Lishui uses new measure to harness fiscal value of nature
Lishui city – located in East China's Zhejiang province – is using a new measure called Gross Ecosystem Product, or GEP and has in recent years reportedly used it to roll out financial products, designed to maximize the value of its ecosystem.
GEP is being used in China to guide investments in ecosystem conservation and restoration. Experts have said that to achieve sustainable development, there is a pressing need to move beyond conventional economic measures like gross domestic product or GDP. GEP summarizes the value of the contributions of nature – such as rivers, grasslands and forests – to economic activity.
Now Lishui has reportedly become the country's first pilot city to use the value realization mechanism of its natural products.
Recently, the city's Baishanzu National Park received a loan for 10 million yuan ($1.55 million) from the Bank of China Lishui Branch, based on the park's GEP indicators. It is believed that the loan will inject strong financial support for the park's development.
The loan, which took only three days from application to approval, is the first GEP loan issued by the bank in Zhejiang province.
The BOC Lishui Branch reportedly issued the GEP loan for local industries covering agriculture, forestry, animal husbandry and fishery products, ecological energy, water and soil conservation, as well as air and water purification, among other things.