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• Individual property rights reduce poverty and drives forest conservation in China

The world lost a forested area the size of South Africa since 1990. In the past two decades, an increasing number of developing countries have recognized local ownership and control over forests. Meanwhile, governments adopted forest tenure reforms by devolving control of forests to (indigenous) community management, or by a further step, to household management. And some governments maintain their forests as public.

When individuals in China get well-defined and protected property rights of using forest, conservation increases. So does people’s income from the forest, in particular when they have transfer rights to their forest land. This is a more effective way to reduce poverty and increase forest conservation than when rights remain in the hands of the state, or are given to a community in general. These are Yuanyuan Yi’s findings in her dissertation in Department of Economics at the School of Business, Economics and Law, University of Gothenburg, Sweden.

The dissertation analyzes data from comprehensive surveys in 3,000 households and rural villages of eight Chinese provinces in two waves, in combination with satellite imagery on forest cover and quality. This research has produced some key messages for policymakers, in terms of the depth and extent of recognition of property rights to land and natural resources, as alternative options for common-pool-resource management for people who depend on natural resources.

The conclusions also urge policymakers to be alert in creating follow-up policies, to avoid creating a situation that allows for wealthier or more powerful households to pool their forestlands. Land consolidation into hands of the rich or the powerful has been a big concern to policy makers who aim for equal access to resources.

More importantly, the state can support the rural forest populations by creating policy that fosters knowledge and skills in forest management, and most importantly, that facilitates reallocation of forest land and resources among households. Communities also need transparent, well-functioning forestland exchange platforms and markets that are easily accessible by villagers. This could reduce transaction costs and encourage forestland rental market development.

In China’s state-owned forest sector, significant, systematic change needs to be done. In this context, the central government owns forest resources, while the state forest enterprises are owned by the local governments. Naturally, forests are massive, and it is not easy for national or regional environmental authorities to measure and monitor forest depletion. Forest managers and local governments both have a mutual interest in maximizing revenue from forests, which drives greater deforestation. If there were better and more effective policies measuring forest activities in place, that incentivize managers to conserve the resource. Examples are for example monitoring technologies such as real-time satellite imagery, or, alternatively, that forest managers’ promotions become based on performance of environmental protection equally as revenue generation.

Link to dissertation Incentives and Forest Reform: Evidence from China: https://gupea.ub.gu.se/handle/2077/52301