Hydroinformatics-driven ecological value creation framework: a study on ecosystem services Co-production in the Xinghua Duotion ecosystem, China Open Access

Climate change represents one of the most critical challenges facing the global community, with profound implications for ecosystems, societal structures, and economic growth (Azevedo et al. 2020; Wang et al. 2023). The phenomenon is driving an increase in global temperatures, accelerating sea level rise, and amplifying the frequency and intensity of extreme weather events. These changes pose significant risks to agriculture and food security while simultaneously disrupting biodiversity and degrading natural ecosystems. As such, climate change presents a formidable obstacle to the sustainable development of human society, necessitating urgent and coordinated efforts to mitigate its impacts (Wood & DeClerck 2015; Zhang et al. 2022a, b). The concept of ecosystem services (ES) serves as an excellent tool for understanding the complexity and uncertainty inherent in global environmental issues. ES first introduced by Ehrlich & Ehrlich (1981) have evolved into a key concept in ecology and ecological economics. Daily & Matson (2008) refined the definition and described them as the conditions and processes provided by natural ecosystems and species that sustain human life and well-being. These services include essential benefits such as food, water, climate regulation, and cultural services. The ES concept offers a powerful tool and analytical framework for identifying and measuring the functionality and value of ecosystems and economic systems (Martinez-Alier et al. 1998; Jack et al. 2008). However, the failure to further refine the interaction between ecosystems and economic systems remains one of the main challenges facing contemporary theories of ES (Chan et al. 2012; Setten et al. 2012; Pascua et al. 2017). Traditional research has been criticized for ignoring the dynamic interactions that exist between ecological phenomena, between humans and the natural world, and between social actors. For instance, traditional methods of ecological value assessment operate within an unsustainable analytical framework (Norgaard 2010; Turnhout et al. 2013; Heydinger 2016). Furthermore, variations in behavioral patterns among ecological participants in diverse contexts can contribute to disparities in the resilience of interactions between ecological and economic systems (Berkes et al. 2002; Retallack 2021). Therefore, broader social factors, such as culture, community, stakeholders, and other relevant entities, should be integrated into the new guiding framework.

The emergence of the concept of ES co-production reflects a growing scholarly recognition of the need to address the complexities inherent in valuing services that are often challenging to quantify within the traditional ecosystem service framework. According to the Millennium Ecosystem Assessment report, ES are defined as the benefits that people derive from natural systems and are categorized into four primary types: supporting, regulating, provisioning, and cultural services. This underscores the multifaceted benefits provided by nature while acknowledging the complex interactions between society and ecosystems. Increasingly, scholars recognize that the modern interpretation of the ES concept should transcend its function as a mere measurement tool and be understood as a collaborative production process (Alicia et al. 2022; Saeedi 2023). This process highlights how human activity influences the provision of ES through the interaction of various socio-economic factors, including natural assets, social capital, and institutional frameworks. Moreover, ES co-production encapsulates not only the human-nature interaction but also multiple aspects such as labor, technology, financial resources, and institutions (Haines-Young & Potschin 2010; Lele et al. 2013; Bennett et al. 2015; Schlüter et al. 2019). This expanded perspective provides a more comprehensive understanding of how ES are generated and sustained within socio-ecological systems.

The key objective of this study is to develop a comprehensive analytical framework for ecological value creation (EVC), grounded in the co-production of ES. This framework systematically integrates four key dimensions: EVC, ecological value management (EVM), ecological value cognition (EVCo), and ecological benefit sharing (EBS). By applying this framework to the Xinghua Duotion ecosystem in China, the study aims to examine the dynamic interactions between ecological and social systems in shaping ecosystem service value. Notably, it seeks to identify critical factors influencing ecosystem service value realization, including the allocation of rights and responsibilities, local ecological and cultural perceptions, and the effectiveness of benefit-sharing mechanisms. Furthermore, the study aspires to contribute both theoretical advancements and practical strategies for enhancing ecosystem service valuation and ecological governance, with a particular focus on informing sustainable development policies in developing countries.

Currently, the field of ES co-production lacks a systematic analytical framework (Acero Triana et al. 2022; Belaire et al. 2022). Although Fischer & Eastwood (2016) has conceptually divided ES co-production into the making of ‘things’ and the making of meaning, topics currently discussed in the field still have a high degree of dispersion, such as governance models (Olsson et al. 2004; Cook et al. 2021; Isaac et al. 2024), legal policies (Felipe-Lucia et al. 2015; Albrecht et al. 2024), local culture (Cybèle et al. 2024), stakeholders (Grêt-Regamey et al. 2008; Calderón-Argelich et al. 2021; Giacomelli et al. 2024), and benefit-sharing concepts (UN 1992; Laird & Wynberg 2008; Swiderska 2010; Akama & Becken 2018; Silva & Pinedo-Vasquez 2020). All of them have a driving significance for ES co-production. However, existing research has largely overlooked the interactions among these factors, particularly the transmission process of value creation between social systems and ecosystems.

EVM is a comprehensive approach to natural resource management designed to address the uncertainty and variability inherent in ecosystems, intending to achieve long-term sustainability within a given region or ecosystem. This approach encompasses human, biological, and natural dimensions (Pavlikakis & Tsihrintzis 2000; Link et al. 2012). EVM, at its core, involves the process of realizing the appreciation of ecological resources or products. It primarily encompasses the cyclical conversion of value through various stages: from monetary capital during the purchasing phase, to production capital during the production phase, and commodity capital during the sales phase. This process engages multiple stakeholders, including businesses, governments, consumers, and media.

EBS focuses on equitable and mutually beneficial development, ensuring that all stakeholders involved in the economic valuation and utilization of ecological resources share in the derived benefits (Schroeder 2007; Rosendal & Andresen 2011: 1908–1915; Coolsaet & Pitseys 2015). This concept emphasizes the fair distribution of gains from ecological resource development among all participating actors (Sadiq et al. 2023). In this study, the Common International Classification of Ecosystem Services (CICES V5.1) framework is employed for the analysis of ES. This standardized classification, revised during a conference organized by the United Nations Statistics Division in New York in June 2016, offers a refined approach that facilitates the aggregation and categorization of ES. The adoption of CICES V5.1 enables a more structured and comprehensive evaluation of ES, enhancing the clarity and comparability of ecosystem service assessments across different contexts.

The existing discussions on ecosystem service co-production have predominantly focused on urban ecological zones, agricultural ecological zones, aquatic ecological zones, and coastal ecological zones, with insufficient attention paid to special ecological zones (Nápoles-Vértiz & Caro-Borrero 2024). This study seeks to fill this gap by examining the Xinghua Duotion ecosystem in China, which holds considerable historical and cultural significance on a global scale. The Duotion ecosystem is a unique traditional agricultural-watershed system located in low-humidity areas adjacent to the lakes and river networks in southern China. By investigating this distinctive ecological zone, the study aims to broaden the understanding of ecosystem service co-production in areas that have received limited attention in existing literature. Similar to the raised field agriculture region of Peru, it involves excavating deep trenches or utilizing soil from small rivers to create elevated platforms for crop cultivation (Lhomme & Vacher 2002; Bai et al. 2014). Duotion ecosystems hold high cultural and ecological value, providing a range of ES, including supply, regulatory, and cultural functions. These services encompass food and livelihood security, biodiversity conservation, soil and water management, climate regulation, and landscape resources (Bai et al. 2014).

This study mainly adopts the snowball sampling method and semi-structured interviews (Table 1). Semi-structured interviews are advantageous for providing clear prompts for interviewers while allowing ample space for interviewees to express themselves and engage in detailed discussions on specific topics (Denzin & Lincoln 2005). This method is particularly suitable for exploring complex, long-term development contexts and historical narratives.

In identifying interviewees, we utilized a snowball sampling approach. Initially, we consulted a local village chief, who subsequently referred us to other village officials, residents, and staff from higher-level township government departments. All interviews were conducted collectively by the authors. For interviews with enterprises and government officials, we began by discussing the interviewee's job function. We then explored historical changes in their role, reconstructed the development process of the multi-agent cooperation model using historical methods, and inquired about their interactions with other actors. We concluded these interviews with an open-ended question: ‘How do you perceive this cooperation model? Can it be applied and promoted in other regions?’ For interviews with farmers, we first gathered their general impressions of local ecological development and economic conditions resulting from cooperation with government and enterprises. We then explored how the cooperation among these three parties was established, whether the model has evolved, and what benefits this cooperation has provided to the farming community.

First, we conducted semi-structured interviews with 29 individuals residing or working in The Dongluo Village, ensuring a broad representation of perspectives. The interviewees were categorized into three groups based on their roles: (a) officials from government functional departments (6 males and 1 female); (b) local farmers from the Duotion area (12 males and 7 females); and (c) employees of W Company (3 males). These interviews lasted between 25 and 150 min, generating approximately 160,000 words of recorded material. For the sake of confidentiality, all personal and company names have been anonymized in this study. Second, conducted an in-depth analysis of official documents gathered throughout the research. These documents included policy papers, legal regulations, village autonomy guidelines, and files related to ecological governance. Specifically, our analysis encompassed 12 village-level documents, 6 policy documents, 7 documents focused on ecological protection and governance, and 2 legal regulations. This comprehensive document review provided a contextual understanding of the regulatory and governance frameworks impacting the Duotion ecosystem.

The development trajectory of the Xinghua Duotion area in China can be delineated into two distinct phases. The first phase corresponds to the period following China's reform and opening-up, during which the region prioritized rapid economic growth, often at the expense of environmental sustainability. During this time, the Dongluo Village experienced considerable ecological degradation, yet the economic returns were not commensurate with the environmental costs incurred. The second phase commenced in 2017, marked by a strategic shift in the Dongluo Village's approach to ecological management and development. This transition signaled a move toward a sustainable development model that seeks to harmonize economic progress with environmental conservation. The village began to explore pathways that would transform its natural assets – including green mountains and clear waters – into economically valuable resources, metaphorically referred to as ‘mountains of gold and silver.’ This phase represents a concerted effort to balance economic growth with ecological preservation, reflecting a commitment to sustainable development principles.

At the beginning of this century, the Duotion ecosystem was in danger, especially as farmers' efforts to expand arable land and renovate terraced fields have gradually diminished the flood prevention and control functions inherent in the terraced agricultural system. Concurrently, rapid urbanization, both in terms of land and population, has led to a decline in the frequency of field operations in terraced areas, jeopardizing the preservation of traditional terraced farming techniques. The challenge is exacerbated by the difficulty elderly residents face in acquiring modern farming skills, resulting in a significant loss of agricultural expertise. Furthermore, the conversion of terraced farmland for urban development has not only reduced the area of arable land but also disrupted the surrounding ecological balance.

Governments at all levels had already recognized the threat of ecological degradation posed to the living environment, and local governments took the lead in response measures. One of the initial steps was to improve the living environment. In 2005, the Fifth Plenary Session of the Sixteenth Central Committee of the Chinese Communist Party (CPC) proposed advancing the construction of a new socialist countryside. The improvement of the living environment is a governance project carried out by the Chinese government to encourage the construction of rural infrastructure, improve the material conditions of rural construction, and enhance the living environment and appearance of villages. In the Dongluo Village, the living environment construction project included several key components: renovating the exteriors of villagers' homes and their surrounding areas, developing infrastructure such as sewage treatment facilities, garbage transfer stations, and public toilets, installing village signs at appropriate locations near the village entrance, and burying utility lines including electricity, telecommunications, and cable TV underground. Additionally, the project focused on improving the existing road network.

Subsequently, the Xinghua Municipal Government has continued to advance the protection and development of the cultural heritage associated with the Duotion ecosystem. Significant financial investments have been made annually to support these efforts, with funding increasing from 1 million yuan in 2013 to 30 million yuan annually by 2020, aimed at restoring and preserving the Duotion landscape. Additionally, a designated Duotion Protection Zone has been established to prevent industrial land expansion from compromising the ecological integrity of the Duotion area during urbanization. The Xinghua Municipal Party Committee and Government have developed specific protection plans and measures aligned with the requirements for safeguarding globally significant agricultural cultural heritage. These initiatives are focused on enhancing the preservation, excavation, and transmission of the Duotion agricultural system. By doing so, the government aims to bolster agricultural modernization, improve agricultural efficiency, and increase farmers' income in Xinghua, thereby amplifying the positive impact of the Duotion system on the region's agricultural and economic development.

Examining the investment structure and objectives of local governments reveals a reliance on a hierarchical system to implement top-down ecological governance practices. Local governments tend to prioritize investments in infrastructure renovation projects, and when they do allocate funds to ecological benefit initiatives, they often specify that they will not absorb the associated economic risks. Consequently, the environmental protection policies enacted by local governments primarily reflect a government-led approach to public welfare. This approach focuses on village infrastructure projects and the restoration of the ecological integrity of terraced fields. By substituting intervention-based social policies with public welfare-oriented policies, local governments can undertake environmental remediation and protection efforts without necessitating a forced alteration of the village's livelihood model. Although local governments place substantial emphasis on ecological restoration, they face significant challenges. The transition away from the era when governments were primary developers, which concluded at the end of the last century (Cheung 1969; Montinola et al. 1995; Shah & Shen 2008), has left local governments grappling with political pressures for environmental protection amid limited fiscal resources. Additionally, the development of ecological and natural resources remains a critical issue for the Chinese government, imposing stringent restrictions on the direct involvement of social capital in this sector. Consequently, in Dongluo Village, the local government is constrained to pursue only limited ecological development initiatives due to the scarcity of available development resources.

The situation of local governments leading ecological restoration efforts persisted until 2017. That year marked a significant turning point for the Dongluo Village, as the introduction of social capital and the support from higher-level government authorities provided the necessary conditions for advancing ecological development within the Duotion ecosystem. In June 2017, Jiangsu Province launched the construction of characteristic rural areas. By the end of August, the Dongluo Village was selected as one of the first pilot projects for this initiative. In July of the same year, the Dongluo Village attracted the involvement of W Company, a prominent real estate developer, as social capital to collaborate on the development of the village. Founded in 1984 and listed in 1988, W Company is one of China's largest private real estate development enterprises and has been listed on the Fortune Global 500 since 2016. The company's primary business areas include the development and management of public housing, physical commerce, and agricultural development.

In the collaborative model between local governments and social capital, a foundational equity arrangement of ‘government + social capital + village collective’ was established, resulting in the formation of a Limited Company involving these three parties. The total investment amounted to 85.4 million yuan, with W Company holding a 52% equity stake, making it the majority shareholder. W Company, as the controlling entity, is tasked with investments in agricultural industries, agricultural product management, rural tourism, landscaping, and certain public infrastructure projects. The Xinghua State-owned Assets Supervision and Administration Corporation holds a 42% stake in the company, overseeing the construction of infrastructure and the investment in the renovation and storage of dilapidated houses within the village, with its contribution primarily in the form of in-kind investments. The village collective invested in the joint venture by providing 27 acres of collective land use rights (equivalent to approximately 5.4 million yuan), securing a 6% share in the venture. The collaboration between local governments and social capital exemplifies a typical ecological Public–Private Partnership (PPP) model. This model facilitates the coordination of rights and responsibilities across various ecological domains and alleviates practical constraints faced by different stakeholders.

Local governments continue to assume a low-risk leadership role. From the perspective of investment proportions and subscribed amounts in the PPP model, local governments contribute in-kind investments while maintaining a significant equity stake of 42% in the venture. This arrangement reflects the government's strategy to minimize political risk while leveraging funds effectively, ensuring that the actual monetary investments are directed toward infrastructure improvement projects, such as village transformation. Local governments' public welfare infrastructure projects have enhanced the fundamental investment conditions in the area, creating a more favorable policy environment and offering preferential conditions for social capital to engage in village development.

The impact of social capital in this model is significant; W Company has assumed the role of the primary operator in the ecological industry, managing the practical aspects of diversified industrial development and operations and bearing full responsibility for the associated profits and losses. It provides substantial construction funding, advanced ecological project management expertise, and expanded sales channels for ecological products. These contributions further adjust the village's industrial structure and diversify villagers' livelihood opportunities. Currently, the Dongluo Village has achieved an optimal grain-to-economic ratio of 1.2:8.8, reflecting an improved agricultural structure. In recent years, a specialized fruit and vegetable planting cooperative has been established, with a focus on developing grape cultivation projects and incorporating additional activities such as fishing, leisure, and farm-style earth stove catering. This initiative has led to the development of efficient facilities and the integration of sightseeing, tourism, fruit-picking, and recreational activities. By 2022, the per capita income of local villagers had risen by approximately 10%, reaching 32,500 yuan.

Local government-led ecological restoration essentially embodies a top-down governance model characterized by strong political performance. This approach often limits the genuine engagement and enthusiasm of various social entities and impedes the deeper transformation of local ecological culture. Consequently, villagers' understanding of the ecosystem tends to remain confined to its economic transformation and direct agricultural utilization, rather than evolving toward a more nuanced appreciation of ecological values. The large-scale transformation of farmland by farmers aims to expand the area of arable land and increase yield per unit area. However, the actual effects of this transformation have led to imbalances and disruptions in the local ecological environment. This has significantly impaired the flood prevention and control functions of the local ecosystem, as well as the cultural functions associated with providing tourist landscapes.

Even though blindly expanding the cultivated area of the terraced fields did not significantly improve grain production, expanding the cultivated area was the only choice at that time. Although many people now realize that this blind behavior was essentially a phenomenon of agricultural involution, due to the lack of open job opportunities for farmers in nearby cities at that time, farmers could only stick to the agricultural system, and expanding the cultivated area was the only choice for farmers (A villager, 17 July 2023).

Before the advent of alternative livelihood models, villagers' understanding of the Duotion ecosystem was confined to simple economic utilization. This perspective represents a basic economic value cognition, wherein the actors perceive the ecosystem primarily as a means to enhance income. Such an understanding is closely tied to local cultural traditions and social contexts. The Dongluo Village has undergone a challenging transition involving livelihood transformation and ecological degradation. Farmers have a pronounced desire for ecological resources to augment per capita income. At this stage, villagers' cognition reflects a somewhat naive ecological and natural understanding, characterized by a materialistic approach. This view is based on a concept of ‘origin,’ which attempts to describe and comprehend the initial state and overall connectivity of natural phenomena. The terraced fields, as part of the natural environment, embody the notion of ‘origin of livelihood,’ implying that nature's sole role is to serve as the primary source of sustenance.

Previously, the ecosystem service function of Duotion was reduced by villagers to that of ‘undeveloped farmland,’ reflecting a simplistic economic value cognition. However, with the introduction of the ecological PPP model, there has been a notable shift. On one hand, the government-led human settlement improvement projects, backed by the administrative authority, have instilled in villagers the understanding that ‘environmental protection and the ecological system of Duotion should be valued.’ On the other hand, the long-term benefits derived from infrastructure projects and the dividends from ecological industry development have significantly transformed the villagers' ecological awareness. This shift has led to the gradual formation of a more nuanced value cognition, encompassing comprehensive utilization of the ecosystem.

The comprehensive utilization value cognition refers to the recognition by various actors that an ecosystem is not only a tangible environmental resource but also an integral social system or structure with historical and variable dimensions. This perspective acknowledges that ecosystems, beyond their immediate economic contributions, have complex interactions with other social systems. Such interactions can be recognized and adjusted by human actions to achieve specific objectives. First, villagers are beginning to understand that maintaining ecological balance positively influences both the convenience and livability of their daily lives and contributes to the development of their ecological esthetic awareness. For instance, many elderly villagers have abandoned the practice of defecating and urinating in open areas. This change is motivated by two primary factors: the increased presence of tourists, which makes such behavior socially unacceptable, and the enhanced ecological and esthetic quality of the village environment, which has fostered a sense of responsibility among villagers to preserve the improved surroundings.

From a rational perspective, while environmental benefits are often economically driven, the most significant advantage is the inherent quality of the environment itself. Initially, farmers in the area lived amidst unsightly conditions, with piles of garbage in front of their homes. Now, a clean environment has become the norm, and the scenic wetland surroundings at the village entrances contribute to a sense of well-being and comfort among residents. This improved living condition itself represents a substantial benefit (B villager, 17 July 2023).

Furthermore, both villagers and local governments have come to view ecological resources as valuable policy assets and drivers of economic development. The new rural construction policies have highlighted to local grassroots governments and village committees that ecological initiatives are not just about transforming daily living environments but also serve as strategic tools for village development. Previously, village growth depended primarily on industrial development and rural talent. However, the new rural construction approach has enabled Dongluo Village to leverage national ecological policies not only to enhance local infrastructure but also to secure financial support and political backing, thereby opening up more comprehensive development opportunities for the village.

If it were not for the construction of new rural areas and the renovation of living environments back then, the W Company Group would not have chosen our village for cooperation and agricultural tourism development. The policy effect at that time not only brought us standardized roads and infrastructure related to people's livelihoods, but also showed other potential investors that our village was valued by the higher-level government, and our village had strong execution and action capabilities. So, if you do a certain job well, it will bring more opportunities (Current village committee director, 20 July 2023).

Benefit-sharing encompasses two primary models: competitive value sharing and equitable value sharing. Competitive value sharing refers to the enhancement of both use value and monetary exchange value that arises from the innovation and development of ecological products or services. In this model, increased market competition emerges as new providers enter the market, influencing the supply and demand dynamics of ecological products (Porter 2011). Equitable value sharing, on the other hand, involves the coordination and redistribution of the ecological dividends generated by these products. This approach focuses on establishing mechanisms for expressing interests, negotiating, and compensating all stakeholders involved. It aims to ensure the development of a fair and effective ecological dividend-sharing system among all parties engaged in realizing the value of ecological products.

During the phase of local government-led ecological restoration, the Dongluo Village, despite its valuable landscape and tourism resources, has faced challenges in managing the tourism industry. Located within the core viewing area of the Duotion Ecological Zone, the village benefits from a steady annual influx of visitors, primarily from nearby cities such as Nanjing and Shanghai. Spring and autumn are peak seasons, often resulting in a shortage of homestay accommodations. However, the ecological restoration projects led by the government did not address the need for a well-regulated market order. This oversight, combined with the disorderly competition among various homestay operators, has led to a situation where the tourism industry, which should have been progressing positively, is instead experiencing harmful competition. The Dongluo Village initially had over 20 small-scale homestays operated by individual families. These establishments did not adhere to standardized industry norms, leading to frequent issues such as arbitrary price increases, cancelation of bookings, inadequate hygiene standards, and poor service quality. Many families had constructed three- or four-story homes. Those with properties facing the street often converted their unused spaces into homestays. In an attempt to attract customers, some operators resorted to blocking main roads and forcing tourists to disembark and seek accommodations.

The consequence of this disorderly competition is the decline of market reputation and the collapse of market order.

The intense competition among homestay operators and the subsequent collapse of the homestay market have made it challenging to sustain an effective competitive value-sharing mechanism. The cycle of dysfunction within the industry undermines its ability to leverage market advantages, diminishing the potential benefits of market size. As a result, new market opportunities are hard to generate. The decline in new operators and the rigidity of the overall homestay market further exacerbate this issue. Generally, local conflicts of interest among villagers are not addressed through formal legal and administrative means, due to a long-standing tradition of avoiding litigation and legal disputes in traditional rural Chinese society. Mediation, as an informal system, has historically played a significant role. Confucianism, which emphasizes harmony, interpersonal relationships, and social order, advocates for ethical and moral norms to regulate behavior.’

The Dongluo Village is no exception. In response to the collapse of market order, the local government and village collective have attempted to implement rescue measures. The most notable efforts include using administrative dispute mediation and involving respected elders from the community to address conflicts between homestay operators and tourists through informal means. However, these regulatory strategies have proven challenging to implement effectively. The failure of mediation can be attributed to the short-sighted behavior of homestay operators. Villagers, driven by a long-standing focus on the immediate economic benefits of ecological resources, are reluctant to participate in prolonged mediation processes. Instead, they often resort to more aggressive competitive strategies. Villagers who run homestays are often reluctant to address problems directly. While they are aware of their issues, they fear that accepting mediation and altering their business practices will leave them further behind in the competitive chaos. For these operators, managing a homestay is merely an auxiliary activity to their primary occupations, such as migrant work or local farming. The income from homestay operations is viewed as a supplementary bonus rather than a core revenue stream. Consequently, they prioritize short-term gains over the potential long-term benefits of mediation and intervention.

The failure of mediation not only underscores the difficulty in restoring market order but also reflects the gradual erosion of social trust and the weakening of collective village consciousness. Traditionally, clans, elders, and local elites acted as intermediaries, connecting society and feudal structures, and played a regulatory role through personal relationships and traditional moral authority. However, these traditional mediators struggle to intervene effectively, as traditional moral forces are increasingly overshadowed by the pursuit of economic interests.

The regional culture and social structure form the basis for developing a fair benefit-sharing mechanism. At present, Dongluo Village is grappling with the effects of market economy changes following the reform and opening-up era, leading to significant social differentiation. In this context of modernization and individualism, traditional mediators and ethical forces are unable to address the evolving attitudes and behaviors of individuals, leaving villages with fair value-sharing mechanisms without a solid practical foundation.

With the growth of diverse industries centered on ecology, a competitive benefit-sharing mechanism has gradually emerged among different market entities involved in industrial chains such as landscape tourism and agricultural product processing. During the ecological restoration phase, Dongluo Village's homestay industry, primarily focused on rural tourism, faced a gap in the high-end market. Consequently, the homestay sector evolved into a PPP collaboration project between W Company and the local government. In this arrangement, the local government is responsible for land acquisition and preparation, while W Company independently constructs and operates the homestays. W Company's entry into the homestay industry has significantly impacted Dongluo Village, captured a substantial market share, and set a new standard for the sector. Following the launch of W Company's homestay operations, more than 20 small, family-run homestays in the Dongluo Village formed the Dongluo Village Homestay Industry Alliance. This alliance issued a series of industry standards and guidelines aimed at addressing the previous disarray in the market and fostering a homestay sector that caters to diverse customer needs.

W Company's development of high-end homestays has opened up new opportunities for the homestay industry in the Dongluo Village. The enhancement of local infrastructure and ecological environment has attracted a substantial influx of tourists. However, the local homestay and hotel industries are still underdeveloped, leading to a shortage in tourism service supply. This gap has created additional employment opportunities for local scattered and family labor, resulting in a rise in ‘family homestays’ within the village.

Another notable example of competitive benefit sharing is the order-based agriculture initiative undertaken by W Company in collaboration with local agricultural giants. Given that projects exclusively managed by enterprises for ecological development and dividend generation still carry inherent market risks, the homestay and rural tourism industries derived from the Duotion agricultural system have struggled to achieve a balance between income and expenditure for these enterprises. To address this, W Company negotiated an implicit condition with the Xinghua Municipal Government: the right to develop and market surrounding agricultural products. W Company employs an order-based planting approach for locally produced crops, such as rice and wheat, integrating technical guidance and branding these products under the ‘88 Warehouse’ label. This initiative leverages W Company's property resources to market these agricultural products to urban residential owners. As a result, the turnover has reached 30 million yuan. In addition to promoting order-based agriculture, W Company also capitalizes on its existing industry chain to sell these ecological agricultural products.

In the development of the local ecological industry, villagers have become primary beneficiaries of ecological dividends through collective investments in platform companies using idle land and buildings. For instance, in 2020, two plots of land totaling 18.49 acres in the Dongluo Village, Xinghua City, were evaluated by a third-party organization. The land was then collectively invested in a joint venture company with a capital contribution of 5.4 million yuan, completing the property rights confirmation process. To ensure a stable income for farmers, Dongluo Village has innovated by converting land rent into equity and distributing dividends based on this equity. The village has implemented a land investment dividend scheme covering 818 acres, with a total share capital of 3.1972 million yuan. With one share valued at 1,000 yuan, a total of 3,197.2 shares were issued. Through village collective shareholding, villagers receive an annual dividend of 80,000 yuan.

The ecological dividends from the Duotion ecological development project have significantly facilitated local dispute resolution and democratic deliberation. The traditional Chinese system of village officials has been revitalized, playing a crucial role in managing disputes related to ecological dividends. In 2021, the Dongluo Village introduced new village rules and regulations, outlining daily behavioral norms and the procedures and standards for villagers' participation in public affairs. These village regulations and agreements, a common governance method in traditional Chinese society, establish universal social norms to guide villagers' daily conduct and involvement in communal matters. We regularly invite our former branch secretary to assist with daily disputes for a fee. Given the increase in everyone's income, the older branch secretary holds significant authority and has a deep understanding of current policies, is highly respected. Villagers are particularly receptive to his input in economic disputes, and his involvement has proven to be very effective (Summary of various village affairs work in the past three years).

The role of village regulations and agreements extends beyond resolving economic disputes between villagers to also mediating conflicts between villagers and social capital. As an intermediary between social capital and villagers, the village collective is perceived as more impartial and effective in dispute resolution. For instance:

This study applies the framework for realizing ecological value from the perspective of ES co-production in a local case study. The findings indicate that ES value creation is intricately linked to ES management models, local cultures, and benefit-sharing mechanisms across different historical stages (Cebrián-Piqueras et al. 2020; Zhang et al. 2022a, b). Through a systematic analysis of historical records and semi-structured interviews with villagers and stakeholders, it was observed that during the ecological restoration phase, the Duotion area faced significant challenges due to urbanization and agricultural involution. The absence of well-defined benefit-sharing mechanisms, combined with an economic-centric local cultures rendered the government-led, public welfare-oriented ES management model ineffective (Sattler et al. 2018; Kenter et al. 2019). In contrast, during the ecological development phase, the introduction of the PPP model facilitated the activation of ecological values and the emergence of ecological industries. This shift enabled a broader cultural transformation, leading to an increased appreciation of ecological and cultural values among local communities (Horcea-Milcu et al. 2022; Zheng et al. 2023). Furthermore, traditional ethics were revitalized, contributing to the resolution of social conflicts and the establishment of competitive benefit-sharing mechanisms. These developments illustrate how the transition from a government-led approach to a more participatory and market-driven model fosters a self-reinforcing cycle of EVC (Díaz et al. 2018; Pascual et al. 2022).

The protection of the ecosystems and the provision of ES are global concerns and align with key international frameworks such as the United Nations Sustainable Development Goals (Costanza et al. 2021; IPBES 2023). In recent years, China has launched large-scale policy experiments to enhance mechanisms for realizing the economic value of ecological products. A crucial aspect of these initiatives is the transformation of ecological value into economic benefits, a strategy that has direct implications for sustainable development and biodiversity conservation (Wu et al. 2021; Xie et al. 2023a, b). The benefit-sharing mechanisms play a fundamental role in ecosystem service value and are widely recognized in economic and social assessments by organizations such as the World Bank and the Asian Infrastructure Investment Bank (Narloch et al. 2021; Lawlor et al. 2022). In the Duotion, active participation in ecological dividend distribution was observed, but the process remains in an exploratory phase. Local governments and social capital have created institutional channels that enhance villagers' engagement in ecological projects, particularly those with direct economic benefits (Fischer et al. 2023). Moving forward, it is essential to develop competitive and equitable benefit-sharing models to ensure long-term participation and success in ecosystem service projects (Ruckelshaus et al. 2020; van Oorschot et al. 2023).

The study further highlights how villagers' perceptions ES through different stages. During the ecological restoration stage, nature was primarily seen as a resource for livelihood with limited awareness of broader ecological functions (García-Llorente et al. 2023; Christie et al. 2024). In contrast, during the ecological development stage, their understanding shifts to include ecological and economic development, as well as governance considerations. These findings align with recent literature that highlights the role of cultural ecosystems in shaping human–environment interactions (Jorge-García et al. 2023; Cybèle et al. 2024). A key scientific advancement of this study is the identification of typological distinctions in benefit-sharing mechanisms, specifically differentiating between market competition benefit-sharing and social justice benefit-sharing. The practical applications of these mechanisms vary significantly based on ES management models and local cultural contexts (Nkhata et al. 2012; Chomba et al. 2016; Xie et al. 2023a, 2023b). The results suggest that a tailored approach, considering socio-economic conditions and governance structures, is crucial for fostering sustainable ES co-production (Van et al. 2014; Fischer et al. 2023).

Based on the aforementioned discussion, the creation of ES is primarily influenced by equitable benefit-sharing mechanisms and local ecological and cultural cognition. Our findings demonstrate that structured and inclusive benefit-sharing systems are essential for sustaining long-term engagement in ES co-production. In the Xinghua Duotion case, the shift from a government-led ecological management model to a PPP approach enabled a more competitive and systematic distribution of ecological dividends, fostering economic participation and social trust. Additionally, changes in ecological and cultural cognition played a crucial role in shaping community involvement. Initially, villagers perceived nature mainly as a livelihood resource, but as ecological development progressed, their understanding expanded to recognize broader economic and environmental benefits. This transformation strengthened local engagement in ES management, reinforcing the link between ecological awareness and sustainable governance. This study contributes to the growing body of research on ES by offering an integrated framework that advances our understanding of ES co-production, benefit-sharing, and public perceptions. The findings provide valuable insights for policymakers, researchers, and practitioners aiming to develop sustainable and inclusive ecological management strategies.

This study addresses critical gaps in traditional research by proposing an analytical framework that integrates ecological management models, ecological cultural cognition, and ecological benefit-sharing mechanisms in ES co-production. The findings underscore that both ecosystems and social systems function as complex adaptive systems, where transitions and interactions are inherently nonlinear and context-dependent. By applying this framework to the Duotion ecosystem across different historical stages, the study demonstrates that the effectiveness of ES management strategies has been closely linked to their alignment with local ecological cultures and the incorporation of equitable benefit-sharing mechanisms within social structures. The analysis reveals that the success of different ES management models has been contingent upon their ability to adapt to socio-ecological dynamics over time, emphasizing the necessity of incorporating participatory planning approaches in future ES management. Moreover, the results highlight the gradient nature of local ecological cultures and the crucial role of benefit-sharing mechanisms in ensuring the sustainability of ES co-production. By systematically integrating these key elements, the proposed framework provides a scientific foundation for the development of adaptive and effective ES management policies that balance ecological sustainability with socio-economic resilience. The study further suggests that long-term ES co-production requires a comprehensive approach that not only considers ecological processes but also acknowledges the social and economic dimensions of ecosystem management. This holistic perspective enables ES managers to design strategies that are both scientifically grounded and practically viable, fostering more sustainable and equitable outcomes in ES governance.

This work was supported by a grant from the National Social Science Foundation of China (No. 21&ZD183).

All relevant data are included in the paper or its Supplementary Information.

The authors declare there is no conflict.