Recently, multiple departments, including the National Development and Reform Commission ("NDRC"), have jointly issued the Action Plan for Establishing the Market-based and Diversified Compensation Mechanism for Ecological Protection (the "Plan").
According to the Plan, it is expected to significantly raise the level of market-based and diversified compensation for ecological protection, further improve the market system for compensation offered for ecological protection, enable the interaction between ecological protectors and beneficiaries to be more coordinated, and turn ecological compensation into a stronger support for the ecology first philosophy and the green development, by the year 2022. The Plan states that, among nine key tasks are "improving the compensation system for resource exploitation", "optimizing the allocation of pollutant discharge rights", "making an improvement to the allocation of water rights" and "optimizing the carbon emission right offset mechanism". Among others, the Plan expressly states that, with the focus on industrial enterprises and centralized sewage treatment facilities, efforts will be made to establish the industry-based ranking mechanism on pollutant discharge intensity for regions within a province where conditions permit, whereby regions ranked at or near the bottom shall offer reasonable compensation for those ranked among the top. Meanwhile, enterprises obliged to perform contracts for carbon transactions, and entities designated to offer assistance, will be instructed to give preference to the purchase of emission reductions contributed by forestry carbon sink programs in poverty-stricken areas.