Distribution of benefits holds key to biodiversity governance

Biodiversity conservation presents a unique challenge: while the costs are often borne locally, the benefits, such as climate regulation and water conservation, extend to society as a whole. This situation illustrates the concept of the tragedy of the commons in economics, where those who provide ecosystem services cannot charge the beneficiaries, potentially leading to an undersupply of these services. When those protecting biodiversity receive insufficient long-term returns, conservation efforts increasingly depend on government spending and moral appeals, which can weaken incentives and risk a return to harmful practices.

Across China, from south to north, various industrial models are addressing the same question: how can the benefits of biodiversity conservation be returned to those who protect it?

In Sanggou Bay, Rongcheng, Shandong province, seagrass beds and benthic species once faced severe decline. Since 2018, restoration efforts have significantly boosted the value of kelp, sea cucumbers, and abalone. Meanwhile, in Shiti village, Yingjiang county, Yunnan province, a decade of bird protection efforts has seen the per capita disposable income surging from under 2,000 yuan ($299.73) in 2014 to over 19,000 yuan by 2024.

These approaches prioritize equitable distribution alongside conservation, using rights confirmation, pricing and distribution to generate economic returns from ecosystem services.

Rongcheng has incorporated benefit distribution into its agreements. A grid-based management system ensures that those who maintain the beds share the benefits, creating a closed loop of restoration, carbon sequestration, trading, and further restoration.

In Yingjiang, a cooperative model allows all villagers to hold shares, with portions of gross revenue allocated for dividends and infrastructure.

Many villagers have become bird guides, identifying over 150 species, while homestays cater to birdwatching enthusiasts.

With returns benefiting the community, biodiversity conservation has transformed from an external constraint to an internal motivator.

In Shandong, fishermen voluntarily clear abandoned nets from seagrass beds, while in Yunnan, villagers patrol hornbill nests.

Fair and sustainable distribution of benefits relies on institutional design. China's approach is encapsulated in a "1+5" toolkit: one government-led institutional framework, plus five tools — planning and assessment, ecological product certification, accounting and monitoring, market-based transaction and ecological finance, and community co-governance and benefit-sharing. This toolkit forms a progressive chain from planning to trading and from accounting to distribution, where any weak link can hinder returns.

For instance, in Luoyang, Henan province, the conservation of the city's signature peony germplasm is legally protected.

Germplasm banks preserve wild and traditional varieties, while new varieties are integrated into the industry chain, with brand dividends and cultural tourism revenue reinvested into peony cultivation and conservation, enhancing the overall yield.

Earlier this year, the annual peony culture festival drew over 18 million visitors and generated about 15 billion yuan in tourism revenue, shared among villages, growers, and scenic areas.

These tools are integral to China's ecological civilization framework, not just local innovations. The country has implemented a nationwide functional zoning strategy and established ecological conservation "red lines" to protect vital ecological areas.

The ecological compensation mechanism now covers major ecosystems such as forests, grasslands, wetlands, deserts, and marine areas, with central fiscal transfer payments to key ecological function areas steadily increasing.

Reforms in the property rights system for natural resource assets have advanced the confirmation and registration of rights, establishing a foundation for benefit distribution. The green finance system is evolving with innovations such as eco-loans, carbon sink insurance, and green bonds, making ecological assets financeable.

Together, these institutions create a closed loop of "rights confirmation-accounting-trading-distribution", allowing protectors to earn stable returns through various channels. These tools convert improved ecological conditions at the products' origin into market recognition, rather than "killing the goose that lays the golden eggs".

Rongcheng's experience shows that value gets enhanced not only from geographical indications but from improved water quality, sediment, and feed following seagrass bed restoration. Indication and traceability help the market recognize the difference in quality. While calculated valuations can aid decision-making, they should not be mistaken for actual fiscal revenue, as blurring this distinction could jeopardize budget plans and benefit distribution.

Income distribution from marine biodiversity is more challenging. Historically, marine genetic resources and their digital sequences in areas beyond national jurisdiction have operated under a "first come, first served" approach.

The 2023 BBNJ Agreement, namely the Agreement under the United Nations Convention on the Law of the Sea on the Conservation and Sustainable Use of Marine Biological Diversity of Areas beyond National Jurisdiction, aims to change this by introducing a benefit-sharing mechanism for genetic resources, featuring an access and benefit-sharing committee and a clearing-house mechanism.

However, fair distribution faces the challenge of disparities in resource access, research capacity and industrial support.

China's transition from participant to contributor is significant. Xiamen's bid to host the BBNJ secretariat aims to enhance China's role in rule-making and implementation, advance the implementation of the benefit-sharing mechanism, secure fair rights for developing countries and prevent "freedom of the high seas" from being dominated by the technological patents of a few nations.

China's approach to biodiversity conservation, which is nature-based, industry-integrated, and benefit-sharing, offers valuable lessons for the Global South through South-South cooperation.

China can provide two key public goods: operational methodologies and standards that lower participation barriers, and solutions that integrate conservation with industry to deliver tangible community benefits, creating a replicable model for others to follow.

Ensuring that biodiversity protectors receive benefits is crucial for sustaining conservation. China's experience shows that institutional innovation combined with market mechanisms can make ecological conservation intrinsic to industrial development.

If Xiamen's bid to host the BBNJ secretariat succeeds, it could advance the global benefit-sharing mechanism and promote adaptable solutions for Global South countries.

The authors are assistant professors at the Research Institute for Eco-civilization, the Chinese Academy of Social Sciences.

The views don't necessarily reflect those of China Daily.

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