Transverse Eco-compensation Standards for Water Conservation: A Case Study of the Middle Route Project of South-to-North Water Diversion in China

In China, the distribution of water resources is incompatible with the development of productivity. The construction of South-to-North Water Diversion Project has achieved inter-basin water diversion, and the project can alleviate the uneven distribution of water resources phenomenon effectively. However, in recent years, the aggregate effects of water pollution and water resource shortages have been serious. Establishing transverse eco-compensation mechanisms becomes the key method to achieve sustainable use of water resources. Based on statistical and questionnaire data, this paper uses the Opportunity Costs Method and Willingness to Pay approach to establish a transverse eco-compensation standard calculation model for the Middle Route Project of the South- to-North Water Diversion. The results show that the upper and lower limits of the transverse eco-compensation standard for the Middle Route Project is $2.52 billion and $2.20 billion every year, respectively. However, the paying and receiving standards varied widely among different compensation payers and compensation receivers. Meanwhile, the significant factors influencing the paying willingness of the receiver area citizens were age, education level, average revenue per month, knowledge about the South-to-North Water Diversion Project and recognition of the importance of eco-environmental integrity. This study began with a theoretical analysis, then analysed related problems related to calculating transverse eco-compensation standards for the Middle Route Project of the South-to-North Water Diversion by an empirical study. This empirical study helps to establish effective transverse eco-compensation mechanisma and promotea the development of effective policies and legislation.