rebound effect? Empirical analysis from China's agricultural sector," Agricultural Water Management, Elsevier, vol. 246(C).
    25. Shima Hamidi & Ahoura Zandiatashbar, 2019. "Does urban form matter for innovation productivity? A national multi-level study of the association between neighbourhood innovation capacity and urban sprawl," Urban Studies, Urban Studies Journal Limited, vol. 56(8), pages 1576-1594, June.
    26. Cui, Lianbiao & Duan, Hongbo & Mo, Jianlei & Song, Malin, 2021. "Ecological compensation in air pollution governance: China's efforts, challenges, and potential solutions," International Review of Financial Analysis, Elsevier, vol. 74(C).
    27. Zhou, Bing & Zeng, Xiaoyan & Jiang, Lu & Xue, Bing, 2020. "High-quality Economic Growth under the Influence of Technological Innovation Preference in China: A Numerical Simulation from the Government Financial Perspective," Structural Change and Economic Dynamics, Elsevier, vol. 54(C), pages 163-172.
    28. Guo, Bingnan & Hu, Peiji & Lin, Ji, 2024. "The effect of digital infrastructure development on enterprise green transformation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    29. Michelle D’Arcy & Marina Nistotskaya & Ola Olsson, 2024. "Cadasters and Economic Growth: A Long-Run Cross-Country Panel," Journal of Political Economy, University of Chicago Press, vol. 132(11), pages 3785-3826.
    30. Sam Fankhauser & Stephen M. Smith & Myles Allen & Kaya Axelsson & Thomas Hale & Cameron Hepburn & J. Michael Kendall & Radhika Khosla & Javier Lezaun & Eli Mitchell-Larson & Michael Obersteiner & Lava, 2022. "The meaning of net zero and how to get it right," Nature Climate Change, Nature, vol. 12(1), pages 15-21, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Nie, Xin & Li, Xiaojuan & Lyu, Chengyu & Su, Yanglan & Wang, Han, 2024. "Can ecological compensation based on the transfer of development rights (TDR) improve ecosystem service value? A multi-scenario simulation," Land Use Policy, Elsevier, vol. 138(C).
    2. Galati, Antonino & Crescimanno, Maria & Gristina, Luciano & Keesstra, Saskia & Novara, Agata, 2016. "Actual provision as an alternative criterion to improve the efficiency of payments for ecosystem services for C sequestration in semiarid vineyards," Agricultural Systems, Elsevier, vol. 144(C), pages 58-64.
    3. Frings, Oliver & Abildtrup, Jens & Montagné-Huck, Claire & Gorel, Salomé & Stenger, Anne, 2023. "Do individual PES buyers care about additionality and free-riding? A choice experiment," Ecological Economics, Elsevier, vol. 213(C).
    4. McGrath, F.L. & Carrasco, L.R. & Leimona, B., 2017. "How auctions to allocate payments for ecosystem services contracts impact social equity," Ecosystem Services, Elsevier, vol. 25(C), pages 44-55.
    5. Soh, Moonwon & Cho, Seong-Hoon & Yu, Edward & Boyer, Christopher & English, Burton, "undated". "Targeting Payments for Ecosystem Services Given Ecological and Economic Objectives," 2018 Annual Meeting, February 2-6, 2018, Jacksonville, Florida 266502, Southern Agricultural Economics Association.
    6. Rodríguez-Ortega, T. & Olaizola, A.M. & Bernués, A., 2018. "A novel management-based system of payments for ecosystem services for targeted agri-environmental policy," Ecosystem Services, Elsevier, vol. 34(PA), pages 74-84.
    7. Cho, Seong-Hoon & Soh, Moonwon & English, Burton C. & Yu, T. Edward & Boyer, Christopher N., 2019. "Targeting payments for forest carbon sequestration given ecological and economic objectives," Forest Policy and Economics, Elsevier, vol. 100(C), pages 214-226.
    8. Zhang, Jing & Brown, Colin & Qiao, Guanghua & Zhang, Bao, 2019. "Effect of Eco-compensation Schemes on Household Income Structures and Herder Satisfaction: Lessons From the Grassland Ecosystem Subsidy and Award Scheme in Inner Mongolia," Ecological Economics, Elsevier, vol. 159(C), pages 46-53.
    9. Bennett, Drew E. & Gosnell, Hannah & Lurie, Susan & Duncan, Sally, 2014. "Utility engagement with payments for watershed services in the United States," Ecosystem Services, Elsevier, vol. 8(C), pages 56-64.
    10. Kosoy, Nicolás & Corbera, Esteve, 2010. "Payments for ecosystem services as commodity fetishism," Ecological Economics, Elsevier, vol. 69(6), pages 1228-1236, April.
    11. Bösch, Matthias & Elsasser, Peter & Wunder, Sven, 2019. "Why do payments for watershed services emerge? A cross-country analysis of adoption contexts," World Development, Elsevier, vol. 119(C), pages 111-119.
    12. Randrianarison, Henintsoa & Ramiaramanana, Jeannot & Wätzold, Frank, 2017. "When to Pay? Adjusting the Timing of Payments in PES Design to the Needs of Poor Land-users," Ecological Economics, Elsevier, vol. 138(C), pages 168-177.
    13. Dario Belluomini, 2016. "Environmental safeguard and Sustainable Development: An Insight into Payments for Ecosystema Services," CEsA Working Papers 140, CEsA - Centre for African and Development Studies.
    14. Legrand, Thomas & Froger, Géraldine & Le Coq, Jean-François, 2013. "Institutional performance of Payments for Environmental Services: An analysis of the Costa Rican Program," Forest Policy and Economics, Elsevier, vol. 37(C), pages 115-123.
    15. Arriagada, Rodrigo & Villaseñor, Adrián & Rubiano, Eliana & Cotacachi, David & Morrison, Judith, 2018. "Analysing the impacts of PES programmes beyond economic rationale: Perceptions of ecosystem services provision associated to the Mexican case," Ecosystem Services, Elsevier, vol. 29(PA), pages 116-127.
    16. Pham, Thu Thuy & Loft, Lasse & Bennett, Karen & Phuong, Vu Tan & Dung, Le Ngoc & Brunner, Jake, 2015. "Monitoring and evaluation of Payment for Forest Environmental Services in Vietnam: From myth to reality," Ecosystem Services, Elsevier, vol. 16(C), pages 220-229.
    17. Mangubhai, Sangeeta & Sykes, Helen & Manley, Marita & Vukikomoala, Kiji & Beattie, Madeline, 2020. "Contributions of tourism-based Marine Conservation Agreements to natural resource management in Fiji," Ecological Economics, Elsevier, vol. 171(C).
    18. Driss Ezzine-de-Blas & Sven Wunder & Manuel Ruiz-Pérez & Rocio del Pilar Moreno-Sanchez, 2016. "Global Patterns in the Implementation of Payments for Environmental Services," PLOS ONE, Public Library of Science, vol. 11(3), pages 1-16, March.
    19. Yin, Runsheng & Zhao, Minjuan, 2012. "Ecological restoration programs and payments for ecosystem services as integrated biophysical and socioeconomic processes—China's experience as an example," Ecological Economics, Elsevier, vol. 73(C), pages 56-65.
    20. Clements, Tom & John, Ashish & Nielsen, Karen & An, Dara & Tan, Setha & Milner-Gulland, E.J., 2010. "Payments for biodiversity conservation in the context of weak institutions: Comparison of three programs from Cambodia," Ecological Economics, Elsevier, vol. 69(6), pages 1283-1291, April.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:soceps:v:102:y:2025:i:c:s0038012125001697. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/seps .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.