Regulations on Ecological Protection Compensation
Decree of the State Council of the People's Republic of
No. 779
The "Regulations on Ecological Protection and Compensation" was adopted at the 26th executive meeting of the State Council on February 23, 2024, and is hereby promulgated to take effect on June 1, 2024.
Prime Minister Li Qiang
April 6, 2024
Regulations on Ecological Protection Compensation
Chapter I: General Provisions
Article 1 These Regulations are formulated in accordance with relevant laws in order to protect and improve the ecological environment, strengthen and standardize ecological protection compensation, mobilize the enthusiasm of all parties to participate in ecological protection, and promote the construction of ecological civilization.
Article 2 These Regulations apply to ecological protection compensation and related activities carried out within the territory of the People's Republic of China and other sea areas under its jurisdiction. Where laws and administrative regulations provide otherwise, follow those provisions.
"Ecological protection compensation" as used in these Regulations refers to incentive institutional arrangements for compensating units and individuals that carry out ecological protection in accordance with provisions or agreements through mechanisms such as financial vertical compensation, inter-regional horizontal compensation, and market mechanism compensation. Ecological protection compensation can take the form of financial compensation, counterpart cooperation, industrial transfer, talent training, joint construction of parks, purchase of ecological products and services, and other forms of compensation.
The units and individuals referred to in the preceding paragraph include local people's governments at all levels, villagers' committees, residents' committees, rural collective economic organizations and their members, and other units and individuals that shall receive compensation.
Article 3 Ecological protection and compensation work adheres to the leadership of the Communist Party of China, adheres to the combination of government leadership, social participation and market regulation, insists on paying equal attention to incentives and constraints, adheres to overall planning and coordinated promotion, and adheres to the unity of ecological benefits, economic benefits and social benefits.
Article 4 People's governments at or above the county level shall strengthen the organization and leadership of ecological protection compensation work, incorporate ecological protection compensation work into the national economic and social development plan, and build a stable mechanism for investing in ecological protection compensation funds.
People's governments at or above the county level may, in accordance with law, expand the channels for ecological protection compensation funds in a variety of ways.
Article 5 The State Council's departments for development and reform, finance, natural resources, ecology and environment, water administration, housing and urban-rural development, agriculture and rural affairs, forestry and grassland, and other departments are responsible for work related to ecological protection and compensation in accordance with their respective duties.
Article 6 Local people's governments at or above the county level shall establish and complete relevant mechanisms for ecological protection compensation work, and urge their subordinate departments and lower-level people's governments to carry out ecological protection compensation work. The relevant departments of local people's governments at or above the county level are responsible for work related to ecological protection and compensation in accordance with their respective duties.
Article 7 Units and individuals that have made remarkable achievements in ecological protection and compensation work shall be commended and rewarded in accordance with relevant national regulations.
Chapter II: Financial Vertical Compensation
Article 8 The State shall compensate units and individuals that carry out the protection of important ecological and environmental elements, as well as units and individuals that carry out ecological protection in key ecological function zones, ecological protection red lines, nature reserves, and other areas with important ecological functions demarcated in accordance with law, through means such as fiscal transfer payments.
Article 9 For units and individuals carrying out the protection of important ecological and environmental elements, the central government shall compensate them according to the following categories (hereinafter referred to as "categorical compensation"):
(1) Forests;
(2) grassland;
(3) wetlands;
(iv) deserts;
(5) oceans;
(6) water flow;
(7) cultivated land;
(8) Other important ecological and environmental elements such as aquatic biological resources and terrestrial wildlife resources as provided for by laws, administrative regulations, and the state.
The specific scope and method of compensation provided for in the preceding paragraph shall be determined by category taking into account factors such as the level of regional economic and social development, financial affordability, and the effectiveness of ecological protection, and shall be announced to the public in accordance with law together with matters such as the use of compensation funds and their supervision and management. The specific measures for categorical compensation by the central government shall be formulated by the competent department of the State Council in conjunction with other relevant departments in different fields.
Article 10 On the basis of the categorical compensation of the central government, and in accordance with the principle of dividing the fiscal powers and expenditure responsibilities between the central and local governments, the relevant local people's governments may establish a categorical compensation system in light of the actual conditions of their own regions, and increase the intensity of compensation for units and individuals that carry out the protection of important ecological and environmental elements.
Where laws, administrative regulations, or provisions of the State Council require that the central and local finances jointly contribute to the implementation of categorical compensation, or that the local finance contribute to the implementation of categorical compensation, the relevant local people's governments shall promptly implement the funds in accordance with the provisions.
Article 11 The central government arranges transfer payments for key ecological function areas, and gradually increases the scale of transfer payments in light of financial resources. According to the characteristics of ecological benefit spillover, importance of ecological functions, sensitivity and vulnerability of ecological environment, differentiated compensation should be implemented in the transfer payment of key ecological function areas, and support should be increased for areas with a high proportion of ecological protection redline coverage.
The finance department of the State Council shall formulate measures for the management of transfer payments in key ecological function zones, clarifying the scope of transfer payments and the distribution methods of transfer payment funds.
Article 12 The State shall establish and complete a compensation mechanism for the ecological protection of the nature reserve system with national parks as the main body. The central and local governments shall compensate units and individuals carrying out the protection of nature reserves by category and level, and reasonably determine the scale of transfer payments based on the type, level, scale, and effectiveness of nature reserves.
Article 13 The ecological protection compensation funds obtained by the local people's governments and their relevant departments shall be used in accordance with the prescribed purposes.
Local people's governments and their relevant departments shall, in accordance with provisions, promptly compensate the ecological protection compensation funds to the units and individuals carrying out ecological protection, and must not withhold, occupy, misappropriate, or default.
Ecological protection compensation funds used by local people's governments as a whole shall be prioritized for the protection of natural resources, ecological environment governance, restoration, and so forth.
The relevant local people's governments for the location of ecological protection areas shall, in accordance with relevant state provisions, steadily promote the overall use of ecological protection compensation funds through different channels, and increase the overall benefits of ecological protection.
Chapter III Inter-regional horizontal compensation
Article 14 The State encourages, guides, and promotes the establishment of ecological protection compensation mechanisms through consultation and other means between ecologically beneficiary areas and the people's governments of ecological protection areas, and carries out horizontal ecological protection compensation between regions.
According to the actual needs of ecological protection, the people's government at the higher level may organize and coordinate the people's government at the lower level to carry out horizontal ecological protection compensation between regions.
Article 15 Inter-regional horizontal ecological protection compensation is carried out for the following areas:
(1) The area where the upper and lower reaches of the river basin, the left and right banks, and the main and tributaries are located;
(2) The area where important ecological and environmental elements are located and other areas with important ecological functions;
(3) The water sources of major water diversion projects and the protection areas along the route;
(4) Other areas where ecological protection compensation is carried out in accordance with the agreement.
Article 16 The central and provincial finances may provide guidance and support to carry out inter-regional horizontal ecological protection compensation in key areas across provinces, autonomous regions, municipalities directly under the Central Government, and across autonomous prefectures and districted cities where ecological functions are particularly important.
For those who have achieved remarkable results in carrying out horizontal ecological protection compensation between regions, the development and reform, finance and other departments of the State Council may give appropriate support in terms of planning, funds, and project arrangements.
Article 17 To carry out horizontal ecological protection compensation between regions, the relevant local people's governments shall sign a written agreement (hereinafter referred to as the compensation agreement) to clarify the following matters:
(1) the specific scope of compensation;
(2) Expected goals for ecological protection and their monitoring and evaluation indicators;
(3) Ecological protection responsibilities in ecological protection areas;
(4) the method of compensation and the relevant arrangements for the implementation of compensation;
(5) the duration of the agreement;
(6) Handling of violations of the agreement;
(7) Other matters.
Factors such as the current status of ecological protection, the cost of ecological protection, the effectiveness of ecological protection, the level of regional economic and social development, and financial affordability shall be comprehensively considered in determining the content of the compensation agreement.
Ecological protection compensation funds obtained by ecological protection areas shall be used for the protection of natural resources, the governance and restoration of the ecological environment, economic and social development, and the improvement of people's livelihood in the region. Where it is necessary to directly compensate units and individuals, compensation shall be made in a timely manner in accordance with provisions, and must not be withheld, occupied, misappropriated, or in arrears.
Article 18 The local people's governments concerned shall strictly perform the compensation agreements they have signed. Ecological protection areas shall implement ecological protection measures in accordance with the agreement, and the ecological beneficiary areas shall actively perform their compensation responsibilities in accordance with the agreement.
If a dispute arises due to the performance of the compensation agreement, the local people's government concerned shall resolve it through consultation; if the negotiation fails, it shall be reported to the people's government at the common higher level for coordination and resolution, and when necessary, the common people's government at the next higher level may make a decision, and the local people's government concerned shall implement it.
Article 19 After the term of the compensation agreement expires, the relevant local people's government shall renew the compensation agreement according to actual needs, and may renegotiate the relevant matters when renewing the compensation agreement.
Chapter IV: Market Mechanism Compensation
Article 20 The state gives full play to the role of market mechanisms in ecological protection compensation, promotes the market-oriented development of ecological protection compensation, and expands the value realization model of ecological products.
Article 21 The State encourages enterprises, public interest organizations, and other social forces, as well as local people's governments, to carry out ecological protection compensation through the purchase of ecological products and services in accordance with market rules.
Article 22 The State shall establish and improve trading mechanisms for carbon emission rights, pollutant discharge rights, water rights, carbon sink rights and interests, promote the construction of trading markets, and improve trading rules.
Article 23 The State encourages and supports the organic integration of ecological protection and the development of ecological industries, and adopts a variety of ways to develop ecological industries under the premise of ensuring ecological benefits, so as to promote the transformation of ecological advantages into industrial advantages and improve the value of ecological products.
The development of ecological industries shall improve the participation methods of rural collective economic organizations and rural residents, establish a sustainable benefit-sharing mechanism, and promote the effective compensation of the interests of ecological protection subjects.
Local people's governments at all levels shall, on the basis of actual needs, accelerate the cultivation of entities engaged in the operation and development of the ecological product market, and give full play to their advantages and roles in integrating ecological resources, coordinating the implementation of ecological protection, providing professional and technical support, and promoting the docking of supply and demand of ecological products.
Article 24 The State encourages and guides social funds to establish market-oriented ecological protection compensation funds, and participates in ecological protection compensation in an orderly manner in accordance with law.
Chapter V: Safeguards, Supervision and Management
Article 25 The government and its relevant departments shall, in accordance with regulations, promptly issue and approve compensation funds for ecological protection to ensure that the compensation funds are in place.
The government and its relevant departments shall strengthen the supervision and management of the use of funds, implement the performance management of the ecological protection compensation fund budget in accordance with regulations, and improve the incentive and restraint mechanism for the implementation of ecological protection responsibilities.
Article 26 The State promotes the unified confirmation and registration of natural resource rights, improves the monitoring and support system for ecological protection compensation, establishes a statistical system for ecological protection compensation, and improves the standard system for ecological protection compensation, so as to provide technical support for ecological protection compensation work.
Article 27 The state will improve fiscal, financial and other policies and measures that are compatible with ecological protection compensation, give full play to the regulatory function of fiscal and taxation policies, and improve the green financial system.
Article 28 The state shall establish and improve a unified green product standard, certification and labeling system, promote the construction of green product markets, implement government green procurement policies, and establish a green procurement guidance mechanism.
Article 29 The government and relevant departments shall, through various forms, strengthen the publicity of ecological protection compensation policies and implementation effects, and create a good social atmosphere for ecological protection compensation work.
Article 30 The government and relevant departments shall, in accordance with law, promptly disclose the situation of ecological protection compensation work, and accept social supervision and public opinion supervision.
Audit institutions shall audit and supervise the management and use of ecological protection compensation funds in accordance with the law.
Article 31 Where ecological protection compensation funds are withheld, occupied, misappropriated, in arrears, or not used in accordance with regulations, the government and relevant competent departments shall order corrections;
Those who fraudulently obtain ecological protection compensation funds by false means shall be dealt with and punished by the government and relevant competent departments in accordance with laws and regulations;
Article 32 Where the government and relevant departments and their staffs have dereliction of duty or dereliction of duty in ecological protection compensation work, they shall be held accountable in accordance with laws and regulations.
Chapter VI Supplementary Provisions
Article 33 These Regulations shall come into force on June 1, 2024.
