Cost‐Effectiveness of Land Restoration Policies for Carbon Neutrality: Evidence From China's Reforestation

ABSTRACT China's Grain for Green Program (GGP) represents the world's largest ecological restoration initiative, converting agricultural land to forests across 25 provinces since 1999. This study evaluates the cost‐effectiveness of the GGP in contributing to carbon neutrality goals through a comprehensive analysis of three key provinces: Shaanxi, Gansu, and Sichuan. Using multi‐temporal satellite datasets including MODIS forest‐area data (2001–2023), NDVI measurements (2000–2023), ESRI land‐use/land‐cover data (2017–2023), canopy‐height maps, and above‐ground biomass estimates (2007–2022), we quantify forest‐restoration outcomes and economic performance. Results show forest area increased from 135,434.5 km 2 (2001) to 195,443.9 km 2 (2023), with NDVI improving from 0.55 to 0.632. Cost–benefit analysis reveals positive net benefits of 637.2 billion RMB nationally, with average benefits of 60.17 × 10 3 RMB ha −1 year −1 . Carbon sequestration costs averaged approximately 11 USD/tCO 2 , significantly below current carbon pricing of 13.37 USD/tCO 2 in China's national emissions‐trading system. GIS spatial analysis identifies optimal restoration zones where ecological benefits exceed implementation costs. The program demonstrates that large‐scale forest restoration can achieve cost‐effective carbon sequestration while delivering substantial co‐benefits for rural development and ecosystem services. These findings provide crucial evidence for scaling nature‐based solutions to meet China's carbon neutrality commitments by 2060.