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Ecological Compensation in China - Progress, Problems and Prospects

Ecological compensation is an essential tool for internalizing environmental costs, rationalizing natural resource utilization, alleviating the conflicts between stakeholders, and providing capital for ecological restoration and environmental remediation. Due to irrational allocation and unequal distribution of environmental and economic benefits between stakeholders, there are urgent needs to establish a sound and effective ecological compensation mechanism. In China, ecological compensation was initiated in the 1990s solely to address compensation for forest ecological benefits. Without corresponding laws, regulations, policies, and market mechanism, there are many problems and obstacles to be overcome. In this study, researches on the progress, problems, and prospects of ecological compensation in China were conducted based on theoretical foundations, legal basis, experience acquired, market demands, and Chinese situations. Then, some suggestions were provided to enhance the sustainability of ecological compensation in China.