Framework of basin eco-compensation standard valuation for cross-regional water supply – a case study in northern China

Abstract

Basin eco-compensation (BEC) helps balance development opportunities and ecological protection. With rising demand for water and severe ecological problems driven by rapid economic growth, an appropriate BEC standard is urgently needed for basins in China. The BEC standard should comprehensively cover ecosystem services flow and ecological protection cost. This study proposes a BEC valuation method developed by combining gross ecosystem product (GEP) accounting with total cost accounting (TCA). The method was applied to the cross-regional water transfer project involving Shanxi province, Beijing city, and Xiong’an new district, which requires a BEC mechanism to coordinate payers and acceptors. The results revealed that water-related ecosystem services (WESs) received a minor proportion (<3%) of the compensation, owing to deficiencies in the current WESs pricing standard, and that stakeholder interests may be infringed by the imperfect profit distribution system. Multi-agent joint bargaining, a BEC fund, and hydrological monitoring should be implemented to improve BEC valuations.