The National Development and Reform Commission (NDRC) announced on May 22 that, following deliberation and approval by the Central Committee for Comprehensively Deepening Reforms and agreement by the State Council, the NDRC and the Ministry of Finance have jointly issued the "Implementation Plan for Promoting Ecological Comprehensive Compensation" (referred to as the "Plan").
Regarding the arrangements in the Plan for expanding funding channels for ecological protection compensation, an NDRC official stated in response to media inquiries that currently, funding for ecological protection compensation in China primarily relies on financial investments from various levels of government. The sources of funding remain relatively singular, with underdeveloped market-based financing channels and low participation from social capital. Over-reliance on vertical fiscal funds makes it difficult to fully meet the growing demands for ecological protection, leaving significant room for improvement in incentivizing compensation for ecological protectors.
"The Plan adheres to the principles of government leadership, social participation, and market regulation. It proposes exploring the establishment of an ecological protection compensation fund, encouraging and guiding enterprises and other social capital closely related to natural resource utilization to actively contribute to the fund. Relevant departments, such as those overseeing natural resources, will provide land and other essential guarantees for projects supported by the fund in accordance with regulations. Additionally, the Plan calls for guiding Financial Institutions to develop financial products and services such as green credit, green insurance, and green bonds linked to resource and environmental factors, under the premise of legality, compliance, risk controllability, and commercial sustainability. These products and services will provide financing support for eligible ecological industry projects in accordance with market-oriented and rule-of-law principles," the official stated.
The official further noted that the implementation of these policy measures will, on one hand, provide financial support for eligible ecological industry projects, and on the other hand, offer institutional safeguards for enterprises to fulfill their social responsibilities. By leveraging the combined efforts of an effective market and a proactive government, the aim is to actively broaden the channels for raising compensation funds and promote the healthy operation of the ecological protection compensation mechanism.