Integrating Water Quality Restoration Cost with Ecosystem Service Flow to Quantify an Ecological Compensation Standard: A Case Study of the Taoxi Creek Watershed

Watershed ecological compensation is an important economic tool for solving the protection-development conflict. However, establishing a sound ecological compensation plan for rational water resource use at the watershed scale remains challenging. Monthly water samples were collected between April 2019 and July 2020 at 28 points to analyze the spatiotemporal variation in water quality in the Taoxi Creek watershed, which is important for local water security. The Soil and Water Assessment Tool was used to simulate water supply, demand, and spatial flow at the watershed scale. Water quality restoration cost was integrated with ecosystem service flow to quantify the watershed ecological compensation. The ecological compensation using water quality restoration cost based on pollutant treatment cost and water quality target level was CNY 11.9 million (USD 188 million). Taoxi Creek was identified as the major supplier of water ecosystem services for downstream residents, and the ecological compensation based on ecosystem service flow was CNY 18.9-47.2 million (USD 3.0-7.5 million). Combining both calculations, the watershed should annually receive CNY 30.8-59.1 million (USD 4.9-9.3 million) of economic compensation from downstream ecosystem beneficiaries. This study provides a scientific basis for improving the ecological compensation scheme in the Taoxi Creek watershed and a reference for ecological compensation formulation in other watersheds.