A systematic approach of determining compensation and allocation for river basin water environment based on total pollutants control

The compensation of upstream protective area should be determined carefully. This paper provides a comprehensive evaluation framework for economic assessments on the treatment of wastewater discharged into a river basin. We explore the rational costs of compensation and the funding allocation in the Xin'an River basin based on rate agreements. The compensation is determined in accordance with the total compensation model based on the opportunity cost method and allocated by the method of information entropy. In this study, we identify the total compensation payment and distribution of funds in each district and county in the upstream area (Huangshan). Results show that the She county can receive the highest compensation, and the Tunxi district deserves the lowest compensation. In addition, this paper demonstrates that the existing compensation is insufficient for the reduction of water pollutants in the upstream area. Our findings contribute to the existing schemes of ecosystem services payment and improve the environmental decision-making.