Does Green Credit Matter in the Effect of Payments for Ecosystem Services on Economic Growth? Evidence from Xin'anjiang River Basin.

Zhang, H.; Wu, S., and Tian, Y., 2020. Does green credit matter in the effect of payments for ecosystem services on economic growth? Evidence from Xin'anjiang River Basin. In: Gong, D.; Zhang, M., and Liu, R. (eds.), Advances in Coastal Research: Engineering, Industry, Economy, and Sustainable Development. Journal of Coastal Research, Special Issue No. 106, pp. 435–439. Coconut Creek (Florida), ISSN 0749-0208. Payments for ecosystem services (PES) can provide financial incentives to the protection of the watershed environment in upstream regions, and green credit is one of the most popular incentive measures. It is necessary to understand the effect of green credit on economic development, especially where has a possible sacrifice because of environmental protection. Taking the Xin'anjiang River Basin as a case, the synthetic control method (SCM) was used to analyze the effects of the PES project implemented in Anhui Province from 2012 on its per capita gross domestic product (GDP). The results showed that the PES project had a negative effect on per capita GDP in Anhui Province, which caused an average reduction of 679.144 Chinese yuan (CNY)/person. Moreover, the average reduction comes to 440.050 CNY/person with the participation of a reversed predictor of green credit, and the green credit average offsets the negative effect of the PES on economic growth by 1% a year. Finally, evidence shows that technical improvements and industrial structure adjustments are the two main ways for economic growth, which can be promoted by green credit. Attention should be paid to balance the economy, ecology, and society in the process of development. Additionally, green credit is of great value when applied to help alleviate the pressure of government finance. [ABSTRACT FROM AUTHOR]