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The Grassland Ecological Protection Award Policy was implemented to address severe grassland degradation in China. This policy utilizes grassland subsidies as an incentive to control the number of livestock and has become the largest payment for ecosystem services program. Although many studies have analyzed the performance of this policy, it remains controversial as to whether grassland subsidies are effective at reducing the number of livestock; moreover, there is still a lack of quantitative studies on the roles of household livelihood assets and livelihood strategies in reducing the number of livestock. On the basis of the sustainable livelihood framework, this paper constructed an analytical framework to research how grassland subsidies affect the number of livestock under the effects of different livelihood capitals and local socioecological contexts. After choosing the Pumqu River Basin of the Tibetan Plateau as the research area, this study classified sample households on the basis of grassland sizes and then examined the effects of grassland subsidies on the number of livestock of different groups of rural households by considering livelihood capital. The results showed that (1) for all the sample households, grassland subsidies caused herdsmen to raise more livestock, which was contrary to the expectation of the grassland protection policy. The invalidation of grassland subsidies was mainly caused by the poor design and implementation of the policy at the local level. (2) In addition, for rural households with different grassland sizes, the subsidies could be effective in reducing the number of livestock for households with small grassland sizes while increasing the number of livestock for households with large grassland sizes. This indicates that some supporting policies and measures for households with smaller grassland sizes should be provided to stimulate the reduction in the number of livestock, and for households with large grassland areas, grassland circulation should be encouraged to promote the large-scale production of livestock husbandry. The finding of this study can help governments to formulate policies tailored towards appropriate subsidies for addressing grassland degradation.

sustainability

Grassland Subsidies Increase the Number of Livestock on the Tibetan Plateau: Why Does the “Payment for Ecosystem Services” Policy Have the Opposite Outcome?