It is widely accepted that environmental degradation and poverty are linked and that conservation and poverty reduction should be tackled together. However, success with integrated strategies has been elusive. Here, we present the results of a study that illustrates how development that combines environmental and economic perspectives and that provides appropriate compensation to affected populations can improve both nature and society, thereby eradicating the "poverty trap." The results show that if we cannot improve the livelihood of local residents, we will be unable to restore degraded environments when state-owned property is transferred to private ownership to encourage better management by residents. In contrast, measures to eliminate poverty, combined with the development of green enterprises that improve the livelihoods of private land owners in the long term, is the precondition for successful ecological restoration.