Forest ecological products constitute a unique academic concept in China that has gained widespread recognition and scholarly consensus domestically. These products are derived from forest ecosystems, embody the transition from “lucid waters and lush mountains” to “invaluable assets”, and provide goods and services that improve human well-being. Over time, their development has evolved from natural ecosystem services to material supply products, and now to composite products combining both nature and human labor (Song and Du, 2024). They are widely used in areas such as water storage, landscape shaping, and healthcare, and offer essential ecological support and ecological benefits (Wang et al., 2023). To efficiently transform ecological value into economic value, it is crucial to establish a scientific cost compensation mechanism and guide investment in multi-dimensional capital to optimize forest resource allocation.

At present, forest ecological products can be classified in two main ways (Table 1). One categorizes them based on their functions in material supply, ecological management, protective assistance, and cultural services, thereby reflecting their core roles in supplying material goods, maintaining ecological balance, protecting ecosystems, and fulfilling spiritual needs (Nie and Liu, 2024). The other classification is based on marketability, and distinguishes between pure public goods, quasi-public goods, and business goods (Li et al., 2025). Pure and quasi-public goods, like carbon sinks and biodiversity, are mainly government-driven and face challenges in marketization and value quantification. Private forest ecological products, such as commercial timber, medicinal plants, and paid tourism experiences, are market-oriented with better marketability and value measurability (Wang et al., 2024).

Value accounting for forest ecological products is a critical topic in academic research. Since forest ecological products and ecosystem services are closely related, studies on ecosystem service measurement also inform the value accounting of these products. Since the 1970s, economists, ecologists, and research organizations have used economic evaluation methods like environmental and ecological economics to assess ecosystem service values, and have accumulated significant experimental data for forest ecological product valuation. Research in this area gained momentum in the 1990s, with Costanza et al.’s (1997) influential paper in Nature, which categorized 17 ecosystem services and estimated their monetary values, which sparked further interest in value assessment. The Millennium Ecosystem Assessment (MA) by the United Nations also contributed to discussions on forest ecological product valuation. However, due to the diverse functional attributes and complex value compositions of these products, as well as regional differences in forest ecosystems, there are variations in accounting goals, indicator systems, and data acquisition methods. As a result, the accounting methods for the physical quantity and value of forest ecological products are still evolving, with no universal standard established yet (Wang et al., 2025).

Common methods for accounting the physical quantity of forest ecological products include the equivalent factor method (Xie et al., 2015), the functional price method (Ouyang et al., 2013), and the “ecological unit” method (Liu et al., 2024a). For value accounting, approaches such as the direct market method, surrogate market method, and Contingent Valuation Method (CVM) are commonly used (Peng and Yuchi, 2021). The direct market method is applicable to products with clear property rights and market transaction bases, such as forest carbon sinks. The surrogate market method is typically used to estimate the value of ecological products with irregular supply, like forest runoff regulation. CVM is often employed for products that lack market transactions and are difficult to quantify through other methods, so it serves as a supplementary approach for assessing ecological product values.

The value realization of forest ecological products is a dynamic process in which ecological values, such as regulation, supply, and culture, are transformed into economic and social value through specific mechanisms. This transformation addresses the challenges of measuring, transacting, and monetizing ecological value, while balancing ecological protection with economic development.

The realization paths are generally categorized into market-oriented and non-market-oriented approaches. As shown in Table 2, market-oriented paths focus on using price mechanisms to guide capital toward the efficient transformation of ecological value. The key to this is solving issues like vague valuation and difficult transactions through innovations in property rights, transaction rules, and value accounting standards. These paths apply to products with exclusivity and competitiveness, which align with the public attributes of ecological services while allowing for economic benefits through reasonable development. Carbon sink transactions, the understory economy, and ecotourism are examples of market paths corresponding to regulatory, supply, and cultural services, respectively.

Marketization is further supported by tools like eco-label certification, equity trading platforms, and green finance, which help establish forest ecological equity and standardize forestry practices. However, the unclear definition of property rights, inadequate value accounting standards, and flaws in market mechanisms remain significant barriers. For example, carbon sink trading transforms forest carbon sequestration functions into tradable carbon sink assets, supported by carbon emission rights markets. The understory economy utilizes under-forest resources for planting, breeding, and product processing, while enhancing value through industrial chain extension and deep processing. Eco-tourism caters to cultural services by offering recreation and wellness experiences that appeal to the spiritual and health needs of consumers. Eco-label certification improves the competitiveness of provisioning service-oriented products by highlighting their ecological attributes. In addition, the digitalization of property rights trading platforms enhances transaction efficiency while relying on clearly defined ownership, such as forest and runoff development rights. Green finance supports various forest products by covering ecological rights and the entire production process, thus providing financial backing and risk mitigation that drive value realization.

The non-market-oriented path for the value realization of forest ecological products, with government regulation and social participation as its core driving forces, applies mainly to the pure public goods and quasi-public goods of forest ecological products (Li et al., 2025). Such products feature non-exclusiveness, non-competitiveness and positive externalities, making spontaneous value compensation via market mechanisms difficult. Their resource capitalization and value recognition rely on external forces like the market, society and government. From a risk perspective, fiscal sustainability pressure is the primary challenge for the government-led model, while efficiency-incentive compatibility issues and coordination costs among multiple stakeholders undermine this path’s effectiveness—especially constraining the value realization of quasi-public ecological products. Based on product attribute differences, this path is subdivided into two types (Table 3): the pure public goods-oriented type, with government-led via transfer payments, government procurement and ecological compensation to guarantee social welfare; and the quasi-public goods-oriented type, with multi-stakeholder participation including ecological capital industrialization (e.g., forest health care development) and ecological indicator trading to realize diversified payment through “government+market” mechanisms.

Regarding the differences between the two path types, the non-market path of pure public goods presents the characteristics of government orientation, that is, realizing value compensation through the precise delivery of policy tools, which is essentially the government’s direct guarantee of social public welfare. In contrast, the non-market-oriented paths for quasi-public goods break through the limitation of a single subject by constructing a closed loop of value realization with a multi-dimensional collaboration mechanism. They not only retain the government’s regulatory and guiding role but also give play to the operational vitality of market entities and the supervisory and participatory role of social forces, thus forming a more flexible value realization model.

A key focus of current research on forest ecological product value realization is exploring the factors influencing its efficiency via regression and qualitative comparative analysis (Zhang et al., 2025). Porter’s Diamond Theory, which is primarily applied to national industrial competitiveness, requires further exploration and refinement for ecological field applicability. Its limitations include ambiguous dimension boundaries and inadequate consideration of inherent ecosystem characteristics and social value goals. Some studies have extended that theory to this field: supply-side factors form the material basis, shaping the supply capacity and functional attributes of ecological products; demand-side factors provide market pull for value monetization, guiding supply and value transformation through consumer demand; institutional factors establish forestry system operation rules, addressing supply-demand externalities via interest distribution regulation; technical factors are the core driver for improving value realization effectiveness, which breaks transformation bottlenecks, enhances product quality, meets consumer demand, and prompts relevant regulatory revisions (Fainshmid et al., 2016). Integrating the relevant literature, this study takes ecological carrying capacity as a fundamental constraint and social equity as the value distribution goal, and identifies four main types of influencing factors: supply side, demand side, institutional side, and technical side, as shown in Figure 1.

Supply-side factors directly determine the supply capacity, quality, and functional diversity of forest ecological products (Mori et al., 2017). For instance, the “Forest Ecological Bank” model in Nanping, Fujian Province, has increased the forest stock by 35%, supporting an operation scale of 7.26 million mu. Forest ecosystem integrity is vital for the coordinated output of functions such as regulation, supply, and culture, while fragmentation can disrupt ecological service supply. Vegetation coverage affects ecosystem services like carbon sequestration, oxygen release, and soil conservation, which directly influence product output and value density. Forests with high coverage typically have higher carbon sink potential and aesthetic value (Liu et al., 2019; Ma et al., 2021). The stability of ecological functions ensures a sustainable supply and reduces the impact of environmental changes, while differences in forest type, geographical location, and wildlife richness affect the functional focus and supply advantages of ecological products in different regions, thus influencing value realization adaptability (Tang et al., 2022). Demand-side factors are driven by increased consumer awareness and facilitate the conversion of forest ecological value into economic and social value (Xu et al., 2025). Consumer demand for ecotourism and eco-labeled products has grown as ecological civilization has gained traction. Their willingness and ability to pay are essential for transforming demand into transactions. These factors depend on product value recognition and regional economic conditions, which together determine the scale of market demand (Xu and Kong, 2024). For instance, Nan’ao County in Shantou City has pledged income rights from carbon sinks on 2600 mu of forestland, thus meeting the market demand for ecological regulation products while promoting the conversion of “resources-assets-capital”. The supply side must optimize its structure, boost added value, and diversify value realization paths as consumer preferences shift from material goods to spiritual and cultural goods like ecological research and forest health care, as well as ecological regulation products such as carbon sink finance and green certification (Nie and Liu, 2024). Institutional factors address the externality problem and reduce value transformation costs by standardizing behavior (Loft et al., 2015). For example, the “combined supply” model in Jingzhou County safeguards forest farmers’ income through a risk compensation fund, which creates a virtuous cycle of protection and benefit, resulting in a landscape premium of 2.91 million yuan. Clarifying property rights, including forest, water, and carbon sink rights, is essential for marketization, reducing disputes over ownership and facilitating carbon sink trading and forest right transfers, thus aiding the capitalization and monetization of ecological products that are difficult to measure in value (Xu and Kong, 2024). Financial subsidies, tax incentives, and project support help lower the cost of green forestry production, which encourages market participants to engage in ecological protection and fosters favorable market expectations for value transformation. By improving laws and regulations, the government ensures ecological protection, transaction rules, and fair interest distribution to prevent market failure and moral hazard (Patterson and Coelho, 2009). A reasonable interest distribution mechanism mobilizes the enthusiasm of protectors, enabling forest managers to benefit and ensuring the sustainability of value realization (Liu et al., 2024a; Xu and Kong, 2024). Technical factors overcome measurement and transaction challenges and provide accurate support for value transformation (Xu et al., 2023). For example, Jingzhou County’s GEP accounting platform, which integrates remote sensing and blockchain technologies, reduces transaction costs by over 30% while ensuring that ecological products are measurable, priceable, and tradable. Ecological monitoring technologies, such as remote sensing and the IoT, track ecosystem changes in real time and provide data for product quantity accounting and quality certification. These technologies address the challenge of quantifying intangible ecological value and form a core basis for transaction pricing and ecological compensation (Liu et al., 2024b; Zhang et al., 2025). Biotechnology improvements enhance forest growth efficiency, stress resistance, and ecological functions, thus optimizing product supply quality and output (Liu et al., 2024c). Furthermore, digital technologies like big data and blockchain enable process traceability, reduce information asymmetry, improve transaction efficiency, and support large-scale carbon sink and VEP transactions (Kong et al., 2023b).

As Table 4 illustrates, numerous practices have been implemented both domestically and internationally to support the value realization of forest ecological products. Differences exist between domestic and foreign cases of the value realization of forest ecological products in terms of property right clarity and tradability, the allocation of rights and responsibilities among the government, market and community, the recognition of value accounting standards, and the sources and distribution mechanisms of ecological compensation funds. Internationally, most practices involve private forest tenure holders, with multi-center governance in Europe and community self-governance in Japan. They use an international certification system to promote comparable value transactions. The funding channels are diverse, and the community benefits directly. In China, the system is based on collective forest tenure and the “separation of three rights” (ownership, contracting rights, and management rights). Governance is dominated by administrative assessments. Although there are industry standards, the government and the city are disconnected, and fiscal transfer payments are the main approach for distribution losses.

Internationally, ecosystem service value addition is widely adopted for the value realization of forest ecological products. Many countries have explored integrated approaches that combine government policies, market promotion, and social participation based on their forest resources and institutional contexts. For instance, Germany’s Forest Strategy 2020 (FS2020) integrates four core forest services of timber production, carbon sequestration, leisure, and biodiversity (Dittrich et al., 2017), so it avoids over-reliance on a single ecosystem service. It implements ecological monitoring, functional zoning, rotation period management, and ecological compensation policies to convert forest ecological value into economic value (Caicoya et al., 2023). The Federal Forest Act balances wood production and ecological services through a systematic legal framework, while voluntary emission reduction (VER) projects, Eco-Accounts mechanisms, and Payments for Ecosystem Services (PES) plans form a multi-functional governance system integrating forest utilization, protection, and leisure. By 2023, the annual value of non-market services from German forests reached 5.5 billion-6 billion euros, or 1.6 times the market value of timber (Pistorius et al., 2012).

Globally, governments promote forest management strategies supported by certifications such as FSC (Matias et al., 2024), LEI (Perera and Vlosky, 2006), SFI (Dwivedi et al., 2018), and PEFC (Burns et al., 2016). These third-party audited certifications evaluate forest management quality, monitor deforestation and wildlife poaching, mitigate human-induced negative impacts, and ensure sustained ecosystem service value addition (Taylor, 2005). By 2020, 89 countries had 160 million hectares of FSC-certified forests, accounting for 5% of the world’s total forest area (Matias et al., 2024). Other international initiatives include the U.S. Reis Act (Prestemon, 2015), Japan’s “Satoyama Initiative” (Fukamachi, 2020), Ethiopia’s CRGE strategy (Tesfaye et al., 2024), the EU Forest Strategy 2030 (Frei et al., 2024), and Brazil’s forest restoration programs (Gardon and dos Santos, 2024), and these initiatives reflect diverse global practices.

In China, regions have developed locally differentiated models based on their natural and economic conditions. For example, Anji County of Zhejiang Province built a full-chain bamboo industry model, with its “Two Mountains Bank” featuring digital benefit distribution, tripartite governance (enterprises, village collectives, villagers), and a “bank + ecology” financial cooperation model that integrates bamboo forest carbon sink accounting while addressing low industry incomes. Prior to market-oriented models, China explored fiscal transfer payment-based ecological compensation, such as Changning County of Sichuan abandoned industrial projects to protect ecosystems, but it faced challenges from unclear compensation standards. Sanming City of Fujian, a national forestry carbon sink trading pilot, promotes government-market coordination with green financial products. Wuyuan County of Jiangxi integrates ecological resources with cultural tourism to realize ecological protection and livelihood improvement.

Compared with the Chinese cases, international practices emphasize maximizing benefits by integrating multiple forest functions as internal drivers to avoid single-functional dependence. While adopting differentiated paths, coordinating multiple forest functions and recognizing non-market values are crucial. Beyond market tools, forest certifications effectively clarify ecological value. China has established collective forest land rights mechanisms but needs to improve the entire transaction process of forest ecological products (Liu, 2020). International experiences also highlight policy integrity, clear responsibilities, regional cooperation in ecological compensation (Dittrich et al., 2017), and linking value realization with community participation and local culture (e.g., Japan’s “Satoyama Initiative”) (Fukamachi, 2020).

The shift from “accountable” to “accurate, standardized, and comparable” value accounting of forest ecological products will be required in the future, with standard unification and technology innovation serving as the foundation. At the technical level, this system should rely on satellite remote sensing and the IoT to build a monitoring network of “sky eye+earth eye+human eye”, deepen the application of technologies such as UAV and ecological simulation, and realize the long-term accurate calculation of physical quantity and value (Wang et al., 2024). For example, Jixi County in Anhui Province integrates high-resolution remote sensing images, lidar, and ecological models to build a carbon sink spatiotemporal model, which not only realizes the accurate identification and visual expression of the functions of forest ecological products but also improves the measurement accuracy of regulatory services such as carbon sinks and water conservation (Xu and Kong, 2024; Wang et al., 2025). At the standard level, the inconsistencies in the current accounting system of forest ecological products make it difficult to compare the results horizontally and hinder market transactions (Li et al., 2025). Although the “Specifications for the Accounting of Gross Ecosystem Product (Trial)” in 2022 attempted to establish a general standard, it is still restricted by regional natural conditions and forest ownership types. Standards need further refinement according to the ownership characteristics of natural/planted forests and public welfare/commercial forests, along with a unified cross- regional accounting standard (Li and Xie, 2024). In terms of non-use value accounting, we should break through the limitation of a single conditional value evaluation method, integrate experimental economics and machine learning methods, tap the real preferences of the public through controllable experiments, and use algorithms to improve the scientific validity of accounting.

Value realization of forest ecological products in the future will require moving beyond the traditional model that depends entirely on government compensation. Moreover, the establishment of a diversified market-oriented pathway system will be demanded, with this system being driven by the collaborative work of the government and the market and integrated with online and offline interactions. In terms of the digital economy empowering market transactions, we will not only develop the “e-commerce platform+ecological products” model, but also expand the market of material products, such as forest food and medicinal materials under the forest, with the help of live broadcast and community marketing. On the other hand, the application of blockchain technology can record the monitoring, verification, and transactions of equity products such as forestry carbon sinks and ecological labels to ensure data transparency and traceability (Wang et al., 2024; Xu et al., 2025). In terms of ecological industrialization, by innovating the “ecology + cultural tourism” and “ecology+health care” models, ecological value can be embedded in services. Simultaneously, biological agents and forest functional products can be produced through technological integration to support the advancement of forest products to the top of the value chain and industrial chain (Li et al., 2025; Wang et al., 2025). For the construction of cross-regional transaction mechanisms, it will be necessary to accelerate the construction of a national unified voluntary greenhouse gas emission reduction transaction market and include forestry carbon sink projects. Drawing lessons from the experience of ecological compensation in Zhejiang Province’s river basins, we should establish a horizontal ecological compensation mechanism based on GEP accounting for cross-basin water conservation products to realize coordinated protection and value transformation between the upstream and downstream regions (Li and Xie, 2024; Xie and Chen, 2024).

The first step in advancing the value realization of forest ecological products from pilot projects to full implementation is to build an institutional system with defined rights and responsibilities, incentive compatibility, and robust guarantees.

First, promote the in-depth development of the collective forest tenure reform. Through the trinity institutional arrangement of “confirmation, empowerment and circulation”, establish multi-level rights registration and trading rules such as forest carbon sinks and forest land management rights, and clarify the legal attributes of ecological product transferability (Kong et al., 2022). For example, promote the “forest ecological bank” model in Nanping City, Fujian Province, to integrate fragmented forest rights and solve the problem of poor circulation of management rights (Xu and Kong, 2024; Wang et al., 2025). Second, innovate the benefit-sharing mechanism. By constructing a “farmer-participation value distribution” mechanism, social capital can be encouraged to cooperate with farmers in the form of shares, cooperation, and trusteeship, so that farmers can share the added value of the industrial chain (Xu et al., 2025). Moreover, strengthen the connection between ecological compensation and rural revitalization, and use compensation funds for the development of village collectives and increasing farmer income, thus forming a virtuous cycle of “protectors benefit and users pay” (Li et al., 2025). In addition, strengthen the revision of laws and regulations and policy coordination. Promote special legislation on the ecological product value realization and clarify the legal basis for core issues such as property rights, value assessment, and market transactions (Nie and Liu, 2024). Coordinate the policies related to natural resource, ecological environment, forestry, and other departments, break down departmental barriers, and solve the problem of “multiple policies from multiple departments and multiple management” (Wang et al., 2024). When building a digital platform for collective forest tenure in the future, we recommend the introduction of alliance blockchain technology to solve the problems of confirmation, certification, and trust regarding forest tenure and carbon sink data. This can ensure secure and credible transactions while effectively preventing data fraud, which will lay a reliable data foundation for the development of ecological finance.

The value realization of forest ecological products cannot be “one size fits all”. Therefore, measures must be tailored to local circumstances, policies must be defined, and strategies for resource endowment, regional positioning, and development stage must be investigated. Different implementation paths should be adopted for different forest type adaptation modes. Natural forests should focus on protective development, rely on government ecological compensation, and moderately develop their ecotourism and scientific research services (Li et al., 2025); under the premise of ensuring ecological security, plantations should develop timber processing, the understory economy, and carbon sink transactions through the market (Kong et al., 2022); public welfare forests should strengthen vertical and horizontal ecological compensation; and commercial forests should introduce market mechanisms based on clear property rights to realize direct value and ecological equity value (Li and Xie, 2024). Under different regional scale models, different approaches are needed in institutional selection. At the county level, it is necessary to build an eco-industrial pattern of “one county, one product” based on characteristic resources (Xu and Kong, 2024); at the provincial level, a unified institutional framework and market system should be built (Kong et al., 2023a); at the cross-regional level, it is essential to establish a value-based horizontal ecological compensation mechanism to solve the problem of ecological externalities (Xie and Chen, 2024). At different developmental stages of the same region, it is also necessary to change the selection strategies of realization paths according to the actual situation. In the early stage of developing understory planting and breeding in underdeveloped areas, the fundamental goal should be to increase farmer income, strive for ecological compensation funds to lay a foundation, and then introduce social capital to develop ecotourism and carbon sink projects in the later stage. Developed regions can fully utilize the benefits of capital and technology, investigate “ecology+technology” and “ecology+finance” models, and advance ecological asset securitization, smart forestry, and forest health care (Wang et al., 2024; Wang et al., 2025).

Against the background of global climate change and sustainable development, the value realization of forest ecological products needs to have both an international vision and Chinese characteristics, and actively engage in global ecological governance to propose a “Chinese plan”. On the one hand, it will be necessary to adapt international experience to local conditions, but not copy it mechanically. For example, there are international practices such as Payments for Ecosystem Services (PES) in Costa Rica and EU ecological labels, but China is dominated by collective forests and has significant advantages in government resource allocation, so it cannot simply copy the private forest models (Li et al., 2025). It will be necessary to innovate in combination with institutional advantages and organically combine the “capable government” with the “effective market” (Xu and Kong, 2024). On the other hand, cross-border coordination of forest ecological values will be required. This means encouraging the carbon sinks produced by Chinese-sponsored forest projects in nations along the route to be used to offset carbon emissions, relying on “The Belt and Road Initiative” Green Development Initiative, and investigating cross-border carbon sink transactions and cooperation (Wang et al., 2024). In addition, we can learn from the domestic experience of inter-provincial river basin compensation, establish a cross-border ecological compensation mechanism, realize the compensation of ecological beneficiaries to protectors through multilateral agreements or market methods, and maintain regional forest ecological security (Xie and Chen, 2024).

The in-depth application of digital technology is the core driving force for resolving bottlenecks in the value realization of forest ecological products, and its key value is reflected in the revolutionary transformation of the two links of resource monitoring and market transactions. For example, the IoT can deploy information sensing equipment, and comprehensively use IoT monitoring, satellite remote sensing, intelligent video surveillance, UAV inspection, and thermal imaging identification technologies to track the forest ecological status in real time, accurately grasp the growth and decline dynamics, and detect fires and diseases and pests in a timely manner. Meanwhile, it can empower the ownership boundary and refined management of forest land and trees to lay the property right data foundation for asset operation (Wang et al., 2024; Xu and Kong, 2024). In practice, the forestry digital twin intelligent management system built in Kaihua County, Zhejiang Province, is a model that comprehensively uses these technologies for three-dimensional perception and intelligent management. It is also possible to build a national unified digital trading platform and use big data and artificial intelligence to achieve the accurate matching of supply and demand, dynamic price monitoring and transaction risk prevention and control (Yang et al., 2024). By analyzing product supply and demand information and outlining customer portraits, transaction costs can be reduced, and price trend references can be provided based on transaction data. Blockchain technology can be introduced to build a trust mechanism, thereby ensuring transparent and secure transactions with tamper-proof and traceable characteristics, and realizing automatic execution and accurate accountability through smart contracts.