China's forest ecosystems are facing challenges due to monoculture practices and rapid economic development, leading to biodiversity loss, soil erosion, and flash floods. In response, the World Bank approved a $150 million loan in 2019 for the Forest Ecosystem Improvement in the Upper Reaches of Yangtze River Basin Program. This initiative was implemented in Sichuan Province as China's first Program-for-Results (PforR) operation in the forestry sector.
Professor Lu Yuanchang, a forestry expert and World Bank consultant, stated that "the goal of our program is to achieve a vibrant, stable, healthy, and high-quality forest ecosystem that is multifunctional and sustainable."
The program began in May 2020 across 35 counties in Sichuan Province. It employed various methods such as afforestation, reforestation, natural forest regeneration, landscape protection, and rehabilitation of degraded forests. These efforts aimed to create a sustainable forest ecosystem.
Community engagement played a crucial role in the program's success. Over 10 thousand farmers received technical training and employment opportunities. By December 2023, 85 percent of households participated in the program with women comprising 52 percent of direct participants.
Li Zhengjiu from Dongxi village shared how the project improved their livelihoods: “Most of us now work on the forest farm...It has changed our lives.” Farmers were given autonomy to select tree species suitable for both ecological and economic needs. Taipei Lei from Guanba village explained their decision-making process: “We planted medicinal trees such as huangbo, duzhong, and ginkgo.”
The program also focused on building institutional capacity for sustainable forest management by developing incentive-based ecological compensation mechanisms and establishing a market-based inclusive forest carbon trading framework. A significant milestone was achieved with the approval of the Sichuan Inclusive Forest Carbon Offset Methodology.
Chen Xiaozhong, director of the Sichuan Provincial Forestry Administration noted that “the program has provided guidance...as well as fostered talents for Sichuan’s sustainable forest management.”
By December 2023, afforestation covered 130,000 hectares with mixed forests increasing from six percent to sixty-two percent province-wide. The improvements enhanced water-holding capacity and promoted soil conservation while contributing significantly to global carbon sequestration efforts.
A GHG accounting assessment estimated that over thirty years this initiative would generate approximately 23.53 million tCO2eq of carbon sequestration.
The success of this initiative has inspired similar approaches nationwide through programs like the National Reserve Forests Program (NRFP) which aims to leverage US$11.5 billion for further carbon sequestration efforts.