BIODIVERSITY WORKING GROUP
FIRST REPORT OF PHASE TWO
JULY 1997, BEIJING¡¡

1. INTRODUCTION ¡¡

¡¡According to the decisions of CCICED, BWG started its second phase of work from 1997. In line with the requirements of the secretariat of CCICED, BWG would make some changes to its Chinese and international membership, and make up its working plans for the coming years of phase two.

¡¡ A preliminary workshop was held from 3-4 April to discuss these matters and initial plans were made. As a result of that workshop, decisions were made to hold a BWG Meeting from July 10-15 in Huairou to deal with these issues in more details. Following the success of the sectoral meetings between BWG and the Ministry of Forestry, National Environment Protection Agency, Ministry of Agriculture, and other sectors held last year, it was also decided to continue such sectoral meetings this year. Such a meeting was therefore held for two days during the course of the BWG Meeting. The meeting has turned out to be a success. Membership has been changed according to the needs of the work of BWG.

¡¡ 2. MEMBERSHIP ¡¡

¡¡There has been a reformation of the group since Phase I of CCICED with more than half the members being changed on both the Chinese and international sides. The following members are now proposed for approval by the Council serving the Phase II of BWG . ¡¡

Wang Sung Institute of Zoology, Chinese Academy of Sciences (Co-chair)
Jin Jianming National Environment Protection Agency
Zhao Shidong Commission for Integrated Survey of Natural Resources, Chinese Academy of Sciences
Li Dianmo Institute of Zoology, Chinese Academy of Sciences
Ma Keping Institute of Botany, Chinese Academy of Sciences
Qing Jianhua Ministry of Forestry
Zhu Mingyuan First Institute of Oceanography, State Oceanic Administration of China, Qingdao ¡¡

John MacKinnon DICE, Kent University UK (Co-chair)
Robert Hoffmann Smithsonian Institution, USA
Peter Raven Missouri Botanical Garden
Andrew Smith Arizona State University & IUCN
Jeff McNeely IUCN - Biodiversity Programme
Dan Viederman WWF - China Project Office
Patrick Dugan IUCN - Program Coordination & Regional Support

¡¡ Shadow Ministers:
¡¡¡¡Claude Martin WWF
¡¡¡¡David McDowell IUCN - The World Conservation Union
¡¡¡¡Chen Yiyu Chinese Academy of Sciences

¡¡ 3. TERMS OF REFERENCE OF THE BWG.

¡¡The current terms of reference are:-

¡¡ ¡¡3.1. Create a fertile forum for exchange of ideas and approaches whereby China has access to wider experience beyond her borders and where managers can network with scientists and technicians to solve issues of policy, strategy and action in the field of Biodiversity Conservation.

¡¡¡¡3.2. Provide a mechanism whereby priority needs identified by scientists and technicians can be brought to the attention of relevant leaders and decision-makers through a multisectoral forum.

¡¡¡¡3.3. Provide an independent view of China's biodiversity and advise the government on areas of concern or sectoral failure.

¡¡¡¡3.4. Provide advice and assistance as needed in China's participation in international biodiversity conventions and programs to ensure that China gets maximal benefit from these mechanisms and also presents the most favourable international image of its considerable biodiversity achievements.

¡¡¡¡3.5. Initiate studies to demonstrate the contribution of biodiversity conservation to regional economic development in selected ecosystems in China and identify both factors that threaten such systems and appropriate remedies to ensure the sustainability of such benefits. ¡¡

It is felt that the terms of reference may need revision at a future date but that they remain adequate for our immediate work programme.

¡¡ 4. SUMMARY OF PROJECT ACTIVITIES OF BWG

¡¡ 4.1 Estimation of Economic Value for Forest (Agriculture) Resources in Xingshan County, Hubei

¡¡ The field studies undertaken by BWG last year to measure the economic benefits of biodiversity in a selected study area in Hubei Province have been completed. A GIS model of the Xingshan county was created to hold information on soil-type, altitude, slope class, vegetation cover and drainage systems to calculate expected levels of soil erosion, water run off, evaporation and soil retention of water. This model was used to calculate the improvement in water flow (lowered seasonality) caused by the contribution of natural vegetation.

¡¡ Additional data was collected on the value of direct harvest of forest and agricultural products using a combination of county statistics and village household questionnaires. The following tables summarise the results of the analysis. ¡¡ ¡¡

unit: RMB million yuan

¡¡4.1.1. Direct economic value:

¡¡¡¡Value from forestry includes: timber, fuelwood and other forest products
¡¡¡¡Value from plantation includes: agricultural crops such as rice and wheat, other crops with economic value such as vegetables.
¡¡¡¡These figures are the average figure of the statistics for 1993 and 1994 issued by the county government.

¡¡ 4.1.2. Indirect economic value calculation

¡¡¡¡(A) Soil protection
¡¡¡¡* Loss of land
¡¡¡¡Average erosion level of deforested soil in Xingshan = 47m2/ha.
¡¡¡¡Total erosion quantity = 6517x103 tons/year
¡¡¡¡Suppose average surface soil depth = 0.5m
¡¡¡¡Price of land = 407.8 yuan/ha.
¡¡¡¡Total economic value for decreasing lost land = 407.8 x 103 yuan/year
¡¡¡¡*Loss of fertility

¡¡(B) Water conservation
¡¡¡¡¡¡Water conservation value of forests = (precipitation - evaporation)¡Á(price of water)¡Á(contribution rate of forests)
¡¡¡¡¡¡Calculated figure for Xingshan County: water conservation value is 95 million yuan.

¡¡ (C) Contribution to power generation
¡¡¡¡¡¡Value of forests¡¯ function in regulating runoff = (efficiency of forests in regulating runoff)¡Á(total power output of Xingshan County per year)¡Á(price of electricity)
¡¡¡¡¡¡Calculated figure for Xingshan County is 467 million yuan.

¡¡ 4.1.3. Global benefits
¡¡¡¡¡¡Carbon fixed and supplying oxygen
¡¡¡¡¡¡Supplied oxygen by one ton dry material = 1.2 tons
¡¡¡¡¡¡The total growing dry material in Xingshan = 79.3¡Á103 tons/year
¡¡¡¡¡¡Economic value of supplied oxygen by forest in Xingshan County = 1056.4 million yuan/year ¡¡

The figures show that the largest direct use of forest is for firewood collection and that the total direct harvested production from the forest is worth only about 20% of the combined production of forestry, agriculture and animal husbandry. The figures calculated for the value of indirect benefits are much larger with the contribution of forest to hydropower production being more than ten times the value of forest production. This figure is based on currently generated electricity of the stations inside Xingshan county plus the contribution towards Gezhouba dam. The figure for the contribution of vegetation to increased hydropower will rise to almost 2 billion RMB, when the Three Gorges dam comes into production.

¡¡ The figures show that there would be an enormous financial reward in not only not allowing any further opening up of the forest area, but in actually closing forest to further improve its water catchment function. This could be achieved by reducing the dependence of local people on firewood by providing subsidised electricity and also using the availability of electricity to generate new industry and forms of employment to absorb the 100,000 people who will be displaced when the Three Gorges dam rises. In contrast, the plan of clearing new sites for planting orchards (currently being considered as a solution to the resettlement problem) would make minimal contribution to the overall economy.

¡¡ 4.2 Sustainability of Wildlife Use in Traditional Chinese Medicine

¡¡ A project to evaluate the sustainability of wildlife use in traditional Chinese medicine through investigation of six markets and questionnaires to wildlife departments, TCM manufacturers and companies was undertaken during May-July of 1996. The results of this study are as follows:

¡¡ A total of 44 types of animal items were found in this study, mainly consisting of mammals (43.2%), invertebrate (27.3%) and reptiles (18.2%). These animal items involve 65 species, 26 (40%) are included in protected species lists of relevant legislation;

¡¡ Fifteen animal items are subject to significant use, 12 are covered by relevant legislation. If factors of market price, purchase trend and annual consumption by TCM manufacturers are take into account, musk deer, pangolin, viper, etc. are the most severely affected species by TCM;

¡¡ Comprehensive captive breeding operations for 13 taxa are available whereas market orientation of products thereof and breeding success of these operations need to be further reviewed;

¡¡ The following recommendations are put forward based on the findings of this study: ¡¡

Immediate attention is called for to implementation and enforcement of current legislation pertaining to wildlife trade for TCM use so as to review the wide availability of protected endangered species in markets and flow of wildlife specimens into China from its neighboring countries;

¡¡ There is a need to review the justification of continued use of Category I protected species in TCM or otherwise to ensure mechanisms of control are in place over this continued use;

¡¡ To introduce limitation mechanisms over the use of exhausted populations of musk deer, pangolin, etc. through appropriate measures taken by State Administration of TCM or TCM industry itself;

¡¡ Continued efforts are to be made towards captive breeding of medicinal wildlife species, the demand of which is primarily met by their wild populations;

¡¡ The National Protected Wildlife Species List under the State¡¯s Wildlife Protection Law needs to be revised based on its present status of their wildlife population and threats, for instance£ºsome snake species such as viper should be included in the List so as to afford adequate protection through legal basis.

¡¡ 4.3 Sectoral Meetings:

¡¡ Sectoral meetings of BWG with Ministry of Forestry (MOF), and other participants from National Environmental Protection Agency (NEPA), Ministry of Water Resources and State Oceanic Administration. ¡¡ Coordination among the various governmental agencies in China changed with responsibilities for different natural resources (forests, soil and water, marine resources, etc.) is an essential component of effective ecosystem management to preserve China¡¯s rich heritage of biological diversity. The opportunity for BWG to meet with agency representatives from these different section greatly facilitates such coordination and cooperation. It is planned to continue holding about one such meeting per year but to focus discussion on one or two key issues rather that become too general.

¡¡ Memorandum of Conclusions of the Sectoral Meeting between BWG,
¡¡MOF and other Agencies

¡¡¡¡Following the successful sectoral meeting held between BWG and MOF in 1996 and in line with the conclusion that such dialogue should be maintained and extended, a second sectoral meeting was held in Huairou on 11-12 July, 1997.

¡¡ A wide range of topics were discussed between the members of BWG, representatives of MOF and participants from NEPA, Ministry of Water Resources and State Oceanic Administration. Information and views were exchanged in a frank and friendly atmosphere and the following conclusions were reached at the meeting:

¡¡ 4.3.1. The role of forests in water control ¡¡

Data from the Hubei watershed studies in Xingshan county were examined by the participants (See BWG minutes for more details). These clearly demonstrate conditions that are quite general in China - namely that the indirect values of forest protection for safeguarding watersheds, conserving soil and improving hydropower production and climate regulation are huge in scale and generally much larger than the economic value of timber and other direct forest products. Protection of such catchment forests must be stressed and the area and quality of catchment forests increased. Existing forests should be more effectively managed, including strictly forbidding felling in native forests needed for ecological functions. Felling of forests should only be done after EIA.

¡¡ At present, there is still not enough emphasis placed on the role of forests in protecting water catchments, thus the occurrence of both floods and droughts is increasing. Highest importance must be put on the irreplaceable functions of forests in the whole life-support system, the function of hydrological regulation and in keeping the ecosystem in harmonious ecological balance. So long as the protection function of forests is under-recognised and under-rewarded local farmers will be forced to continue destroying and degrading such forests at great loss to other sectors.

¡¡ Some major water conservation projects have failed because inadequate attention was paid to the environmental conservation in their catchments. These mistakes must not be repeated. Water conservation projects must include full attention to entire catchments and include budgets for catchment restoration and protection. The water conservation project is only as good as the mountains it collects from and the mountains are only as good as their forest cover.

¡¡ There is an urgent need to conduct a national review of the effectiveness of the existing reservoirs in China. Cooperation between the sectors of forestry, agriculture and water conservation should be strengthened, to effectively protect forest and grass vegetation, water resources and maximize contribution to the country¡¯s sustainable development. This is the primary need of biodiversity conservation. NEPA should exert its function of coordination in three ways: 1. Actively promote comprehensive policy making; 2. Formulate regional development plans and wise use of natural resources; 3. Prevent the possible occurrence of damage to the ecosystem, through application of EIA.

¡¡ 4.3.2. Quality of Reforested Ecosystems

¡¡ The representatives at the meeting feel that there are some practical problems with the quality of artificial plantations; e.g., too much monoculture, poor undergrowth, etc. The reason for these inadequacies are largely due to shortage of funds and the tree selection preferences of farmers. For instance only 6 RMB is paid for the planting of each mu (1/15 ha) in the forest belt project of the middle and upper Changjiang.

¡¡ Ministry of Forestry recognises these problems and is now increasing the proportion of mixed stem plantations year by year. Most new project plans must include at least 30% planting of mixed plantations, otherwise they will be rejected. In future more attention should be placed on the indirect benefits derived from planted forests. More emphasis should be placed on natural reforestation methods and the State should provide more realistic funding to guarantee the quality of reforested areas.

¡¡ The participants welcome the great improvement in the reforestation plans of Ministry of Forestry and hope that an increasing proportion of land will be planted with mixed plantations of native species to provide maximal water catchment function, as well as protecting more biodiversity. Improvements can be made to site preparation in afforestation, in order to stop further soil and water loss. EIA should also be carried out in engineering afforestation projects, and environmental management should be carried out.

¡¡ 4.3.3. Problems with Nature Reserves

¡¡ As one of the main management agencies for nature reserves, the MOF is responsible for managing most of China¡¯s nature reserves. In order to meet the needs of sustainable national economic development, emphasis should be laid on not only the increase of the number of nature reserves and the expansion of nature reserve area, but also the distribution of nature reserves. For examples, nature reserves have been established in western China to protect biodiversity in that region.

¡¡ The forestry sector has also recognized that the enhancement of the quality of nature reserves is a major problem waiting to be solved. The main obstacle to the solving of this problem is that the construction, management and development of nature reserves needs a lot of investment, although the MOF has tried its best by providing preferential policies. In the development of nature reserves, the MOF hopes to establish a progression of financial benefits to the nature reserves for their protection work.. Yet in fact, whilst it is usually the nature reserves that are carrying out the tasks of protection, management and production, the beneficiaries are usually enjoying the indirect benefits free of charge or with very low fees. This lack of reward seriously impedes the development of nature reserves.

¡¡ Considering these facts, the MOF proposes that the investors and beneficiaries (sectors of water resources and agriculture) should further cooperate to establish a reinvestment system to promote the development of nature reserves, and enable nature reserves to attach more importance to the indirect economic and ecological benefits of nature reserves in regulating climate, stabilizing agricultural production and conserving water. ¡¡ MOF recognises the continuing need for support from the scientific community with respect to inventory and monitoring of biodiversity resources and welcomes scientists to help collect data in the nature reserves. ¡¡ Biodiversity management agencies like MOF/DNR should strive to select motivated staff for nature reserves, rather than depute. This will contribute to continued collection of routine data, as well as all other aspects of reserve function.

¡¡ 4.3.4. Developing funds to pay for forest protection work.

¡¡ Over the years, the input from the Chinese government in the forestry sector has been far from being able to satisfy development needs. With progress of the national economy and establishment of the market economy system, the shortage of investment in forestry has become daily more prominent. The lack of funds for development of ecological forest systems is even more serious. The variety of indirect benefits of forests cannot be compensated, the owners of ecological and public welfare type forests will continue to be deprived of economic benefits. Thus, we propose the establishment of a compensation fund for forest ecological system, collecting fees from the beneficiaries of such forests. Only with the existence of a normal compensation mechanism can there be a guarantee of enough funds for the development of a continually improving forest ecosystem, which will then be able to function more effectively in enhancing China¡¯s environmental quality and promoting national economic development.

¡