Reversing the Biodiversity Impact of Urban Expansion: Evidence from China's Land Market

Does institutional design mitigate the biodiversity loss associated with urban land expansion? This study addresses this question by evaluating China's 2018 "Increment-Stock Linkage" (ISL) policy, which mandates that greenfield land quotas be contingent upon the verified redevelopment of existing brownfield land. By integrating monthly county-level bird observation data from the China Bird Report with comprehensive land transaction records, we employ a triple-difference (DDD) empirical strategy that exploits cross-sectional variation in counties' pre-reform reliance on new land development. Our findings reveal a significant reversal in land–biodiversity elasticity: following the reform, elasticity shifts from −0.027 in control counties to +0.009 in treatment counties. We trace this reversal to two complementary channels: at the extensive margin, reduced greenfield conversion preserves edge habitats essential for landscape connectivity; at the intensive margin, the shift toward brownfield redevelopment raises land use efficiency and compels compensatory urban greening within densified cores. These biodiversity gains are most pronounces among migratory and the ISL reform operates