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Chen Shaoqiang, Qin Fengqin

Research Report No. 74 (Total No. 2316)

Abstract

Ecological compensation is China’s reform move to enhance ecological conservation. Both central and local governments have issued a series of fiscal policies for ecological compensation, but the academic research on fiscal theory of ecological compensation is manifestly inadequate. The authors attempt to study the fiscal ecological compensation from the dual identity of state owners and public managers according to China’s national conditions. As the representative of state owners, the government is endowed with property rights as an owner of state-owned assets. It collects part of dividends from SOEs as an owner of natural resources, raises the use funds from some mining enterprises entitled to prospecting and mining in the form of non-tax revenue such as prospecting and mining rights, and supports national ecological security zones and important ecological functional zones through fiscal subsidies and transfer payments. Endowed with public power by its social manager identity, the government should be responsible for resource allocation, fair distribution, supervision and management, and so on. Alongside this logic, this paper summarizes China’s practices of fiscal ecological compensation, and streamlines theoretical and practical problems to be addressed in the future.