Analysis of the People’s Willingness to Pay for Environmental Services Compensation and Its Influence Factors in the Jinhua River Basin

Natural environment provides a wide variety of goods and services to humankind. It is noted that many of these goods and services are provided indirectly;there is no direct link between the service providers and the users of the services. This is usually due to the spatial separation between the environmental service providers and the users of the services. As a result, ecosystem managers show little economic incentive to improve environmental management, thereby resulting in a degrading environment over many places and inadequate environmental services for users. As such, establishing a mechnism regarding ecological compensation plays a prominent role in improving environmental services and reducing poverty as well. Survey of the Willingness To Pay (WTP) and analysis of its influencing factors are of great help to the establishement of ecological compensation mechnism. In the present work, the Contingent Valuation Method (CVM) was adopted to evaluate the WTP of residents along the Jinhua River basin for environmental services and the Ordered Probit Model Binary Probit Model was used to analyze the influencing factors of the maximum WTP and the payment mode. Household interviews were conducted over the lower streams to obtain public recognition, WTP and payment modes for watershed services. The payment cards were utilized for the CVM survey. Design of the questionnaires basically accounted for the following five aspects: 1) understanding and recognition on the issues of watershed protection and payment; 2) the relative importance of environment and economy; 3) public support to watershed protection and WTP for watershed services; 4) public participation in watershed protection, and 5) personal and household socio-economic information. Results indicated that among those residents, 78.4% showed the WTP, with an average maximum WTP of RMB 24.87 per household/month and RMB 298.46 per household/year. It was found that the maximum WTP has a positive correlation with education levels and incomes. Relevance of environment to economy did not show significant effects on the maximum WTP, which could correspond to variations in cognition and activities as well as pick-up psychology. It was also found that the age and maximum WTP follow a quadratic functional relation. The greater the importance of education levels and environment to economy, the larger probability to pay ecological compensation taxes would be shown. People with difference genders and ages irrespective of whether they ever experienced pollution disasters and the maximum WTP have no obvious effects on residents’ choices of WTP compensation methods. For the sake of the implementation of ecological compensation, it is essential to make individual, enterprises and local government jointly involve in watershed management and decision-making to realize environmental co-construction and benefits share as well as to establish the ecological compensation system.