Soil erosion in the Three-River Headwaters (TRH) region has continued to intensify in recent decades due to human activities and climate change. To reverse this situation, the Chinese central government has launched the Subsidy and Incentive System for Grassland Conservation (SISGC). As a sign of the effectiveness of SISGC implementation, the dynamic changes of soil erosion can provide timely feedback for decision makers and managers. The Revised Universal Soil Loss Equation (RUSLE) model was used to simulate the spatial distribution of soil erosion before and after SISGC implementation, and Mann–Kendall (MK) test to reveal the effect of policy implementation. The results showed that: (1) the soil erosion in the TRH was mainly mild (83.83% of the total eroded area), and the average soil erosion rate and the total erosion were 13.63 t ha⁻¹ y⁻¹ and 323.58 × 10⁶ t y⁻¹ respectively before SISGC implementation; (2) SISGC implementation has curbed soil erosion. After SISGC implementation, the total soil erosion decreased by 3.80%, which showed obvious differences between grassland types; (3) The influences of SISGC were mainly because it has increased vegetation cover, further decreasing soil erosion. However, soil erosion in Alpine grassland has deteriorated, indicating direct targeted policymaking should be on the agenda. Furthermore, SISGC should be continued and grassland-type-oriented to restore the grassland ecosystem.

The water conservation function plays a vital role in the land–water cycle. As the “Chinese water tower”, the headwaters of the Yellow River are of great significance to the safety of the Yellow River basin and even the global ecosystem. Taking the grassland ecosystem in the Yellow River source area as the research object, the InVEST water yield model with modified parameters and the ecological value evaluation of the modified equivalent factor method were used to explore the simulated spatio-temporal changes and the value of grassland water conservation from 2001 to 2020. The results show that: (1) the average total amount of water conservation in the source area is 549 × 10⁸ m³, which is 16% of the runoff in the Yellow River basin, with a growth rate of 7.5 mm/year 1 and a contribution rate of 30%; (2) the total ecological value of grassland water conservation in 2020 is USD 340.03 × 10⁸. The proportion of improved grassland in ecological restoration and management is only 0.51%, while the proportion of original alpine meadow reaches 67% and its ecological function and value are irreplaceable; (3) based on the comprehensive indicators of water conservation capacity, value and importance, Qumalai, Chengduo and Maduo counties are ranked as priority areas for the ecological protection of water resources.

“Introducing grass into fields”, the major approach to modern grassland agriculture, is the crucial direction of agricultural structure adjustment in the farming-pastoral zone of Northern China. However, there have been few studies on the environmental impacts of agricultural production in this pattern. We used the life cycle assessment (LCA) method for the first time from the perspective of the entire industry chain from agricultural material production to livestock marketing, which involves the combination of planting and breeding. A comparative analysis of the environmental impact processes of beef and pork, the main products of the two existing agricultural systems in Eastern Gansu, was conducted. The findings showed that based on the production capacity of the 1 ha land system, the comprehensive environmental impact benefit of the grassland agricultural system (GAS) in the farming-pastoral zone was 21.82%, higher than that of the cultivated land agricultural system (CLAS). On Primary energy demand (PED) and environmental acidification potential (AP), the GAS needs improvement because those values were 38.66% and 22.01% higher than those of the CLAS, respectively; on global warming potential (GWP), eutrophication potential (EP), and water use (WU), the GAS performed more environment-friendlily because those values were 25.00%, 68.37%, and 11.88% lower than those of the CLAS, respectively. This indicates that a change in land use will lead to a change in environmental impacts. Therefore, PED and AP should be focused on the progress of grassland agriculture modernization by “introducing grass into fields” and new agricultural technologies.