A Watershed-Based Water Environment Eco-compensation Mechanism: a Case Study of Taihu Lake Basin, China

  • Journal of Environmental Science and Management
  • Jianjian Wang
  • Jie Zhou
  • Qiaohua Zhao
  • Yong Pang
  • Junjie Jia
  • Hongche Pan
Keywords: Eco-compensation payment, Taihu pilot region, Water quality exceedance rate method, Pollutant treatment cost method


In 2008, a simple punitive eco-compensation method was implemented in the Taihu pilot region, China. However, due to the use of a flawed formula and weak compensation criterion the payments were considered unsuitable. To improve the scheme, the following issues were considered: determination of compensation criterion; compensation when water quality is acceptable; consideration of reciprocating flow; control of the errors in pollutant fluxes due to the non-synchronization of river flow and water quality data. Two alternative ways to calculate eco-compensation payments were assessed for a case study in 2013: a payment based on the “Water quality exceedance rate (WQER) method” was found to be 172 million CNY (24.9 million USD). This method avoided errors caused by the pollutant flux and considered the situations of reciprocating flow and acceptable water quality; and the “Pollutant treatment cost (PTC) method” was considered suitable for immediate implementation, although the payment was higher at 245 million CNY (35.4 million USD). The determination of compensation criterion using this method had a scientific basis, but it required perfect and reliable monitoring data. If these conditions are met, the method was considered suitable for future implementation.