A framework for eco-compensation in the Yangtze River Delta region of China based on multiple policy objectives

Eco-compensation plays a pivotal role in mitigating ecological service spillovers and addressing regional development imbalances. To enhance existing eco-compensation projects, a comprehensive eco-compensation framework with multiple objectives was established in the Yangtze River Delta (YRD). This framework takes into account various factors such as economic development, social welfare, ecosystem service and environmental pressure to ensure a balanced funding raising and allocation of compensation across regions. The inter-regional eco-compensation framework employs a top-down transfer payment approach to reduce transaction costs. Notably, the case study revealed a remarkable increase in total compensation, adding up to 22.15 billion CNY in 2015 and 44.01 billion CNY in 2020, with a substantial portion raising from the hidden loss of imbalanced economic development. The number of contributing cities decreased from 23 in 2015 to 21 in 2020 whereas the number of receiving cities increased from 18 to 20 during the same period. Compared with traditional ecocompensation policies, this comprehensive eco-compensation framework demonstrates greater fairness in regional compensation, while being more attuned to fostering economic development and ecological protection.