When money meets tradition: How new cash incomes could be risky for a vulnerable ecosystem

Economic incentives to simultaneously address poverty and biodiversity loss may fail if they do not align with local values or norms. Grazing livestock across the Tibetan Plateau's vast but fragile grasslands is often characterized as the area's primary driver of habitat degradation. China's grassland restoration policy provides eco-compensation subsidies for herders, with the assumption that providing extra cash income will help alleviating grazing pressure. We investigated potential impacts of this supplementary income, in combination with caterpillar fungus, a major local cash income source, on the pastoral livelihood on the Tibetan Plateau. Through field livestock census in seven communities and household livelihood interviews with 153 households we found that at both household and valley levels, eco-compensation didn't have the intended effect of reducing grazing pressure, while caterpillar fungus income has significant positive relationships on grazing intensity. Meanwhile, we found significant decrease of above-ground plant biomass after policy implementation was linked with low-elevation pastures with most intensive grazing, which indicated a negative impact of grazing on grassland condition at our study sites. Further, based on herdsmen's perceptions on different cash income sources we suspected those non-pastoral incomes might have even subsidized pastoralism. We suggested future economic incentives related to grassland restoration should be more targeted towards villages with low cash income and overgrazed grasslands, with clearly stated responsibilities and obligations, instead of standardized cash payment.