1. Introduction
With more than 40 years of reform and opening the economy, China has achieved remarkable economic growth [
1]. In 2019, China’s GDP reached US
$12242.776 billion with 6.1% annual growth rate, ranking second internationally with the United States being first [
2]. However, due to the rapid economic development, environmental problems have increased [
3], with quality deterioration of the ecological environment being the most prominent. In order to effectively alleviate and curb further quality deterioration of the ecological environment, General Secretary Xi Jinping clearly stated in November 2012 during the eighteenth National Congress of the Communist Party of China that we should vigorously promote the construction of an ecological civilization [
4], strive to build a beautiful China, and realize a sustainable development of the Chinese nation [
5]. In September 2013, General Secretary Xi, while in Nazarbayev University, Kazakhstan, stated “beautiful scenery, golden hill and silver mountain”, highlighting the importance of green and sustainable development [
6].
Since then, China’s Central Committee, led by General Secretary Xi Jinping, has made the protection of the ecological environment a priority to ensure the sustainable development of China’s economy and society [
7]. Located in the Jiangxi Province, the Poyang Lake River Basin is the largest freshwater lake basin in China and has made important contributions not only to China’s but also the world’s economic development [
8]. However, in recent years, there have been some ecological and environmental problems, such as a decline in water quality and a sharp decrease in watershed area [
9]. The watershed ecological compensation mechanism is a comprehensive economic policy that promotes the internalization of external costs of water-environment protection and water pollution, improves the inter-regional collaboration on water-environment protection, and ensures coordinated upstream and downstream governance within the basin [
10]. Therefore, in order to effectively protect the ecological environment in the Poyang Lake River Basin, in November 2014, the National Development and Reform Commission, the Ministry of Finance, the Ministry of Land and Resources, the Ministry of Water Resources [
11], the Ministry of Agriculture and the State Forestry Administration officially approved the
implementation plan for the construction of an ecological civilization pilot zone in Jiangxi Province (hereinafter referred to as the “plan”). In November 2015, the Jiangxi Provincial People’s government issued and distributed the
ecological compensation measures for river basins in Jiangxi Province (for Trial Implementation) in order to implement the contents of the plan and build the ecological compensation mechanism in the Poyang Lake River Basin [
12]. The promulgation of the policy that aims to improve the water resources in the Poyang Lake River Basin is of great historical significance, and means that China has taken the lead in carrying out the pilot project of river-basin ecological compensation policy in Jiangxi Province [
13]. However, it has been several years since the promulgation of the policy, and there are several issues to be addressed: What is the implementation effect of the ecological compensation policy? Are there differences among different regions in the implementation effect of the ecological compensation policy? Existing research cannot address the above questions. Based on the above, this study uses the water-quality monitoring data from the Poyang Lake River Basin in Jiangxi Province and the Dongting Lake River Basin [
14] in Hunan Province from 2013 to 2018 to analyze the implementation effect of the ecological compensation policy.
2. Literature Review
Improving the quality of the ecological environment in river basins has always been an important issue for academia and governments around the world [
15]. Among the various environmental protection measures, the construction of a watershed ecological compensation mechanism is considered an important measure towards improving basin environments [
16]. The payment for cross-boundary ecosystem services is mainly based on the compensation between upstream and downstream or between regions in a market-oriented way [
17]. As an example, research conducted jointly by Russia and Lithuania concerning Kulun Lagoon found that the improvement of the water environment depends on the support of high-level government officials and the dedicated cooperation between departments [
18]. An effective way to reduce pollution is to introduce water-quality control policies by investigating the cost of transboundary pollution control and water quality [
19]. In some Asian countries represented by China, the ecological compensation mechanism is mainly constructed by administrative means [
20]. Since 2015, the Fujian and Jiangxi Provinces have taken the lead in introducing river-basin ecological compensation policies in order to significantly improve the ecological environment in the river basins [
21]. Some scholars believe that the result of implementing the ecological compensation policy by administrative order is not ideal [
22], mainly because the government’s implementation is relatively inefficient and their compensation funds limited [
23]; hence, the compensation effect cannot have great impact. However, some other scholars believe that the implementation of the ecological compensation policy led by the government can lead to significant improvement of the ecological environment in the basin [
24]. Research on ecological compensation mainly focuses on the construction of a theoretical system, the exploration of the mechanism, the compensation object, the compensation method [
25], and the determination of compensation payment [
26]. Few studies involve also post-compensation stage research, such as research on the performance evaluation of existing compensation projects, and especially research on the lack of performance evaluation of standard economic paradigms.
Several studies on the evaluation of the effect of watershed ecological compensation policies were initiated in recent years. Xu and Li conducted an empirical study on ecological compensation financial projects in Liaodong mountain areas and found that some counties, after the implementation of such policy, significantly impacted ecological performance [
27]; however, some other counties did not. Qu et al., based on an empirical study on the implementation effect of ecological compensation policy in the Chishui River Basin of Guizhou Province, found that the implementation of an ecological compensation policy can effectively promote the improvement of the ecological environment of the local basin [
28]. Wang et al. conducted an empirical analysis of the implementation effect of ecological compensation policy in Xin’an River Basin and found that the implementation of the policy was generally good, but the promotion effect on regional economic and social development was not significant [
29]. Therefore, it is necessary to design and implement the policy while accounting for improvements of the policy objectives and system. At the same time, there are five common methods to evaluate the policy effect of the watershed ecological compensation policy. The first is the
instrumental variable method (IV). This method deals with endogenous problems caused by standard econometrics [
30]; however, this method has two main disadvantages: one is the choice of instrumental variables and the other is that it may not account for the heterogeneity of research objects. The second is the
breakpoint regression (RD). Breakpoint regression is a quasi-experimental method similar to randomized controlled trials [
31]. The main idea is that when the value of the sample individual’s key variable exceeds the critical value, the individual will accept policy intervention; until then, the individual will not accept policy intervention [
32]. The third is the
propensity score matching method (PSM). This is a non-experimental method, which is an approximate experimental method with data from experimental and control groups that are not used or are not suitable for testing methods [
33]. The fourth is the
AHP fuzzy comprehensive evaluation method. This method, on the one hand, obtains subjective judgment data through expert evaluation, and on the other hand, uses mathematical methods for data processing, which can realize the unification of qualitative and quantitative evaluation [
29]. The fifth is the
difference-in-difference method (DID) that, in recent years, has been widely used in policy evaluation research, as it can effectively deal with selectivity bias [
34]. The basic idea is to allow the influence of unobservable factors, which are time independent.
In recent years, scholars have increasingly adopted the
DID method in research on policy impact assessments. For example, Yang et al. adopted the
DID method to study whether the Air Pollution Prevention and Control Action Plan promulgated by China has had a positive effect on air pollution control [
35]. Chen et al. regarded the “China Carbon Emissions Trading Pilot Policy” as a quasi-natural experiment and used the
DID method to identify the net causal effect of this environmental policy on corporate innovation [
36], finding that the implementation of this policy would significantly reduce corporate innovation in general, which is basically consistent with the causal effect of the EU Emissions Trading Scheme. Chabé-Ferret and Subervie evaluated the impact of French agricultural environmental policies on farmers’ green agricultural production and consumption [
37]. Rivers et al. estimated the policy impact of a single-use plastic bag tax in Toronto, Canada, and found that the tax increased the reuse rate of shopping bags by 3.4% [
38]. Gehrsitz quantified the positive impact of low-emission zones on air quality and birth rates in Germany [
39].
Existing research on the implementation effect of ecological compensation policy in great lake basins is in theory more qualitative, albeit with limited empirical analysis. The main methods used are the propensity score matching method, AHP fuzzy comprehensive evaluation method, etc., but these methods are not ideal for to deal with endogeneity; the DID method can effectively address this problem. Therefore, in this study we focus on the Poyang Lake River Basin, the largest freshwater lake in China, and use the DID method to evaluate the implementation effect of the ecological compensation policy. We also provide a research basis for other performance evaluations of basin ecological compensation policies.
The rest of this paper is organized as follows:
Section 3 provides a description of the study area;
Section 4 outlines the research methods and data sources;
Section 5 includes the empirical analysis of the implementation effect of the watershed ecological compensation policy;
Section 6 outlines the robustness test;
Section 7 is the conclusion and policy enlightenment.
3. Overview of the Study Area
Poyang Lake and Dongting Lake are the largest watersheds in Jiangxi Province and Hunan Province [
40], respectively. Poyang Lake is the largest freshwater lake in China, located in the northern part of Jiangxi Province [
41], on the south bank of the middle and lower reaches of the Yangtze River. The Poyang Lake River Basin includes five major water systems: Ganjiang, Fuhe, Xinjiang, Rao, and Xiuhe Rivers. The Dongting Lake is the second largest fresh water lake in China, located in the northern part of Hunan Province, also on the south bank of the middle and lower reaches of the Yangtze River. The Dongting Lake River Basin [
42] includes four major water systems: Xiangjiang, Zishui, Yuanjiang, and Lishui River. The Poyang Lake River Basin covers the whole Jiangxi Province and flows through 11 prefecture-level cities [
43], including Nanchang, Ji’an, Yichun, Ganzhou, Fuzhou, Yingtan, Shangrao, Jingdezhen and Yichun, and 100 counties under its jurisdiction. Among them, Huichang, Zhanggong, Quannan, Xinzhou, Zhushan Wuyuan, and Suichuan are the upstream counties of the Poyang Lake River Basin. The downstream counties of the Poyang Lake River Basin mainly include Xihu, Chaisang, Nanchang, Wannian, and Guixi, as shown in
Figure 1. The Dongting Lake River Basin covers the whole Hunan Province, including 13 prefecture-level cities such as Changsha, Zhuzhou, Xiangtan, and Hengyang, and 124 counties under its jurisdiction. The upstream counties of the Dongting Lake River Basin [
44] mainly include Fenghuang, Hongjiang, Shaoyang, Wugang, Ningyuan, Jiangyong, while the downstream counties of the Dongting Lake River Basin are mainly Furong, Yuelu, Changsha, Taojiang, Miluo, Huarong, and Yueyang, as shown in
Figure 2.
In addition, it should be further explained that Jiangxi Province was included in the Ecological Civilization Pilot Demonstration Zone in 2014. The pilot project was carried out in accordance with the ecological compensation policy of the whole river basin in Jiangxi Province. As the pilot project in the central region of China, it provides reference and basis for the future implementation of the watershed ecological compensation policy for other provinces. Moreover, Jiangxi Province and Hunan Province are closely adjacent, and they are very similar in terms of geographical location and economic and social development. Therefore, Jiangxi Province has implemented an ecological compensation policy for the Poyang Lake Basin, while Hunan Province has no ecological compensation policy for the Dongting Lake Basin.
7. Policy Implications
Based on the empirical results, we proposed the following four policy implications, in order to better improve the watershed ecological compensation policy.
First, we adhere to the principle of ecological priority and carry out economic activities on the premise of ecological protection. The results showed that the implementation effect of regional policies with active economic activities was lower than that of regions with weak economic activities. Therefore, it is necessary to carry out regional economic activities at the expense of the environment. To counteract the negative effects, the government should strengthen the supervision of enterprises with negative externalities, build a reasonable ecological compensation mechanism, and promote the development of the regional economy under the premise of green ecology.
Second, we should pay more attention to the ecological compensation of the downstream areas according to local conditions. Due to the geographical location, the downstream area is in an ecologically inferior position. The behavior of the upstream area has a direct impact on the ecological water quality of the downstream area. Therefore, in implementing the ecological compensation policy, the principle of “compensation according to standard” and “compensation according to actual situation” should be carried out according to the ecological environment of downstream and upstream areas, and the standard of policy compensation should be improved.
Third, the local government should take the responsibility to improve the ecological supervision of large regional administrative regions. As far as water quality jurisdiction is concerned, the main regulatory bodies are mainly concentrated in local governments, and the impact of government regulation has significant positive effect on water quality. The empirical results show that the area of the administrative region has a significant impact on water quality, and the water quality under the jurisdiction of small community is generally higher. Therefore, in policy implementation, we should strengthen the supervision of the area of large regional administrative regions, the responsibility taken by the local government rather than of pursuance of the “performance” of economic development that imposes the cost on the ecological environment.
Fourth, we should invest more manpower and capital to strengthen the monitoring of the ecological environment. Some areas of the index statistics were not complete, the detection process was challenged by insufficient monitoring, the monitoring scope was incomplete, and so on. Therefore, under the current ecological goal, local governments should increase the input of technical elements and labor factors of ecological protection, and earnestly implement the strategic goal of ecological protection as the premise and high-quality economic development as the road.