Promoting sustainability of ecosystems and economic development is a dual national objective in China, as well as one of the sustainable development goals (SDGs) of the United Nations. The Three-River Headwaters Region, where a National Park initiative has been initiated in the pastoral region of the Qinghai-Tibetan Plateau, is one of the key pilot projects in China with sustainability targets for 2025 and 2035. This paper assesses the possibility of achieving established targets for the proportion of cultivated to available grassland. These targets consider both ecosystem protection and herders’ livelihoods. An income simulation model was first developed to estimate the percentage of cultivated grassland area necessary from the natural grasslands to achieve the target income. The model was developed using income and livestock data from the annual yearbook for 2018, then applied to estimate conditions for three counties in the eastern region. Presently the rangelands are seriously overgrazed with income just reaching above the poverty level. If livestock were decreased to a theoretical carrying capacity level, income would decrease to lower than the poverty level, even considering a livestock feeding system to achieve higher production levels. Under these circumstances, in order to reach income targets in 2025, one option centered on income production from livestock requires 5% of grasslands to be cultivated to produce forage for livestock. However, achieving income targets in 2035 will become very difficult because the needed proportion was estimated to increase to 14%. An alternative was to transport extra forage from the agriculture region of eastern Qinghai province. The local government should consider these two options to improve herders’ income along with maintaining the traditional nomadic culture and sustainable ecosystems. The approach used to develop and apply this model could be applied to predict income changes accompanying future climate scenarios and to propose policies aimed at sustainability of ecosystems and economies for grasslands worldwide.