Both ecosystem service and human wellbeing development should improve human well-being through the conservation of ecosystems that provide valuable services. Although plenty of interest in using payment for ecosystem services to promote changes in the use of natural capital, there is little assessments of impacts of payment for ecosystem services program on ecosystem service provision, program cost, and changes in people’s livelihoods of program participations. Moreover, program costs and benefits to multiple stakeholders, and how they change through time, are rarely carefully analyzed. We address one of China's new ecosystem service protection and human well-being policies: the Conversion of Orchard Land-to-Forest (COF) of Southern Jiangxi Province, China and associated changes in up stream’s livelihood activities which pays farmers who opt voluntarily to cut the orange tree in order to maintain the water quality and quantity for downstream. The COF is also a landscape changes project and the objective is to reduce the water pollution, restore important ecosystem, maintain the enough water quality and quantity for downstream, for the crucial surface drinking water area that serves Guangdong province, China's important province with advanced industrialization and dense population in PRD. We utilize household survey data, hydrologic data in an integrated economic cost-benefit analysis for multiple stakeholders and shows that the COF will results in positive net benefits for improved water quantity and quality that exceed the costs of reduced agricultural output.
Results/Conclusions
The COF has an overall benefits cost ratio of 1.5, and both downstream beneficiaries and upstream providers gains from the program. However, there are significant short-run costs for local residents so that households may have difficulty participating because they lack other available resources to pay the initial costs of participating and have difficulty to find new job in cities. However, the project has produced marginally effects in poverty reduction. Household survey data show that changes in livelihood activities may offset some of the desired effects of the program through increased expenditure on agricultural fertilizers. Thus, reduction in fertilizer leaching from land use change dominate so that the program still has a positive net impact water quality. This program is a successful case of water uses paying upstream landholders to improve water quantity and equality through land use change. Program evaluation also highlights the importance of considering behavioral changes and willingness by program participants.