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Challenge

Shandong is a coastal province in the East China region. In 2009, it had a low forest cover of only 13.4 percent, ranking as the 22^nd among 31 Chinese provinces, municipalities and autonomous regions, with total forest area of 2.54 million hectares. The province suffered from frequent droughts and floods, as well as serious soil erosion and desertification. This not only affected land productivity and people¡¯s living conditions, but also continued to degrade the natural resource base in large areas of Shandong.

In the 1990s, Shandong¡¯s forestry sector focused on the expansion of industrial plantations to increase timber production. Monoculture¡ªthe practice of growing a single tree species¡ªwas widespread. Among the consequences were the increase in pest incidences, falling productivity, and lost biodiversity.

The degraded mountains and coastal areas produced little ecological, environment and economic benefits. However, afforesting (establishing a forest in an area where there was no previous tree cover) these areas is very challenging. The mountain slopes are steep, infertile, eroded and drought-prone. The coastal sites are wind-swept and highly saline, have a high water table, and experience high levels of evapotranspiration. Very few tree and shrub species can survive in such environments.

Approach

The Shandong Ecological Afforestation Project aimed to support the provincial target to develop around 786,000 hectares of ecological afforestation in the period of the 12^th Five-year Plan (2010-2015), and a longer-term goal to increase the province¡¯s forest cover to 23 percent by 2020.

The project focused on the revegetation of degraded mountainous areas and the establishment of a protected forest system in saline coastal areas to use forests to help control erosion, conserve biodiversity and sequester carbon, and to develop a stable forest system resilient to the impacts of climate change.

The project developed and demonstrated effective afforestation models for environmentally degraded areas, and in doing so, promoted the shift from monoculture plantations toward mixed, multistory planting for ecological restoration. Non-commercial species were planted on upper slopes, while commercial tree crops were included on lower slopes to generate incomes for the local farm communities.

The project adopted a ¡°demonstrating by doing¡± approach to help convince farmers and government decision makers that ecological afforestation was a viable way of restoring ecological balance in degraded areas. Training, technical back-up, research and extension were considered critical to building farmers¡¯ capacity in afforestation, particularly in adopting new technology, and strengthening their interest in the project.

Results

Implemented in 28 counties in Shandong Province between 2010 and 2016, the project helped:

• Plant trees and shrubs on 36,897 hectares of highly degraded hillsides, which increased vegetation cover from 16 percent to about 90 percent, reduced soil erosion by 68 percent, improved water retention by 30 percent, and enriched biodiversity by 40 percent.
• Plant trees and shrubs on 30,018 hectares of saline coastal areas, which increased vegetation cover from 7 percent to more than 66 percent, and reduced soil salinity by 68 percent.
• Plant mixed-species trees and shrubs along 2,150 km of canals and roads to provide protection from wind erosion.
• Develop and extend 13 afforestation models, 12 new technological packages, and 25 technical standards and regulations,
• Increase the number of species in nurseries from 15 to 50.
• Establish 380 model forests in nine counties.
• Generate incomes for 26,556 farm households through commercial tree crops such as fruits, nuts and tea, and business activities in saline areas such as mushroom growing and poultry raising, and create additional employment in tree planting and tending for the local communities.
• Provide training to all the farmers and project staff involved in the project, enhancing their technical capacity in planting and forest management.
• Contribute to the sequestration of the equivalent of about 12 million metric tons of carbon dioxide (CO₂) over the project¡¯s 30-year lifetime, and generate useful data on cost-benefit analysis on the carbon sequestration potential in project areas. This improved Shandong¡¯s readiness to enter the emerging carbon trading market in China.

Bank Group Contribution

ľ¹ÏÓ°Ôº provided an IBRD loan of $60 million to this $162 million project. In addition, having been involved in forestry development in China for over 20 years, the Bank was able to tap international and national experience in environmental forest management to help tackle the challenges associated with the afforestation of marginal lands, and to design programs that improved the environment and offered income-generating opportunities to people living near afforested areas. As Shandong had limited local experience in the establishment of forests for environmental purposes, the Bank¡¯s role was crucial to success by introducing new technology, and facilitating access to international experience.

Partners

The Shandong Provincial Government provided strong leadership for project implementation and problem solving. A provincial project leading group headed by a vice governor ensured that the project¡¯s technical design was followed, implementation was kept on track, and adequate funding was provided. Project management offices at provincial and county levels were responsible for carrying out project activities and meeting required quality in the field. In addition, a technical support panel was set up to provide technical assistance and training, ensuring that project technical requirements were fully understood by local forestry staff and farmers and new technologies were adopted. Government at all levels made great efforts to put in place the counterpart funding needed for project activities, especially when rising labor costs and an appreciating RMB created a funding gap.

Moving Forward

The project management offices at provincial, city and county levels continue to provide coordination and guidance in post-project maintenance including pest management and fire prevention and control, with technical assistance available from the technical institutions. The government provides an annual grant of RMB225 ($33) per hectare for ecological forests management. This helps ensure the continuity of the program after project closure.

In addition, returns from other activities such as thinning and pruning, sale of products from economic tree crops, and incomes from poultry and ecotourism should help sustain project activities over the longer term.

The afforestation models developed under the project have been scaled up with 84,000 hectares of mixed trees and shrubs having been planted outside the project area. These models and the relevant technical guidelines have been included in the provincial 13^th Five-Year Forestry Development Plan (2016-2020).  Project experience has also been shared with peers from 20 other provinces.

Beneficiaries

Zhifang Village, with 935 residents, is situated in a limestone mountain area. The Dahai Mountain to the south of the village was barren until 2010, when it was reforested using a mixed-species planting model. Walnut trees were planted on 40 hectares of lower slopes. This has generated an annual revenue of RMB1.8 million (more than $260,000) for the village, with per capita income increased by RMB1,925 (about $280) a year.

Hanjiagou Village has 131 households with a total of 435 people. In 2013, helped by the project, the village developed a seven-hectare tea plantation that created over 800 person/years of employment. Tea-leaf pickers, mostly women, can earn an additional income of more than RMB3,000 a year (about $436). The annual revenue of the tea plantation is estimated at RMB1.42 million (more than $206,000).