“Eco-compensation system”

the decision to established an eco-compensation system was made by the 18th CPC Central Committee at its Third Plenary Session. The system aims at preventing damage to the environment, and enhancing and promoting ecological conservation and protection. It targets those involved in business and other activities, including production, and exploitation and use of natural resources, that have or might have negative environmental impacts. It represents a new approach to environmental stewardship that relies on market-based mechanisms and a legal framework to promote protection and restoration of ecosystem services.

The eco-compensation approach can be understood in both a broad and a narrow sense. Broadly speaking, it involves compensation for environmental pollution or for damage to ecosystem functions. In a narrow sense, it refers specifically to compensation for damage to ecosystem functions and their values.

The Chinese Government will implement the “polluter pays” principle to make those responsible for producing pollution and benefiting therefrom responsible for paying for the damage done to the environment. Efforts will be stepped up to improve the compensation mechanism for key ecosystem function conservation areas and promote the establishment of horizontal eco-compensation programs among regions.